You Never Know When You'll Need It

A photo of my name badge in 1993. dwm photo

 The first life insurance company in the 'new world' was chartered May 2, 1759 to provide assistance to widows and children of Presbyterian ministers who died.

 That's why today is Life Insurance Day - a product and protection that I worked with for 11 years.

 I worked for Aid Association for Lutherans (AAL) and Thrivent Financial for 11 years.  AAL and fellow Lutheran fraternal insurer Lutheran Brotherhood merged in 2003 becoming what became Thrivent Financial for Lutherans and is now known as Thrivent Financial.

Life insurance provides money when its needed most.

It can cover the basics like the cost of a funeral and debt.  Insurance also protects plans and dreams; enables children or grandchildren to attend college, pays off a mortgage, and provides a lump-sum to provide retirement income for the widow or widower.

There are two kinds of life insurance.  Term, which only provides a payment to beneficiaries if the insured person dies while the policy is in force and permanent insurance which does that plus accumulates cash that the insured can borrow or withdraw when they decide what they were insuring is no longer needed.

Term insurance is less expensive than permanent insurance but as the insured person gets older, eventually the risk of insuring them costs more than they want to pay or can afford.  Permanent costs more at the start but along with creating a pool of cash its premiums do not change as the insured gets older.  (This is insurance 101, some policies may need to adjust premiums to stay in-force depending on interest rates or investment returns inside the policy.  If you have a Universal or Variable Universal Life insurance policy, it's important to regularly check on their performance.)

Insurance is cheap for younger, healthier people - who generally don't need much coverage.  However, if you wait until you recognize a need, it could be too late.  Imagine calling a property insurance company while your house is on fire to see if you can buy a policy - it's too late.  

That's the thing about life insurance, you know you need it, you just don't know when the need will arise.