Life Insurance
How Much Is Enough Insurance?
The apostle Paul wrote Timothy, “If anyone does not provide for his relatives, and especially for his own family, he has denied the faith and is worse than an unbeliever: (1Timothy 5:8). Those are strong words. Translated, that means, “Buy enough life insurance!”
Before you can afford to invest a dollar, you must first protect that dollar. Insurance is the wonderful financial instrument that allows us to exchange a potentially profound and unlimited risk for a reasonable cost (i.e., the premium). Because we can transfer this unlimited liability to an insurance company, we are able to live with confidence. We have the assurance that if something tragic happens, then at least we will be financially protected.
Insurance is sometimes maligned as a confusing financial tool. How much do we need? What type should we purchase? How long should we hold a particular type of insurance? What benefits are included in the insurance?
Why Should You Have Life Insurance
Life insurance is one of the most intimate and personal decisions a family can make. However, because of the new American cultural dynamic of “entitlement,” it has become a fuzzy blur of an idea.
One of the main reasons why our country has so many cultural, political, and economic problems today is precisely because the government is doing so many things for its citizens that the founding fathers never intended. As individual citizens, we have failed to take responsibility for accumulating sufficient assets to cover our retirement, and we have failed to protect ourselves from the high cost of healthcare with adequate, self-paid insurance protection.
Many people believe they are entitled to healthcare and retirement benefits through government-created programs. Not only is there a cultural cost to shifting responsibility for our financial welfare to the government, but there is also a huge monetary drain. If these entitlement programs were eliminated from the budget of the the United States, our country would not only be able to significantly reduce taxes, but it could also run a continual surplus. Over 50% of the federal annual budget is earmarked for social welfare programs, and that percentage continues to increase.
In a free society, each person has an individual responsibility to appropriately manage his own insurance and financial plans. That is not the responsibility of the government. If we fail to take individual responsibility, we contribute to the fiscal (and social) decay of our nation. This phenomenon is almost never discussed in the mainstream media, but the truth of the matter is that each of us bears our own personal responsibility, whether we retire and live to 125, become disabled, or die prematurely. That is our individual privilege and also our responsibility.
Regarding insurance, remember two key points.
- First, be responsible and buy the appropriate insurance that will cover your needs.
- Second, remember that insurance must be purchased before you need it.
You have to buy insurance before the risk it is designed to cover actually occurs. You can’t until you have an auto accident to buy insurance to cover the accident. Nor can you wait until your health deteriorates before you purchase health insurance. If you are ill, no insurance company will reasonable accept you.
The lesson is clear: Apply for insurance before you need it and while you are eligible.
Speak with a Recommended Financial Professional about life insurance >