No one really likes to talk about this topic, but as a Life Insurance Representative, I get to see a lot of variations and the thought process of what people think about life insurance and how they handle devastations in their family .
I live in South Los Angeles and I can say that almost every week I see two things: Families and friends waving large signs with a picture of a deceased loved one asking for donations or someone posting a GoFundme account to raise money for a burial. Sometimes it’s a picture of a small baby (so sad). This is what I call “Double Devastated” or (DD).
DD means the families are not only dealing with the loss of a loved one, but are now faced with having to find thousands of dollars to bury them. Not to mention if there are children involved: Who will be (financially) responsible for them? There is no mercy from the cemetery or mortuary side (these are two separate costs) to make payment arrangements or even write a check. The rule is that the money must be paid in full at least 48 hours prior to the funeral service (check with your local funeral/mortuary).
Do you remember the recent story of the Mom who created a Gofundme account and used the remaining proceeds to purchase a car? (http://nypost.com/2015/11/09/slain-boys-mom-sparks-anger-by-buying-new-car/). Donors were very angry, because the money (I mean every dime) was supposed to be used for covering the funeral expenses. You see, people do have a heart of Gold, but it comes with stipulations when you are asking for strangers (and even friends & family) for their hard earned money. But guess what? If she had a life insurance policy in place, it wouldn’t have been anyone else’s business what she did with the remaining proceeds and would have been kept a private matter.
There is nothing worse than sitting in a room with family members trying to figure out how to bury a loved one. I’ve been involved with my own family who faced such devastation because there was no policy in place to ensure that expenses would be covered*. It doesn’t take away the grievance, but it does help to know that you don’t have to hit the streets begging for money only to raise a few hundred dollars.
I have to admit, before I became a life insurance representative, I had a laid back approach about maintaining coverage for my family. I always thought, I could get it next year because hey, I will live forever, there is no real rush. But then, before I became an agent, I lost two people in my family (in the same year) and realized we needed to take care of business and quickly. Life is not promised to us and although we don’t like to think about it, we can’t be selfish and leave that burden on our living family members. It’s just not fair.
Now, some may have access to $10K-$25K of available funds to handle a burial or may even have pre-need burial insurance**. But what about those who don’t have any type of insurance at all? Who should actually be purchasing insurance? Let me explain:
So as Suze Orman states, we know that the loss of income for someone we depend on can be quite devastating. In fact, even with two live incomes, families are barely making it, yet many do not plan in the event if something happens. What will they do to replenish the family to a state of well being or should I say, ensure they can still keep their home, car and raise the children until they are adults?
So the question again is knowing that you have no backup plan for replacement income, why risk your family and not purchase life insurance? The #1 reason why people don’t buy life insurance is because they think it’s too expensive. (https://www.lifehappens.org/blog/the-no-1-reason-people-dont-buy-life-insurance/). Yet money is spent to insure our cell phones, paying for cable, buying coffee and even fast food.
Unlike auto and medical insurance, life insurance is not mandatory, but is absolutely necessary! Whoever thought that medical insurance would become mandatory, tied into the government with such stiff penalties? I believe that life insurance is right behind medical because when a loved one dies, the hospitals will go after the family estate to try and retrieve their money. It’s truly no joking matter.
When I sit around the table with a family, I share many stories of how important life insurance is. For the most part, I am able to close but if for whatever reason they still decide not to move forward, I ask if I can follow up with them because my fear is always, I don’t want anything to happen, and I missed an opportunity to help a family, then my prayer is: “Lord, please keep this family protected, even if they don’t get anything through me, let them get something, and also ensure that they are purchasing the right type of insurance.” (Bad life insurance is another devastation, will discuss in another blog post).
So now I ask you the question, what are your reasons for not purchasing life insurance (outside being ill)? Did you have a previous bad experience? Please leave your comment below.
*If you have an life insurance policy (not a work policy) but your own, most mortuaries will take it as a form of payment and will pay the difference to the beneficiary once the charges is paid in full.
**Preneed life insurance is an insurance policy whose benefits cover the cost of the predetermined expenses of a funeral, cremation or burial. The expenses typically include standard funeral home services, funeral merchandise, church services and even burial services and merchandise.