You Don't Have Life Insurance? Why Not?

During my weeks, I often encounter people that don’t own a life insurance policy and don’t see the importance of having life insurance. When I ask why, people often say I don’t believe in insurance, I’m insurance poor, my loved ones can just sell off my assets, I have enough in savings, I have it through work, they can just dig a hole and throw me in or I’ll pay more in premiums than the policy is worth if I live for “X” number of years. Anyway, the list of reasons goes on and on for not having life insurance.

So, why should you have your own life insurance policy? To me, it’s obvious. How about not leaving your family to pay for your debt and medical bills you will most likely leave behind. And if you’re young and have a family, what about lost income your family would have had if you were still alive? Oh, and what about being able to help fund your children’s college if they decide to go to college? You see, the last thing you want your spouse and children to worry about is paying for all the mentioned expenses at a time they have recently lost you. No one, and I don’t care who you ask, wants their family to go through more stress than they need to go through after they lose a loved one. But if you pass away unexpectedly or even expectedly, this is what you’re doing to them. In the past six months alone, I have seen several GoFundMe accounts started and families having bake sales to help pay for funeral expenses. It’s nothing any family should go through.

To continue, life insurance benefits are tax-free and don’t go through probate. Also, if you have a very large estate, what about inheritance or estate tax. One way to cover those tax costs is through life insurance. Because let’s be truthful here, who wants taxes to eat up a majority of their estate? I assume you want to leave a legacy behind for your family or just something positive to remember you. If you have dealt with the death of a close family member, you understand what I’m speaking about when talking about an estate going through probate. Even for the simplest of estates, it can take 1 1/2 years to go through probate. Now if you’re dealing with a large estate, that could definitely take years to go through and involves much technical legal stress dealing with family, attorneys and wills that may or may have not been signed. I mention all of this because I experienced all of this after the passing of both my parents.

Let’s address the reasons I hear from people who don’t own life insurance or who tend to put off purchasing life insurance although they know they need it.

1.) I’m insurance poor. Ok folks, life’s all about making important decisions. Think about everything you have insurance for or are supposed to have insurance on in case you need it. In all of these scenarios, I can not think of a more important asset to have insurance on than your life. It’s the most important! It’s more important than your car, your home, your apartment, your jewelry, your guns, and all of your technical gadgets. Yet, people put if off, don’t believe in it or just don’t want to think about their death. I understand, but just as I said before, life is all about making important decisions. And, this is one of them.

2.) My loved ones can just sell my home, vehicles, land and other valuables. Really? All of those take time to sell and your loved ones just lost you. Do you think they want to think about how they are going to sell off your assets during this time? Oh, and did you remember about probate. This is not an easy and quick process. It involves the government, and the government is not fast. And guess who wants their money in a reasonable matter of time? That’s right! The funeral home, debt collectors and medical facilities. If your loved ones don’t pay these bills in a reasonable time, these bills will be sent to a collection agency and then your loved ones have their credit ruined.

3.) I have enough in savings. Once again, the odds of you having any savings left over after you pass away is going to be slim to none. Why? Well, the odds are that before you pass away, there will be large amounts of medical bills that have accumulated. Surely, you haven’t forgotten how much the hospitals, doctors, anesthesiologists and other medical professionals charge. That’s right! Thousands, if not hundreds of thousands of dollars. Do many people have that much money in savings? Probably not. Things happen that you can’t predict. That’s just life. And, I didn’t mention the high probability of you going into a skilled nursing facility at some point.

4.). I have life insurance through work. That’s great! Are you going to retire soon or work forever? Can you take your life insurance with you after you retire, quit or become disabled? Even so, how secure do you think your life insurance is through work? There are numerous large companies that have done away with paying for life insurance for their retirees. When these companies cut retiree benefits, life insurance is one of the first benefits to go. Look at Sears and GE for example. When large companies are struggling to stay afloat, they will do what they need to do to stay afloat, including cutting your benefits. COVID-19 has caused many companies to close or cut benefits as another example.

5.) They can just dig a hole and throw me in there or cremate me. Ok, now you’re just in denial of the costs after you pass away. Even so, there are costs pertaining to your death including medical bills, debt and other fees you’re not aware of that your loved ones will need to pay. Bills add up and they add up quick. Your death costs your loved ones monetarily, mentally and emotionally. Please make it easier on them by doing the right thing and purchasing life insurance.

6.) I’ll pay more in premiums than what the policy is worth in “X” number of years. That may be, but it’s highly unlikely. Ask yourself these questions. Can I actually save up that much money in one year, five years or even ten years? How long are you going to live? That’s anyone’s guess there. You may die tomorrow, in 10 years or 50 years. And if it is 50 years, are you actually disciplined enough to save your money? If so, will medical bills and other debts take all of your savings after your estate goes through probate?

7.) Lastly, I want to think about it. Really? I’m dumbfounded here. What’s there to think about? If you’re healthy enough to purchase life insurance, there’s nothing to think about. There is no time. Let me ask you this. After you die, when your debts, the funeral bill and other medical bills come due, can your loved ones say, “I need to think about it” in regard to paying your debts? Of course, that’s a big no. Don’t let your loved ones deal with the mess that you left behind for them to clean up.

My hope is if you’re on the fence about purchasing your own life insurance policy, this pushes you over the fence to purchase life insurance. I can not emphasize how important purchasing life insurance is for your family. If you think you can’t afford life insurance, then ask yourself this. Can your family afford the monetary, mental and emotional costs of your passing? I promise it’s easier for you to purchase life insurance than it is for your family to deal with the monetary and emotional toll it takes on them after losing you.

If you have any questions about the cost of life insurance, what type of life insurance is best for you or just questions in general about life insurance and how affordable it actually is, Knelson Financial will be glad to help and guide you in the right direction that makes sense for you. Reach out to us here online or call 270-231-2623.

—Danny