Spending $75 a month on life insurance means I can stop the cycle of poverty my family's been in for generations

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• I've watched many family members die without enough money to cover their final expenses.
• I never wanted that, so I bought a term life insurance policy in my 20s that I renew every five years.
• It's enough to cover basic expenses for my kids and help them establish their own homes.

When my grandmother died 10 years ago, I didn't even need to ask if she had a life insurance policy. I knew she didn't. Just like most other members of my family.

My grandmother had no estate or assets. Since she left no surviving spouse or dependent child, the $255 death benefit that Social Security sometimes pays out wasn't even an option.

She would be laid to rest in a cemetery plot where my grandfather had been buried 30 years before. My grandmother wanted to be buried, too, not cremated. But since she died in a different state from where the cemetery was located, the cost to transport her body was way more than anyone could afford. So, despite her wishes otherwise, she was cremated for financial reasons.

Only two of her seven children were employed at the time, so they gathered whatever funds they could scrape together. And that — combined with the available credit they had on their credit cards — was just enough for the cremation and the cemetery's fee to open a hole big enough for us to place her ashes. There were no funeral services, and no memorial event.

The poverty cycle in my family

This situation isn't unusual in my family. Just last year, my aunt died in a similar financial state. It was pretty much the same story when my stepfather died five years ago, uninsured and with nothing in his bank account.

I hail from a family where poverty traces back for generations. Many of my relatives have struggled just trying to afford food and shelter. Something like life insurance would be considered a luxury, and — like anything else not required for basic survival — would be low on the priority list.

Family lore says that at least one of my ancestors was buried in New York City's potter's field, where the poor and unidentified are interred in mass graves. 

I and other family members have had to scramble to help pick up the financial pieces when some of our relatives have died without any insurance. Sometimes there wasn't even enough f67or an obituary.

Watching this scenario play out repeatedly over the years taught me a valuable lesson: In death — as in life — your financial resources often determine your fate. I knew from a young age that I didn't want to be the cause of one of these post-death panics that send loved ones into a frantic scramble.

As a result, I've had life insurance since I was in my early 20s because I've never wanted to leave anyone else in that position. 

Why I bought life insurance

I've seen experts and others share the opinion that life insurance isn't necessary if you don't have minor/dependent children to support. But someone will still need to take care of your final arrangements. And I know from firsthand experience that even the most bare-bones, no-frills burial can be more expensive than you might expect.

I'm guessing those experts likely don't hail from families like mine. They are perhaps taking it for granted that every deceased person has money in the bank or plenty of other assets that will cover burial and funeral expenses.

Even if most people do in fact have sufficient assets at the moment to cover those costs, things can change. People may lose their jobs, get hit with major medical expenses, or otherwise face unexpected financial hardships. This is increasingly likely as they get older, particularly if they start having health issues. 

And the harsh reality of life insurance is that if you wait until a point when you think you may actually need it in the near future, it may be too late.

In my recently deceased aunt's case, she did look into getting life insurance a few years ago (partly at the urging of her sister, who'd had to cover some of the expenses after their mother's death). Unfortunately, at that point she'd already had lung cancer and was in her 60s, so insurers weren't exactly eager to cover her, at least not without charging a fortune. A decent life insurance policy she could afford was virtually impossible to find. 

I'll renew my life insurance policy for as long as I possibly can

I have a term life insurance policy I've had for years, and I protect it like a precious gift. I have children who are still trying to get their own financial footing. I hate to picture them in a panic, trying desperately to come up with enough to bury me if I were to die with no insurance.

I first got this policy when I was in my early 20s. At the time, I didn't know much about insurance (and obviously, there wasn't really anyone in the family I could ask). But I felt like anything was better than having nothing at all, so I took the most affordable option I could find that would at least provide enough to take care of my children for a while if something were to happen to me.

It currently costs me less than $75 a month. The policy renews every five years, and I plan to keep it indefinitely — ideally, for life — because I've now reached an age where it might be more difficult to get a brand new policy from scratch. It goes up a bit with each renewal, but it's cheaper than starting over again with a new policy.

It is enough to reasonably cover basic expenses for my kids for at least a year or two, and to help them establish homes of their own.

I'm hoping that in this one significant way, I can try to help shift the family legacy.

This article was originally published in December 2019.