When reality doesn’t meet our expectations, we get disappointed.
So when I heard a 50-year-old man complaining that he wasted 20 years of his life paying into a term life insurance policy, I couldn’t help but think: Is life insurance a waste of money, or did he just not have the right expectations going into it?
What Good is Life Insurance?
Not everyone needs life insurance. A single 24-year-old with no debt and no family might not want to pay into a life insurance policy – especially if they don’t expect to have a family any time soon. A 30-year-old mother of three who works as a physician would probably want to have a very large life insurance policy in case she passed away before her children were grown.
The point of life insurance is to provide for your loved ones after you pass away. Your goal may be to provide enough to pay off your home and to pay for your childrens’ college if you passed away early.
But here’s what life insurance is not: It is not a free pass to neglect saving for those events. It’s simply irresponsible to treat life insurance as such.
Remember that 50-year-old who grumbled about paying into a life insurance policy for 20 years and claimed that it was a ‘waste’ of his money? He didn’t have any retirement savings, any college savings, or an emergency fund. He was expecting his life insurance to do something it wasn’t designed to do. He didn’t take responsibility for his lack of discipline in saving.
What that person didn’t realize was that his life insurance policy gave him exactly what he paid for all those years: peace of mind.
Every month that you pay your life insurance premium, you’re paying for the peace of mind in knowing that your family would be covered if you passed away. That’s what you’re paying for. You’ll never see the money . . . you have to die before it’s paid out. A simple term life insurance policy gives people exactly what they pay for. Expecting anything more would be unrealistic.
End of rant.
Okay, seriously though. Term life insurance isn’t a waste of money if you set your expectations correctly. That’s like thinking your pickup truck is a waste of money because it doesn’t get 100 miles per gallon. It wasn’t designed to get 100 mpg. It was designed to move you from point A to B. We set ourselves up for disappointment when our expectations are out of sync with reality.
The Next Step: Researching Life Insurance
I strongly encourage you to do some research about term life insurance. Bob at ChristianPF.com talks about the importance of life insurance here. Get the information you need to make the right decisions when it comes to life insurance!
Do you have life insurance? Why or why not? Leave a comment!