Its a sad story whenever I hear about someone who dies with a wife and small children and they are left destitute. Its a heartbreaking to see friends and family members literally passing “the hat” to collect enough money to bury this individual. And what's really sad is that with a little planning and foresight this tragedy could have been avoided.
And it all starts with life insurance! Hold on! “I can hear you groaning oh no life insurance”. That is the purpose of individual life insurance. To provide a large amount of money to the survivors when a breadwinner dies. And you notice I said “A” breadwinner and not “The” breadwinner. Unless you are Bill Gates of Microsoft or some overpaid ball player it takes two people working together to provide for the family. Which means that if either one dies the other is facing a serious financial hardship.
Yet instead of working with someone to plan the family's financial and insurance needs in the event the unthinkable happens. Most people depend on the $15,000 to $50,000 group benefit they get through their work. They happily delude themselves into believing that is all the coverage they need.
I've been on many a home visit and heard some of the most stupid reasons why the husband would not buy life insurance. Stupid reason number one; “I would be worth more to my wife dead than alive”! I take this to mean that he is totally worthless right now and does not want to do anything to increase his worth!
Stupid reason number two: “If something happens to me my wife can always marry someone else and have them take care of her and the kids”. My only thought on this argument is too bad she didn't marry someone else period!
Lets take a look at some of the cost that must be addressed when a breadwinner dies. A cheap funeral cost about $6,000. Well there goes a big chunk of that group benefit! And of course if the deceased was hospitalized for a time before death, there are the cost not covered by health insurance. Most people are in debt up to their eyebrows so somebody has got to take care of the mortgage, the credit cards and any other bills that are left for the surviving spouse. And then there are the kids. Many parents plan to pay a part, if not all of the cost to send their children to college. That's a lot of money.
Since most parents are uninsured or under insured at the time of death, the survivor has some hard choices to make, Many end of selling the house because they can't make the payments. Even though they may end up taking a second job. And helping fund their kids education goes right out the window. There just is not any money for that.
What surprises me is that many young parents can qualify for up to a million dollars or more in life insurance without spending a lot of money. If only they took to time to talk with an agent or a good financial planner.
So the next time you hear about the death of someone with no insurance or very little life insurance coverage I hope this will cause to examine your coverages and get with somebody who can advise you. Don't leave you family suffering. Not only have they have lost you but they also have lost your salary!
This article written by Bernard Addison an independent insurance and annuity specialist and a proud member of the Wealth Creations Network. Bernard has a mission to help people protect their wealth and to build wealth. That's why he has joined WCN. If you would like to know more about the Wealth Creations Network Click on the links at the bottom of the page.