I spent about 16 years calculating risk for an insurance company...
You’d think someone who priced life insurance for a living would have his own coverage dialed in. I didn’t. For most of my career, I had a basic group life policy through work – two times my salary, around $200,000. I figured that was enough. My wife worked. We had some savings. The kids were young. I was healthy. What could go wrong?
Around 2015 – I forget the exact year, maybe 2016 – I was reviewing a claim file for a man in his early forties. Same age as me. Same family setup: wife, two kids, mortgage. He had a heart attack out of nowhere. No warning signs. His employer-provided life insurance was one year of salary. Sixty thousand dollars. His wife called our claims department crying. She said “how am I supposed to pay the mortgage? He was the breadwinner. I haven’t worked since the kids were born.”
I read that file and felt something shift. I had approved hundreds of claims before. But this one landed differently. Because I realized: that could be my wife. That could be my kids.
Look – and I know I overuse that phrase, but bear with me – I had access to all the actuarial tables. I knew the probability of a 44-year-old man dying within the next ten years. It’s low, but it’s not zero. And low-probability events happen every day. That’s the whole point of insurance. You’re not insuring against what’s likely. You’re insuring against what would ruin you if it happened.
So why wasn’t I following my own advice?
Because group life through work feels like free money. You don’t write a check every month. It just comes out of your paycheck, pre-tax, barely noticeable. And your employer frames it as a “benefit.” But here’s the catch – and I’m not using that phrase again, I promise – group life ends when your employment ends. Quit, get laid off, retire, get fired, and your coverage stops. Some plans let you convert to an individual policy, but the rates are often terrible.
I saw this happen to a former colleague. Let’s call him Tom. He worked at the same insurance company for 12 years, got a great offer elsewhere, left, and forgot to convert his group life. Six months later, he was diagnosed with pancreatic cancer. He called me, frantic, asking if there was any way to get coverage. There wasn’t. The group policy was gone. He applied for individual life and got denied. He passed away two years later. His family got nothing from life insurance. They had to sell their house.
Tom’s story haunted me. Because I had the same group life setup. Same vulnerability.
I went home that night and told my wife, “I need to buy a real life insurance policy. Not through work. Something we own.” She looked at me like I had three heads. “Don’t you already have life insurance?” she asked. I explained the difference between group term and individual permanent. She said “I didn’t know that could go away.”
Most people don’t.
That’s why I left underwriting. Not because I hated the industry – I didn’t. Insurance is necessary. It’s how society pools risk so one family doesn’t get destroyed by a random tragedy. But I hated how the good stuff was hidden behind jargon and fine print. I hated that my own colleagues – brilliant actuaries and underwriters – didn’t explain this clearly to customers. I hated that Tom’s family got nothing because he didn’t know the rules.
So I quit in 2017. Started a small practice helping people review their coverage. No sales. Just analysis. I charge a flat fee to go through your policies, find the gaps, and tell you what to fix. You can buy the insurance anywhere. I don’t care. I just don’t want you to be Tom.
Let me show you why group life is usually not enough. You can use the Life Insurance Needs Estimator to run your own numbers.
But group life is cheap for employers because most employees are young and healthy, and the coverage ends when you leave. The employer doesn’t care if you’re underinsured after you quit. That’s your problem.
So here’s what I did. I bought a 20-year term life policy for $1 million. Cost me about $600 a year, maybe a bit more now. That’s roughly $50 a month. I also kept a small group policy through work – about $100,000 – as a supplement. The term policy is mine. It stays with me even if I change jobs. My wife knows the policy number. The beneficiaries are set. I have a file on my desk labeled “insurance – if I die, open this.” Morbid, but practical.
Someone I worked with – let’s call her Diane – had a similar realization. She was a single mom, freelance graphic designer, no life insurance. She thought it was too expensive. I ran her numbers: $50,000 income, $150,000 mortgage, one kid age eight. Her need was around $400,000. A 15-year term policy cost her $30 a month. She almost cried. She said “I spent more than that on takeout last week.”
That’s the disconnect. People think life insurance is expensive because they’ve been pitched whole life or universal life with investment components. Those can be costly. But term life – pure protection for a fixed period – is dirt cheap for most people under 50. A healthy 40-year-old can get $500,000 for $30-40 a month.
So why don’t more people buy it? Because insurance companies make more money selling you cash value policies with high commissions. Because employers don’t want to admit that group life is a Band-Aid. Because nobody explains the numbers.
I’m not saying whole life is always bad. For high-net-worth individuals with estate tax issues, it can make sense. For the other 99% of us, term life is the answer. Buy enough to cover your family’s needs for the years when your kids are young and your mortgage is large. Re-evaluate every five years.
After I bought my policy, I felt something unexpected. Relief. Not fear. I used to worry about dying on the Kennedy Expressway and leaving my family with nothing. Now I don’t. The insurance isn’t going to bring me back, but it will pay off the house, fund college, and give my wife time to figure out the next chapter. That’s not a financial product. That’s peace of mind.
I still do underwriting consulting sometimes, but I don’t work for the carriers anymore. I work for people like you. And the first thing I ask every client is: “If you died tomorrow, how long would your family be okay?” Most people don’t know. That’s the problem.
So here’s my challenge. Don’t rely on the group policy your employer gave you. It’s better than nothing, but it’s not enough. Go run the Life Insurance Needs Estimator. See the real number. Then price a 20-year term policy online. It might cost less than your streaming subscriptions. And then you’ll never have to worry about being a statistic.
P.S. Tom’s widow called me a few months after he passed. She wasn’t angry at me – just sad. She said “he always thought he had time to fix it.” I think about that every time I’m tempted to put off a decision.
By Marcus Whitfield
