What Makes Life Insurance Real?

I’ve talked about life insurance from one end of life to another, from insurance for children to senior life insurance. The one common denominator is that if someone doesn’t take any action to put life insurance in force there is absolutely no way their beneficiaries will benefit from it.

I’ve talked about how children’s life insurance or juvenile life insurance isn’t necessarily all about the death benefit. In fact, juvenile life insurance is almost a taboo subject if it’s centered around paying the final expenses of a child if they pass away. But the real and prudent reason to consider life insurance on your child is that most juvenile life insurance plans have a conversion option that allows the child, when they become a young adult, to convert the plan to a larger plan without evidence of insurability. If life insurance is an important part of your financial plan, making sure your child has that same option locked in is a real gift. If they suffer some kind of childhood cancer or perhaps become type 1 diabetic, their life insurance as an adult may be priced out of their reach or may not be reachable at all. Parents may not want to talk about the possibility of a child dying, but most of us will gladly talk about wanting our children to have the same opportunities that we have.

It usually doesn’t happen this way around, but today I spoke with a son who had been suggesting to his mother for some years that she buy life insurance. It’s usually parents suggesting this to adult children. The children were willing to pay for it as a way to make her estate liquid as she was carrying a lot of debt. She drug her feet and a few years ago was diagnosed with colon cancer. It was treated and she was getting on with life, but finding life insurance just a year or two out from colon cancer is, well, tough to impossible. She now has a recurrence of colon cancer and other than guaranteed issue life insurance she would likely not be able to get life insurance approved for 5 years if both cases were very low stage and grade, which they weren’t. Given her situation and age she won’t be able to get traditional life insurance for 20 years if ever. She will likely die without life insurance and her heirs can only hope that her assets are sufficient to cover her debt.

The thing that makes life insurance real is usually a brush with or witnessing a brush with mortality. I get a few calls every month asking if it’s possible to get life insurance on a very sick parent in their 80’s. Suddenly it’s real. I probably get a call a week from a husband or wife that suddenly realize their child isn’t going to have a good time if they die unexpectedly. This is normally easily remedied with low cost term life insurance unless you happen to be 6’1, 375 #s and have type 2 diabetes. You can still get insurance but it won’t fit into the low cost category. But it’s real and you put what you can afford in force and hope your family never needs it.

I had a private pilot call the other day. He had never really considered life insurance until the day before when he came within a few hundred feet of a mid air collision. He was close enough to see that the pilot and passenger in the other plane weren’t even looking and weren’t aware of him. Because he only flies a small handful of hours a year the price was going to be pretty steep so he decided against it. Life insurance still isn’t quite real to him.

Bottom line. Most of us have that aha moment when we realize that life insurance is maybe worthy of consideration. Some never do. Some waltz through life believing they are saving money by not buying family protection life insurance. If you have any questions or would like to find out just how little life insurance can cost, call or email me directly. Let’s talk.