Last summer I had a brush with death that rattled me to the core. It all happened so quickly, but the experience left me with a whole new set of disturbing preoccupations which lingered for months and left me considering things I thought I wouldn’t have to think about until I was “older.”
A little background on myself: I’m a 42-year-old otherwise-healthy non-smoking male who enjoys cycling the short distance to and from work each day. As I live in a busy metropolitan area, the ride is usually fraught with difficulties, and I have to be 100% alert at all times. But… as I’ve done it so often, I’ve memorized the possible danger zones and by this point, the trip has become automatic.
Turns out maybe a little too automatic.
On the way home one pleasant July afternoon a sporty, candy apple red Italian import (which turned out to be a rental with a tourist behind the wheel) came to an extended rolling stop from a side street, way past the stop sign and right into my path.
With only half a second to act, I furiously squeezed the front wheel brakes and went flying over the hood, landing on the other side of the car squarely on my head.
After that everything went black. I woke up in the hospital alone in the dark. It was the night shift and for a full hour, no hospital staff came into the room to tell me if I was OK.
I felt more or less fine, but inevitably my mind began to ponder what could have happened. I kept coming back to three main preoccupations, all of which involved my two kids.
Talking about death might not be easy, but it is essential—just like life insurance. Many of us choose to ignore the reality of what could happen if we suddenly die without having the proper protection.
The results could be devastating for your loved ones, leaving them with a substantial financial burden of funeral expenses, credit cards, car loans, and even a mortgage.
What could be more comforting than knowing that there will be money available to protect your family in the event of your passing?
Here are a few other reasons to stop procrastinating and getting a life insurance policy.
Top Reasons Why Life Insurance Is Important
1) PAYING FOR TUITION
My wife and I have done all right, but we didn’t exactly have the kind of savings it would take to put my two high school aged girls through college. As we both were employed, paying for school was going to very much be an ongoing monthly expense supplemented by what savings we had.
What if I had died? Just like that, during a bike ride, I had taken hundreds of times? All it took was the unknown variable of a tourist not familiar with the area.
My wife would never have been able to pay for two student loans on her one income. It would have effectively bankrupted the family. Which led me to my second concern:
2) TO PAY OFF MY HOUSE
We still had 15 years left on our mortgage. My wife and I were tightly budgeted and it definitely took both of our incomes to hit the numbers we needed every month.
If I died prematurely, my family would probably not be able to afford to continue living in our house. This could mean moving to another area and changing schools, not to mention the emotional toll of leaving the surroundings my wife and daughters love.
3) TO PAY FINAL EXPENSES
A modern funeral service and burial can easily run into the tens of thousands of dollars. It would be hard enough just dealing with the fact that I'd be gone, and I don’t want my wife and daughters suffering double under the financial load as well.
4) INHERITANCE
Though we meet our monthly expenses, my wife and I weren’t completely sure if we’d be financially capable of leaving an inheritance. I found out that life insurance may be our best bet to leave a sizable sum of money for my spouse or children when I die.
Reading further, I discovered that this way you could use your retirement funds to travel the world knowing that your family will be taken care of if anything happens to you.
In another case, if you are already in your 60s or later and have not built up an inheritance to leave your family, a life insurance policy can help you save money that you can put back in your pocket each month or invest somewhere else.
5) ENSURE THE SURVIVAL OF YOUR BUSINESS
Life insurance can also help you face the financial repercussions of death if you have a business. Though it’s not my case, if the sole proprietor of a company dies, the company is usually transferred to his or her successors, usually their family.
If one of their children wants to take over the company, what happens to the other kids’ inheritance? With a life insurance policy, the children who will not be taking over the business will be compensated for by a life insurance benefit, thus ensuring fairness within the family.
If there is no one in the family to take over the business, a life insurance policy to your name will allow the company to maintain operations by giving you the opportunity to cover operating costs, enable a manager or another key employee to by the company assets, and help pay any taxes due following liquidation of taxable assets.
To Choose Term or Whole?
After I was released with a mild concussion, I decided to contact a friend of mine who works for Transamerica. He advised me that a 15-year term policy was the most suitable option, explaining that whole life insurance, with its investment component and higher premiums, was not appropriate for my situation.
If something happened to me in the next 15 years (the remaining time on my mortgage), my wife would have enough money to pay off the house outright.
We worked with our advisor to determine a sufficient payout to cover both my girls’ college tuition and living expenses, factoring in that it may take a few years after they graduate for them to become self-sufficient.
Finally, the term policy still had more than enough left over to cover the expenses associated with the funeral and burial.
I Made the Right Choice
As a monthly expense goes, our term coverage costs about as much as our cell phone bill. I never regretted the decision. This point was driven home just a few weeks ago when the friend who sold us the policy sent me the below screenshot of a claim he himself was personally settling.
I’m not 100% sure on the specifics, but my friend revealed that the unlucky individual was 42 years old just like me. And just like me, he was cycling home from work when he had his accident. Unlike me, he wasn’t so lucky as to get away with just a mild concussion. Tragically, he died, leaving a wife and family behind.
He’d had the foresight to purchase three life insurance policies, though. The company paid his wife in full on all three policies, plus interest, to the tune of over $2 million.