Kudos to you! I think the same way!!

I could have included in my prior entry that our children were insured – from the ages of 10 and 8 and it very much against my husband’s wishes. The insurance agent at the time even felt my husband’s disdain.

However, today. my children have a $50,000.00 policy each with two riders attached – one for any disability (payments will always be made) and one for accidental death. In this whole life policy, there is a provision for increasing the sum of the insurance by $25,000 on each of 7 different occasions at at the same cost as when I took out the policy!! Now – what do you think I pay for this insurance with the two riders?? For both boys it comes to $32.00 a month!!!!!!

This is a cheap investment to include in your budget and any parent who thinks about this aspect should understand that insurance is part of a family business plan. Insurance, when purchased for young children, provides those children with inexpensive insurance for the rest of their lives. Young children have NO physical ailments yet – which would cost the person much more money to be insured – that is if they could get insurance at a later date!!

In addition, there are other aspects to understand about buying cheap insurance for children. One is that there is a cash surrender value building within a whole life policy. When the child takes over the policy, this insurance can be used as collateral for a loan. You can’t do that with RSPs.

Also, there are times when you can take money out of a whole life policy – when really needed – without damaging the whole life policy in any way. It might even be tax free!! This is a great investment for anyone to consider.

As you mentioned K., there is the time when the payments for a policy will end – the insurance will be paid for by the premiums. This is fantastic for the person involved. No more money is required to expend on this insurance policy and you have guaranteed protection for the life of the policy.

Now, one thing that I have had to put up with is the thought that you don’t ever want to provide for your child’s ultimate demise. Well, no one would!! However, insurance is an investment and definitely part of the overall family’s business plan. Do you know how many children die? There are more than you would think. Teenagers are the most vulnerable to car accidents – drinking and driving, being with others in cars etc. There are young adults with type one – early onset diabetes – and many of these children die in early adulthood. Also, no one likes to think of all the children who die of cancer either. As well, when children develop chronic diseases which start in early adulthood then the young insured adult is protected with adequate insurance when they do marry. Having this insurance policy will then provide perhaps adequate insurance protection for their family. I did mention that this is a good family business plan.

One final thought about buying insurance for anyone young or old – is that we have no control over when we die. Being prepared for the inevitable might seem goulish to some individuals, but would you rather have parents weeping inconsollably, unable to bear the grief and to handle the costs of a funeral?? Not everyone is able to provide for a $7000.00-10,000.00 funeral out of their savings account – immediately. This should be by far one of the reasons why parents should consider the importance of life insurance for their offspring. It’s hard enough to deal with the thoughts of burial, caskets, ceremonies, possibly cremation, internment at a cemetry, and the after funeral luncheon. This would be the most vulnerable time of your life – because you have outlived your child. That is one of the hardest messages for parents to accept. Money may not be everything in life but it helps in times of great trauma to the family.

Would you want to have your family so unprotected because someone has told you that buying insurance means that you are wishing for your child’s death?? Hopefully, many people will wake up to the fact that we are to be prepared for all occurrences in life and the possibility of death is just one of them.

Gail had mentioned critical care insurance in a recent blog. I investigated this insurance because my agent said that he considered it far better than death insurance. As a result, I am considering a policy of roughly $200,000.00 for each son for again roughly $30.00 a month. Now tell me – isn’t this a wise investment for my sons? If anything ever does happen they can collect. If any of the many listed diseases don’t ever happen they will also collect because all the premiums paid will be returned to them when they surrender the policy!!

Insurance is the wisest investment for all to consider at any time of your life and should be the basis for every family’s portfolio or business plan.

I have a story – mine, unfortunately – about life insurance.

I was raised in a family where I was insured – $500.00 in those days long ago. When I turned 21, my father rolled over the payout from this policy into another policy which I took on – a $5000.00 policy. When I started to work, I had the basic life insurance that they provided which was $25,000. and then I had the option to have additional term insurance up to 5 times my income. I did sign up for this as well. So I was insured sufficiently as a young single woman.

Now for the problem. I met a man who didn’t think insurance was all that necessary. I did marry him but insisted that he have insurance if we were to have children. It was a difficult sell but I did get him to understand (or so I thought) that insurance was necessary for all the reasons which have been given before – to cover immediate death costs, to provide for missed income, especially when children are young and the costs to help educate children in future can be so high, to pay off most or all bills – which might include a mortgage, and maybe to have a little over to use as necessary. We don’t know when we will die and the insurance gave me a sense of security if one of us died especially when the children were young. We each took out $100,000.00 whole life insurance as this was all that we could afford.

Well, the problem came after 25 years of marriage when he decided that he had the right to surrender his whole life insurance which was worth at this time $67,000.00 – without my knowing it. $9,000.00 in income tax is owing on this money and needs to be paid next year. My security went out the window!! I wouldn’t have done this to my spouse but it was his and he wanted it so that he could live his life to the full. He had no consideration of the possible effects that his death would have on me if he dies before me.

My advice to anyone is to think about how the policy is owned. I allowed my husband to be the owner of his insurance even though I paid all the insurances from my pay cheques. I shouldn’t have done so because he was intrinsically opposed to insurance at the beginning of our marriage. I should have realized that in old age he could revert to his old thinking patterns. The right answer might be to have shared ownership of policies – which would have required a signature from the spouse (if this is possible) or to have ownership of the other person’s policy. I have since learned that the province of Quebec is the only province which does it this way.

Learn from my experience! Don’t ever give your security away or have faith that your security will be fine in the hands of anyone else – especially a spouse. My insurance agent uses my example when talking about ownership with young couples – as they are filled with hope and trust. My insurance is now being left to my children – my husband (at this point) will get nothing – and he deserves nothing. For me, he broke a crucial vow to the very issue of what is important in a marriage. I also changed my Will (without his knowing it) to have family members be executors and POAs.

Be afraid – be very afraid of people who reject insurance as a need.

Karen’s comments about life insurance beneficiaries is an echo of the conversations I had today with my lawyer (for my will) and my financial planner (for life insurance). It was recommended to me that should both my husband and I die, the insurance pays out to our estate (it’s so funny that I have an “estate” — sounds like I’m super rich!) and not to our daughter directly until she turns 25. Yes, taxes will then have to be paid on the insurance benefits but the money can be kept in a trust until she is old and wise enough to use it. Preferably, after she’s gone to university or college.

Just sayin’ -