In fall of 2017, my high school classmate, Ana, passed away. I had known her since elementary school, although we were never close friends. Her problem in 4th grade was with homework. It wasn’t that she struggled with it, in fact quite the opposite; she just never did it. What I admired most is how much she didn’t care. She never looked ashamed or scared when she said she didn’t have it. Right or wrong, she was confident. I’ll never forget the teacher offering to carry her on his shoulders around the school if she just did her homework once. (She never took him up on it.)
Ana was broadsided in a car accident by a driver that wasn’t paying attention. She loved going to the beach. She had a dog. She had two kids. She had parents and siblings. She was young – only 31 years old. She was a normal person who lived a normal life, and then lost it. The fact that she didn’t do her homework in 4th grade is inconsequential now.
I wasn’t her financial advisor. I don’t know anything about her personal financial situation. But based on the footer of her obituary asking for donations to her children’s GoFundMe account, my guess is that Ana didn’t have life insurance.
If you were to ask the average 20-something how they envision themselves going out, my hunch is you’d find a common theme between “in my sleep” and “peacefully” at an old age.
As we grow older, the natural passage of time begins to show us that old age is not always what takes loved ones away. Death might always be expected, but it is often a surprise. And that was the case with Ana.
We can never know for sure when death will come, but we can prepare. The phrase “hope is not a plan” applies here, as does the phrase “hope for the best, but prepare for the worst.” A 30 minute conversation, uninterrupted, is all it really takes to understand whether there’s a need for life insurance. Another 30 minute conversation would suffice for most in determining what that need exactly is.
Of note when considering your life insurance plan: “he/she’d sell the house” or “I’d move in with my brother” are not plans. They are wishful thinking at best, because it assumes the following:
- The housing market will always be a seller’s market
- Your brother is alive
- Your brother will always welcome you unconditionally for an indefinite amount of time
These common objections to life insurance are not bad ideas. Nor are they implausible. But I have never once seen a someone with a notarized, mapped out, legal, step-by-step agreement to execute these ideas. Not only that, they are not fully forward-thinking, because they only consider the immediate next step after death – not the years and decades to follow.
So what’s the bottom line? Do you need life insurance? I don’t know you, so I can’t tell you the answer to that – but what I can tell you is what questions to ponder so that the answer comes to you.
- If I died, would someone I love suffer?
- If they would, do I care?
If the answer to both of these questions is yes, then you need life insurance. What kind? How much? Consider the following questions:
- If I died, how would my loss impact my loved ones financially?
- What kind of life do I envision for my loved ones if I don’t die?
- Can my family continue to live their current lifestyle if I die? If not, what sacrifices would they have to make?
September is Life Insurance Awareness Month. The term ‘life insurance’ can bring up many misconceptions. I encourage you to set aside any preconceived notions you may have on life insurance and find a trusted advisor to help educate you and look at your personal situation. No one can predict the future or when your time here is finished, but an advisor can help you prepare so when that time comes, your family can take the time they need to grieve before having to make any major decisions. It’s not morbid to think about your death but rather practical and your family will appreciate your forethought. I’ve never had a client say to me, ‘wow, I wish you hadn’t told them to buy so much life insurance, that’s really more money than I need right now.’
About the Author
Scot Whiskeyman is Founder and Partner of Providers & Families Wealth Management, LLC., and is a CERTIFIED FINANCIAL PLANNERTM . His primary focus is on retirement planning for established professionals and estate planning for seniors. He can be reached by e-mail at firstname.lastname@example.org.
Edited with contributions from Lindsey Ciarrocca. email@example.com