K
  • Life Insurance

    By Crystal D. Gifford, DBA, CFP®, Full-Time Faculty, Kaplan University 
    Published July 2015

    What Are the Dangers of Avoidance?

    Every year, many families find themselves devastated at the loss of a loved one who had more life to live, more to give, and the potential to create financial freedom-only to pass on unexpectedly with these dreams unrealized.  It is a tragedy each and every time it happens, but many do not think much about the potential loss until it is much too late.  Recently, upon the loss of a friend and colleague at the young age of 31, I was witness to how an unexpected death can lead to additional strain on the family.  Leaving with no life insurance, and no funds to support the family goals, my friend could not have anticipated the end of her life coming so soon, and neither can so many who pass unexpectedly.  The problem that arises when this happens goes well beyond the obvious grief and heartache of a lost loved one.  When money problems and unrealized dreams are left behind, the memories of those who pass can be cluttered with worry and to-do lists rather than revered for the beauty of the life they lived. 

    Some problems that arise when a loved one passes unexpectedly could be easily avoided with proper planning.  Financial strain, lost dreams for the family, and concerns about funding the future for children and those left behind could be avoided with only a small amount of planning.  Life insurance has become increasingly affordable, and a simple review even when it seems unnecessary can prevent your family from facing the same fate of so many, including my friend. 

    What Are the Costs of Taking Action?

    There are several reasons families do not take the necessary actions to properly plan for unexpected loss.  Some of these are the typical thoughts like "it will not happen to me" or "there will be time for that later," and even feelings that it is too morbid to think about death.   However, many avoid doing a review of life insurance because they believe it will be too expensive.  The truth is, life insurance can be relatively inexpensive, and in some cases could cost even less than the daily cup of coffee or lunchtime soda.  While costs vary based on the insurance provider, age and health of the applicant,  type of policy, and amount of insurance, my experience has been that a family can get a policy of $100,000 for two income earners starting at less than $50 per month, often even without intense medical exams. 

    Other Benefits

    While protecting the family is the primary concern for life insurance, there are several other benefits that can make the process less grueling and even somewhat exciting.  There are some benefits, such as retirement planning and savings that could be packaged with life insurance planning.  Tax benefits, retirement savings, and the growth of your savings can be added benefits of planning ahead.  Meanwhile, your family is protected and you have peace of mind knowing that your family will be able to recover and the dreams you have for your children can carry on. 

    Outcomes

    In the case of my friend, the community of people she had become actively involved in stepped up and is working to support and help with the needs of the family.  While no amount of money can bring her back or help the pain of such a tragic loss, I find myself feeling partly responsible, and I only wish I had opened this tough conversation with her months ago when we met.  I now know it is not about prospecting when we tell others how they can prepare.  This is about their lives and my duty as someone who knows this information to share it so they have a chance to make that decision for themselves. 

     

     

    Crystal D. Gifford is a faculty member at Kaplan University. The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

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