Why Buy Life Or Disability Insurance?
Why do you need life or disability insurance? It seems like a simple question; however, some people make it too complicated. Here is the simple answer to why people buy life insurance or disability insurance. A person buys life and disability insurance because they love someone. The person they love would suffer financially without help with expenses and financial obligations.
I was twenty-nine before I bought my first life insurance policy. That is the age I was when I got married. Once I got married, life was no longer just about me. I love my wife and realize that after we got married, we began to make financial obligations together. When I bought my first life insurance policy, I was not thinking about dying. I was thinking about not burdening my wife with the debt that the two of us had begun to accumulate.
The only debt that my wife and I had when we first got married was car payments. In 1990, we had two car payments, one for about $300 per month and another for about $500. We had credit cards, apartment rent, and utilities. Life was not too complicated. However, I knew that if I died, I would leave our financial commitments for my wife to pay. To me that was unacceptable. I loved her too much to put that kind of financial pressure on her.
So, since I was a young aspiring financial adviser, I hired myself as a client. I knew the burden of our current obligations and possible future financial commitments. At the time we did not have children and my wife did not agree that we needed life insurance. If you are reading this because you think you need life insurance and your spouse is not convinced that you need life insurance, I know how you feel.
If you are young and married, talking about dying dampens the spark of romance. One day you are talking about buying a house and having children, the next day you are talking about dying. For some young couples without kids, it is hard to see the need for life insurance.
Here is what I did. I treated the situation, just as I would if I had a client with a spouse that did not agree that they needed life insurance. I wrote down every financial obligation we had and projected our possible future financial commitments. At that time, our financial obligations were primarily car loans totaling about $800 per month. Both cars had about three years to pay, so that was an easy obligation to add up: $800 x 36=$28,800. However, we needed more than $28,800 life insurance coverage.
Additionally, we needed to consider the financial burden to each of us if one or both of us became disabled. The conversation with my wife turned from we need to think about being disabled and dying, into a real discussion about the life that we were going to build together. We wanted to buy a house, have children and look out for each other; “in sickness and in health, till death do us part.”
It was not the smoothest conversation because we had to look at the reality and responsibility of having children. Frankly, we had some hesitation about when the best time was to buy a house and have children because of the expense. It was over thirty years ago, and the cost may have been less than now. However, it was the reality that we were going to obligate ourselves to spend hundreds of thousands of dollars over many, many years.
Throughout our conversation about our future, we never forgot the reason why we were talking about our future. If I died, I did not want to leave many years of financial commitments to fall on my wife’s shoulders, plus, she felt the same way about me. She did not want to leave the burden of paying all the expenses of raising children and having a house to be my sole responsibility.
So, in 1990, we decided that we wanted to buy a house and have two children. We looked at all our expenses and agreed that each of us needed about $500,000 of life insurance. Plus, we needed disability insurance, just in case we got sick or hurt and could not work.
You have taken the last few moments and heard my story. Do you have a similar circumstance? If you think that you need life and disability insurance, you need to identify what your financial commitments are today and make an informed decision about future obligations.
In the 90’s, today’s technology did not exist to calculate financial needs. I did everything on a yellow pad with the help of a calculator and an insurance company rate book. Luckily you do not have to use those same tools. I can help you find the amount of life and disability insurance you need by using the online calculators on my website. Here is the link: https://www.advice4lifeinsurance.com/calculator It is super easy to use. You will have to make a few simple calculations such as estimating your annual income. Additionally, there are some factors that you can change such as estimated rate of returns on your savings and the inflation rate you expect. Do not let those numbers worry you. The fields for those factors are already filled in with estimates. You can change them if you like or leave them as they are.
Let me break away from the calculator for a moment and talk about privacy. All the information you’re entering into the online calculator is NOT saved. So, the information is private, only you will see the information that you are entering into the online calculator. When you do get to the point of entering your personal information, we are committed to keep it private. You can read our privacy policy on our website.
If you started to enter the information necessary for the online calculator and you are not sure what to enter, you have a few choices to calculate the amount of life insurance that you need. I have a more in-depth blog post that is called “How much life insurance do you really need?” That blog takes a different approach toward finding the amount of life insurance that you need.
You can figure out how much of your paycheck you need to protect on our disability page at http://www.advice4disabilityinsurance.com. If that looks too overwhelming or you would like some personal assistance, I am glad to help you. The quickest way to get help is to use the “Ask Van” button at the top of each page. If you are on a mobile device, this option is not available. However, an easy and quick way to get your life and disability insurance questions answered is with Facebook Messenger. Most requests for help through Facebook Messenger are responded to quickly. You can also call or send a text to the number at the top of each web page.
Hopefully sharing my first experience of buying life and disability insurance has been helpful. If this is your first experience of purchasing life and disability insurance, hopefully, the online calculators at Advice4LifeInsurance.com and the blog post will help you in finding the right coverage for you. Moreover, if you look at all this information and feel a bit overwhelmed by the jargon and details, I am glad to help answer your questions.
It has been many years since my wife, and I bought our life and disability insurance. We purchased mostly term life insurance and some permanent life insurance. Our disability insurance was a combination of coverage through voluntary employee benefits and personally owned individual disability insurance. Here is my advice to you as a consumer. If you are young and healthy, buy life and disability insurance while you can. Some people look at the need for life and disability insurance as so low that they are willing to take the risk. If you see that the probability of something is 5% or less, I am here as a living example to tell you that the low odds do happen and there is no way to know if the odds of death or disability are in your favor or not.
Here is my personal experience to explain why low odds do happen. I consider my family as a typical example of a married couple with two children, and both spouses work. We have a house and a few cars. Our second child was born in 1995. My wife had to take a leave-of-absence from her job as a classroom teacher because of complications with her pregnancy. For several months she was prescribed bed rest. Under these circumstances, she was considered entirely disabled and eligible to collect a benefit from her disability insurance policy. With one young child and another one on the way, her disability benefit was significant to our family.
After our second child was born, I got very sick in the month of March 1996. I went to a hospital emergency room, and from there I was admitted to the hospital. I was in excruciating pain. On a scale of one to ten, it was a ten. Test and scans of my mid-section showed a large mass. My doctor told me that in his experience quick growing masses like mine were terminal. He told me I was dying, and my wife should contact my family as well as our minister because at the rate the mass was growing I would not live more than a few weeks.
That was twenty-two years ago, and I have defied the odds. How or why I can only attribute to the power of prayer by many people and the grace of God. You could easily see the growth inside of me by looking at the MRI scans. Within a day another MRI showed the mass was gone. The doctors had no explanation. The grace of God allowed me to live.
Throughout all the turmoil, I felt relief that I had life insurance and had made a will. My advice to anyone that has someone relying upon them financially; buy life and disability insurance. You never know what life has in store for you. Just because the probability of death or disability is low does not mean bad things will never happen to you.
Most importantly my advice is to join a community of faith and learn more about the power of prayer and God.
“What shall we say about such wonderful things as these? If God is for us, who can ever be against us?” (Romans 8:31, NLT)
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