Bobservations: Life Insurance

I’ve been a pastor for over a decade and have walked with many families through the loss of a loved one. Although each situation is different, there is one thing in common – it’s hard every time. Nothing can replace the immense loss felt in the lives of those left behind. Yet, hard as it is, life moves on. Sadly, in some cases the grief is amplified by the reality that the loss of income of a primary provider will further devastate the family at a time when they are already reeling. That’s why having the right amount of the right type of life insurance is so important. It may be one of the most loving things you can do for those you love.

Before I was married, no one was depending on me, at least financially, so I really didn’t need a great deal of life insurance. If I passed away I just needed enough to cover the burial costs. However, all that changed when I married Diane. We started a life together; we bought a house and had children and all of the responsibilities that come with being a young family. My need for life insurance became critical. If something were to happen to me, I wanted to make sure that the family was covered. Paying off the mortgage would be nice; raising kids is expensive so I wanted to cover that too. I didn’t want to compound the loss of their husband/father with the loss of their home and financial security.

The good news is that the older you get, the less life insurance you need. Why? Because as time goes by, your mortgage will be paid off (or close to it, right?); the kids schooling will be paid for; and of course, if you follow the baby steps from FPU (Financial Peace University), you are already debt free. You simply don’t have as much to cover. There are a lot of different types of life insurance policies out there. It gets complicated because agents are not usually looking out for your best interest; they are looking to make money. Honestly, Diane and I made a huge mistake early on in our marriage by purchasing the wrong type of insurance when we bought a “Whole Life” policy. We were young, inexperienced, and gullible believing we needed insurance our “whole life.” The bottom line was we paid into a very expensive policy that didn’t provide adequate coverage for almost 20 years. Ouch! Now that I’m a bit wiser from that journey, whenever I counsel with people, I only recommend “term-life” policies. I also recommend coverage of ten times your annual income. Term policies are usually very affordable, and you can pick the length (or term) of the policy. (You can get online quote comparisons from the Zander Insurance Group here.)

I’ve read that the last three months of your life is often the most expensive. Having life insurance will allow you to reimburse any medical bills that have incurred, and show love to your spouse and family by providing necessary provisions in your absence. In some cases, it may even allow you to leave an inheritance to your family. Those are all biblical concepts. That’s why I’m convinced that having the right amount of the right type of life insurance is honoring to God. What do you think?