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Confronting a Parent's Fear

I have sold hundreds of life insurance policies. Some have been policies for young children whose parents are looking to protect their child's insurability. Some have been for retirees looking to make sure that they have a legacy to provide to their grown children. Most have been to parents with young children who realize, either theoretically or from personal experience, the tremendous hardship that their premature death would cause for those who depend on them most.


I know that fear firsthand. As a parent to my two beautiful children, I have two big concerns. The first is one that all parents must to learn to live with--the fear that something terrible could happen to them. That, sadly, is a fear we must all learn to live with. The second is the concern of something terrible happening to my wife or me, and the emotional, physical and financial impact that would have on these two little people who rely on us for everything.


I would never be able to change the fact that they would be living, from a very young age, without one of their parents. But what I can do, what all of us who have young children can do, is make sure that the life we envisioned giving them still comes to be by making sure the financial resources are there to make it happen. THAT is the purpose of life insurance and it is the sole reason why I always dedicate my September commentary to Life Insurance Awareness Month.


As parents, we worry. It is what we do best. So then why is it that so many parents don't worry about what would happen to their children if they weren't there for them anymore?


I know what you are going to say..."I do worry about that!" Do you? Because if you do, there is no good reason why you don't have life insurance. Many of you do have it, and that is great. Consider this your annual reminder of why it was such a good decision. But for those of you who are among the millions and millions of Gen X and Millennial parents (and will-be parents) that don't have it, it is time to wake up and put this all-important duck in your row.


This is where the nay-sayers, the people who "don't believe in life insurance" (which I have never understood; it isn't Santa Claus), say that it is expensive, involved and a waste of money. A decent life insurance policy for a healthy person aged 25-40 should cost less than a cup of coffee a day. Now granted, how old and how healthy you are will determine whether that is a cup of coffee from your local diner or a grande half-caf vanilla latte from Starbucks, but the point is NOT expensive.


As for involved...not really. An application, some medical questions, a blood and urine test, and you are on your way. Sure, the insurance company may ask for copies of your medical records, but that is something they request, pay for, and take care of.


I am not going to answer whether or not it is a waste of money. If you are questioning that, all you need to do is find the spouse or children of a breadwinner who passed away prematurely and ask them if they think the life insurance that their loved one purchased was a waste of money. If you are not convinced, find another spouse or child of a breadwinner who passed away prematurely and didn't have life insurance and ask them if they wish they had. Unfortunately, any of those people will be able to answer the "waste of money" question better than I can.


The truth of that matter is that if your family is unlucky enough to be met with a tragedy, life insurance can be the most important purchase you have ever made. At its core, it provides a financial cushion that allows the surviving family to make important decisions free of financial pressure. And when everyone else, from creditors to the IRS, is looking for money, the life insurance company can be the one bringing a check. It is a powerful statement of love and devotion to your make sure they are provided for, whether or not you are there.


The good news is that the statistics on life insurance ownership continue to improve. The 2016 Insurance Barometer Study by Life Happens and the Life Insurance and Market Research Association (LIMRA) found that nearly 86% of individuals agree that most people need life insurance. The same study also reported that 60% of consumers actually own some sort of life insurance (either personally or through their employer) and that 75% of those who do are open to recommending it to their friends and family, including 77% of Millennials.


So then why the chip on your shoulder about life insurance, Ari? Maybe it is because this same survey still reported an alarming number of people who would have trouble paying their monthly bills within six months if the primary breadwinner passed away. Maybe it is because as a financial advisor I have seen the economic ruin that can ensue because a family suffers an unimaginable tragedy. Or maybe it is because I like to preach what I practice...I personally have four life insurance policies for more than $2M of coverage.

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