Tuesday, December 30, 2014

Don't Make Them Pay for Your Life Insurance!


Earlier this afternoon I read something on LinkedIn that resonated so much with me that I could not help but think of sharing it with you, readers of this blog. It is the comments of another person1 (a fellow member of a LinkedIn group that I subscribe to) regarding a post from the website www.lifehappens.org that another group member had shared previously. (Actually, the group member who shared the original post is no other than Marv Feldman, President and CEO of Life Happens2, and as a matter of fact, I too was struck by the story in the Life Happens post and so shared it on our Facebook page back on December 24, 2014. You may visit the page – ours, that is – at http://www.facebook.com/AakobbFinancialServices to read the story, and while you're there please don't forget to like us; thank you.)

Anyway, to go back to what I started saying, I found the comments (concerning that story) made by my LinkedIn group member to be so insightful, so spot-on on the subject of life insurance and the lack of appreciation by a majority of people of its importance in providing financial security for any family. In my humble opinion, it is this lack of appreciation for what life insurance can do – what it stands for – that often results in people procrastinating on getting a life policy when faced with the choice to do so (by coming up with a million different excuses why they can’t get it now) or sometimes even refusing completely to get it. As such, I couldn’t agree more with what that LinkedIn contributor said, and I asked his permission to share his comments here on this blog. Fortunately for us all, he graciously agreed1.

Honestly, I wish I could simply put his words out here exactly as I read them, because I don't believe any changes I could make to his comments would suffice in expressing his sentiments on the subject as poignantly as they need to be (the way he undoubtedly intended them to be). That being said, I do have a few words of my own that I would like to inject into the conversation, and so I am unable to just reproduce everything I read verbatim and leave things at that. Rather, I’m going to try and paraphrase the gentleman as closely as I possibly can (with direct quotes thrown in where possible) without losing much of the meaning to – and emotion in – his words while adding my own two cents’ worth.

So, here we go.

There is nothing funny about life insurance. Seriously, there isn’t. Why would there be, when the whole concept revolves around some very serious – even grim – aspects of the human existence? Life...money...financial security...illness...death…these are all serious matters that should not – and cannot – be taken lightly, let alone be spoken about with any element of mirth.

And yet, in at least one respect that is ironic, one can consider the subject of life insurance with a twinge of humor: it has to be paid for one way or another, whether it is bought or not.

If you buy the life insurance your family needs, then you pay for it out of current income. You may not have a whole lot of disposable income to pay for it, so you’re forced to spend a little less here and a little less there. In essence, you learn to practice a little frugality in order to have your life insurance, and (it may even help) "you do a better job of budgeting, of watching out for unnecessary expenditure"1.

On the other hand, “if you don't pay for the life insurance out of the money in your pocket today, then your family may have to pay for it someday.

You may ask, “But how is that? If I’m not spending any money on life insurance, then how will my family pay for it?”

Well, the answer is simple, really. Your family pays in many ways for your failure – or refusal – to pay for life insurance (and thereby make provision for their financial security when you are no longer around to provide for them), and there is no escaping that! They have to. Yes, your family pays for the life insurance you don’t pay for out of the things they are forced to do without when you (and the income you earn) are no longer around to continue to make those things possible. They pay for it with the loss of the life-style they were accustomed to but are now no longer able to enjoy. They pay for it with the home from which they are forced to move (because there isn’t enough money to make the house payment – it makes no difference whether that payment is for rent or a mortgage).

Yes, your children will pay for the life insurance you don’t pay for today with the school they are unable to attend because the fees may no longer be affordable; the education that you want for them that they will be unable to get (because they either drop out of school entirely to get a job and help take care of the family, or they simply cannot focus on studying to get good enough grades while also having to hold a job). They will pay for it with the opportunities they are no longer able to take advantage of; they will pay for it with "a mother's attention that is not theirs" (fully now) because she must work to support the family…”work to live so that they may also live”1.

Yes, just because you fail – no, actually refuse – to commit a little bit of your income to pay for life insurance today, your entire family pays a hefty price tomorrow with the sense of security (and it is not just financial security that we’re talking about here) they no longer possess when you get taken away from them prematurely!

And there you have it, my dear reader; that is what may be considered “funny” about life insurance: you pay for it if you buy it, or you make your family pay for it if you don’t buy it! Now ask yourself, which way would you rather have it?

So, the next time you’re confronted with the choice (or opportunity) to buy a life insurance policy – if you don’t already have one – or pay your life insurance premium (for those who already have a policy) and you start dithering or making excuses (perhaps because you’re thinking you could use the money to buy the latest hi-tech gizmo on the market – or that new fancy dress you would probably wear only once and then leave hanging in your closet to collect dust), ask yourself another question: “Who pays the biggest price for life insurance, me or my children?” Then, act in accordance with your answer. My hope and prayer is that you will do the right thing for your family.

PS: If you do not have life insurance yet, (or even if you do but are not sure whether you have enough to meet your family’s financial needs – and especially if you’re not sure that you have the right kind… the new kind of life insurance), simply click here to get a free, no-obligations quote.

Footnotes:
  1. The person I talked about at the beginning of this article (the one whose comments on LinkedIn inspired this blogpost) is called Joaquin Wilwayco. He is a fellow financial services professional with SynergiaDGW in Austin, TX, and he explained to me that the words he used in his comments were not original to him. (He actually credited an “Unknown Author” at the bottom of his comments.) Along with the title of this post, most of the lines with parentheses (" ") and/or the superscript1 are either direct quotes from or paraphrases of that LinkedIn commentary.
  2. Life Happens, formerly known as the LIFE Foundation, is a non-profit organization dedicated to helping Americans take personal financial responsibility and make smart insurance decisions to protect their families financially through the ownership of life insurance and related products. Learn more about the organization and what they do at www.lifehappens.org.


Have a question about taxes, issues with the IRS, life insurance, how to accumulate wealth and enjoy it income tax-free, or financial planning in general? We're only a phone call or email away; simply ask us.
Patrick C. OsBourne
AAKOBB Financial Services
Phone 1: (614) 707-1775
Phone 2: (513) 889-2134
Email: info@aakobbfinancialservices.com

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