Protect Your Life, Not Your Things.

Well, actually, you should do both. We purchase insurance on just about everything we own. Our phones and TV’s, our houses and cars, our health and our pets. And for a good reason! Typically, we pay a lot of money for these things. We like to own stuff, but we loathe the prospect of losing it. We fear that if we lose it, it will not only decrease our quality of life, but also take incredulous amounts of time, energy, and savings to replace such items. As a result, we purchase insurance and extended warranties in the off-chance that something bad happens.

Phones and Houses Can Be Replaced. You Can’t.

Two areas of insurance that always seems to get overlooked is life insurance and disability insurance. These two types of insurance are among the hardest and most uncomfortable to discuss, and it’s easy to justify their lack of necessity. Most people think they don’t need it, or maybe don’t think about it at all. This is especially true if you are in your 20’s and 30’s. Most people in this age group wake up every morning feeling invincible. This is because by this point in our lives, we’ve done (and maybe still do) some reckless activities that have not been personally lethal in any way. We drink to excess, we drive our cars multiple times a day (and let’s be honest, sometimes use our phones too), we walk in front of moving traffic, our jobs may involve heavy machinery or sharp tools, we shoot guns for fun – the list continues.

Despite the precautions we take to make our society safe, all of the aforementioned activities can disable or kill you. However, we do these activities so frequently and without severe consequence that we become immune – invincible, if you will – to their potentially lethal reality. Herein lies the reason life/disability insurance is an uncomfortable topic, and easily pushed aside.

(To keep this article short and sweet, it will only focus on life insurance. Next week’s post on disability insurance will piggyback on the ideas proposed in this article.)

Don’t Dismiss Your Life’s Value.

Nothing in this world is said to be certain, except death and taxes.

Benjamin Franklin

Chances are you’ve heard this before. After all, Benjamin Franklin himself said it. But he’s right. And you may have heard it from a life insurance agent or financial planner trying to sell you some life insurance. Here is a very dumbed-down example of how basic life insurance works:

You pay a monthly premium to an insurance company in return for a death benefit in the event of your death. The death benefit is typically a fixed dollar amount of your choosing that the insurance company will pay to a beneficiary of your choice. For this example, lets say you chose a death benefit of $100,000. Your monthly premium is determined by your current age and health. For example, a 25 year old in excellent health might pay $30 per month for a $100k death benefit, while a 60 year old in “average” health might pay upwards of $200 per month for the same benefit. In the event of your death, the insurance company would give $100,000 to your chosen beneficiary.

This establishes two main points. Buying insurance when you are young and healthy saves you lots of money. Your health is only going to deteriorate as you age, so purchasing life insurance when you are young is always a smarter idea. It only gets more expensive the longer you put it off! Secondly, in the unfortunate event of your death, your beneficiary receives a large sum of money – $100,000! This is hugely important for a number of reasons:

  1. Funerals are expensive. An average funeral in America costs between $7,000 to $10,000 dollars. Your loved ones will appreciate you “handing them the money” to give you a proper goodbye.
  2. If you are married and working a job, it will give your spouse extra income to survive off of. If you brought in $65k per year, that is a lot of money to suddenly disappear from the family income. Your spouse could feasibly use the death benefit to continue paying bills for the foreseeable future.
  3. Did you know that if you have loans or debt of any kind (credit card, student, auto, home, etc) it is transferrable to your next of kin? Yup. Companies don’t forgive your outstanding loans simply because you died. They still expect that money back, and will turn to your children, spouse, and loved ones for those payments. A life insurance death benefit can relieve that burden entirely by providing them with the funds owed.

Why Purchase Life Insurance?

If the following list didn’t provide any good enough reasons, think of it this way instead. You don’t buy life insurance because you are going to die. You Buy life insurance because those you love are going to live.

You don’t buy life insurance because you are going to die. You buy life insurance because those you love are going to live.

Your Money and You

Think about your money mindset. You love your phone, your house, your car, your pets and purchase insurance policies on them without hesitation. Ask yourself: Do you love your family? Your children? Your spouse? Of course you do. Life insurance isn’t for you, it is for them. Protect them too. Be in control of your money. Develop and enhance the relationship you have with your money. It doesn’t only affect you. Having a solid foundation in place to control your money, even when you are gone, can continue to have profound, life-changing effects.


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