Life insurance: More than money?
Smelling a sure sale, the young life insurance agent leaned toward his prospective client and explained: "You're betting you die young. I'm betting you don't. And you hope I win!"
Life insurance has more to do with death than life. Collecting is not a question of if, but when. That makes life insurance a sure thing. Or does it?
An insurance company recently notified an elderly friend of mine that the premiums on his universal policy would quadruple. The savings component built up in the early years of the policy was gone. And payments would continue to escalate each year until he died. He agonized over continuing the policy, as he could not afford the huge increase.
His family discussed the pros and cons of maintaining the policy. They concluded that the original reasons for the insurance policy were no longer relevant.
What would you have advised him to do? Does biblical stewardship fit into your thinking? Or is it just a matter of dollars and cents?
Life insurance is an old concept. In ancient Greek and Roman cultures, "benevolent societies" cared for the families of deceased members and paid for funeral expenses. Canadians have had the opportunity to purchase life insurance since 1847 when Canada Life Assurance Company opened its doors.
Life insurance continues to be a prudent component of many personal financial plans. Ensuring the financial wellbeing of a spouse and dependent children in the event of death is a good thing. Term insurance rates have decreased dramatically as our average life expectancy has increased, making this protection more affordable.
Your concept of stewardship should influence the type and amount of insurance you decide to buy. Life insurance is not about "supplementing" your trust in God in case He won't come through when the going gets tough. It's about wisely using the resources you have been entrusted with, while fully recognizing that God is sovereign.
If the goal is to protect your family while your children are dependent on you, renewable term insurance will take care of that. Odds are that you will terminate the policy before you die. But that's just fine if the insurance provided protection while you needed it.
Or is your objective to die rich or to pay less tax at death? Whole life policies might be the answer, but inflation, life expectancy and tax legislation need to be considered. As my elderly friend found out, projections that looked good when he signed up, may not add up two or three decades later.
Life seasons change, and as they do the need for life insurance will change too. A young family, big mortgage and fledgling business call for a different approach than almost retired with grown children and a portfolio of investments. And when you are rich enough to retire, you are probably rich enough to die.
Life insurance is a "pay now, die later" proposition. Wise decisions should include consideration of potential need and the purpose of life insurance in the context of biblical stewardship.
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