A dear family friend suddenly and unexpectedly passed away from heart failure in December, leaving a wife, large home and two very young children. The big question on everyone’s mind at the wake: “Do they have life insurance?” I don’t know the answer, but it’s odd that anyone has to even ask that question about a young family in this day and age. But the sad truth is that some people view life insurance as a waste of money no matter what the family’s stage of life.
According to an article in February 2012 by J.D. Power & Associates, ownership of life insurance has dramatically declined in the past decade. LIfe insurance, most notably the traditional term insurance, is meant to take care of living and other expenses of a family who has lost a source of income through death. Though we think that families with young children would automatically have life insurance, that’s simply not the case, according to yet another article in U.S. News Money, which cites that parents tend to overlook adequate life insurance because for one reason, it’s an inconvenience to apply for a policy. There are many other articles that discuss the fact that the economy is putting a damper on life insurance purchases, as well.
But I could cite article after article, but nothing will drive the point home about the importance of life insurance more than my own personal experience. My dad died when I was 11 years old. My life turned upside down. And, there was no life insurance. I don’t know why there wasn’t a life insurance policy in my family, after all, it was 1972, not the dark ages. But I will tell you that I suffered because my parents did not have a life insurance policy. After my dad passed, we moved to a small rental garden apartment, then bounced around to many different apartments, my mom worked menial jobs to make ends meet, we sold our car, I hardly had new clothes, and as far college, from what I can remember, there were lots of loans and a handful of money from my older sister. I’m very lucky to have attended college, I know.
If my parents had a simple and inexpensive term life insurance policy (the least expensive of all the types of life insurance), my life would have been a bit different. We would not have moved, my mom could have stayed on as a part-time special ed teacher doing what she loved to do, we would have kept the car my dad was proud he bought, I’d have been adequately clothed and fed, and probably had enough for schooling back in those days without the loans and fights my mom had with my sister about money for my college. My mom may not have gone off the deep end from sadness and stress (among other things) and I would have had a more productive childhood.
Now, I will say that deep down somewhere I had this belief that I was desperate for insurance, so much so that I actually purchased some wacky whole or universal life insurance policy when I lived in New York City, didn’t own anything and was single! Talk about gullible!
I’ve read that by time you turn 50, you hopefully won’t need a life insurance policy because your kids are probably out of college, on their own, and your house is paid off. Uh-huh. Old thinking. People have waited to have kids later, no one’s mortgage is paid off these days, and college….oh, right. In other words, we need life insurance at age 50! And of course it’s more expensive the older you get, but if you are healthy enough, it’s affordable enough when you compare it to the alternative for your family. LIfe insurance is one of the most frugal purchases you can make for your family.
Fast forward to today–yes, it is annoying when my quarterly life insurance premium bill comes due, and when my husband’s premium is automatically deducted from our checking account. But I think of our kids, their future, and a few bucks every few months is a relative bargain next to what could potentially happen to their lives if we took the same path my parents had walked.
- Life Insurance 101 (lugenfamilyoffice.com)