Prior to getting into the financial planning business, I really never understood the reasons – and importance of – life insurance for young people…
Thankfully, most of you have never faced a serious illness with your child, and I pray that you never know how that feels. I would like to share a story with you about my little girl and her near death experience as an infant.
Shortly after birth our daughter Abigail became quite ill. She lost the use of her left arm and much of the left side of her body and she seemed to be in constant pain and distress. Upon examination they found a mass growing on the INSIDE of her spinal cord. Further investigation discovered aneurysms in her circulatory system with the largest one located on top of her heart. At just a few weeks old, she underwent an open heart surgical procedure which was recommended, in the doctor’s words, “…to prevent death.”
That procedure did prevent her death, and to this day she still has that tumor in her spine. Many elements of her case are extremely rare and even after genetics testing, we have no definitive answers as to why the aneurysms formed, if they might form again, or what the mass is inside her spine.
What does any of this have to do with Life Insurance?
Life Insurance is simply where the insurer promises to pay a designated beneficiary a sum of money (the “benefits”) upon the death of the insured person, and may include “benefits” for loss income or funeral expenses. Life Insurance protects your family from your loss of income due to an untimely death. But outside of a group employer, you can’t just apply for life insurance and automatically get it. You must medically qualify for the coverage. That means that the insurance company will determine if you are an “acceptable risk” for them to take. They will ask questions about your medical history, and test your blood and urine. At the conclusion of the underwriting process, if you are very healthy, then you may get the policy at a “preferred rating”, which means you receive the policy as close to free as possible. If you are at “reasonable risk”, but not squeaky clean, then you may receive a “standard rating” – this is average. On the other hand, if you are too great a risk then they may “decline” your application.
We applied for life insurance for my Abigail after she fell ill – she was declined. Today, her disease remains to be undiagnosed. So when my daughter becomes of age, she will likely never have the choice to protect her future family with life insurance.
What if we had purchased life insurance before she got sick?
If we had purchased life insurance for her in the few short weeks between her birth and when her symptoms began, she would already have it and would have the choice to keep it forever! Additionally, she would have had the options of increasing her coverage amount in the future WITH NO MEDICAL QUESTIONS.
Do you want to protect your grandchild or your child’s future insurability?
Many of our clients have chosen a low cost plan that has future increase options, which would max out at $400,000 of life insurance in their future.
The cost (or “Value”) for that option: for a girl age 0 to 10 is $42 per year, or $48 for a boy of the same ages. This option has an initial death benefit of $25,000 and we can begin this policy as late as age 25.
The real question should be, “Why wouldn’t we buy life insurance for our kids?”
Please call Kristi or me, if we can assist you or someone you know!