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I couldn’t have known at the time how important my dad’s life insurance policy would be. It’s one of those things a lot of people might not think about until it’s too late. As an adult, I understand the importance of life insurance — but back then, I was just a kid.
I don’t remember too much about that time. I was only 8 years old, the oldest of three boys. We were a typical middle-class, American family from Holland Township, New Jersey. We didn’t have the nicest house or a fancy car.
My dad worked hard doing clinical research for a company that was part of the Johnson & Johnson family. He had moved up at his company, but wasn’t quite at the executive level. My mom worked for a while, but when the second of us boys was born, she stopped. So my dad was the sole provider for us and my mom was the caregiver.
My dad traveled a lot for work, going to Europe for clinical research, but on one particular trip, something wasn’t quite right. He came home and told my mom he hadn’t been feeling well, so he went to the doctor and they had him tested.
He was 36 years old and he had colon cancer.
That was in September, 1991, and he passed away December 21. His funeral was on Christmas Eve.
How life insurance changed my life
I was 8 when my dad died so I didn’t know what life insurance was or that my parents had a policy. I definitely wasn’t aware of how life insurance works and I still don’t know all the specifics about my parents’ coverage. If I had to guess, I’d say the policy was worth about $1 million.
My mom was under a lot of stress, which makes sense when you’re suddenly alone with three young kids. I can’t even imagine what she had to deal with, but I never got the impression that finances were adding to that burden. Life insurance gave her the ability to focus on her kids and to support us in different ways.
The beginnings of a digital entrepreneur
I remember when we got our first computer, an IBM PS/1. I started out playing kid games, but from there I really started getting into computers as the internet became more popular. We upgraded to a Packard Bell and I started learning how to build web pages with basic HTML. It was my first foray into the world of technology and all the things that became the internet — and it was amazing.
Computers weren’t a mandatory thing at the time. They were more of a nicety, so having the financial means to own a computer changed my whole trajectory in life. I got to play on the internet and learn valuable skills, which led to me running multiple internet-based or digital businesses over the past 20 years.
I don’t know the path my life would have taken had my family not received the benefits from life insurance, but I know our financial situation would have been very different. I don’t think my mom would have been able to buy us that first computer. Without life insurance, she probably would have been forced to immediately start working again and the career path I took may not have been possible.
A taste for world travel
With our financial cushion from life insurance, my mom didn’t have to work, and me, my mom, and my brothers could travel together like a normal family. These weren’t luxurious trips by any means, but we did go on a lot of cool adventures.
My mom bought an RV and we traveled all around the East Coast camping and hiking. We’d fly down to visit my grandparents in Arizona and rent an RV to travel around the Southwest. We visited New Mexico, Arizona, Colorado, and Utah, exploring places like Arches National Park. My mom was never afraid to pull us out of school for an adventure, and she’d still have us learn while we were out traveling.
Even though we didn’t stay in super nice hotels, these adventures cost money. But because of the life insurance benefits, my mom could take care of the costs for travel and give us those experiences. Experiences we couldn’t have afforded without the life insurance money.
Having those memories from our travels has greatly affected who I am today. My wife, Christine, and I love to travel, and I tend to put more value on having an experience versus having material possessions. I like to try new things and I’m not afraid of the unknown, and I think those early travels really fostered those attributes within myself.
How does life insurance work, and is it worth it?
Simply put, life insurance is financial protection for your loved ones when you die. You pay premiums to a company and when you die, the company pays money to your life insurance beneficiaries.
If you’re married and/or have kids, you need to think about what happens to your debt when you die and the expenses that could be passed on to your family. So if you’re wondering, is life insurance worth it? In the case of being married and/or having kids, I believe it is.
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When you’re shopping for the best life insurance, there are two primary types of coverage you need to understand the differences between: term life versus whole life.
- With term life insurance, if you die then your beneficiary (or beneficiaries) receive a death benefit payout for the amount of coverage you signed up for. It’s usually tax-free, and you get to choose how much coverage you want and how long you want it to last. Your policy only pays out if you die within the period of time you choose. For many, it makes sense to get a term life insurance policy that covers your children or potential children through college.
- With whole life insurance, or permanent life insurance, you’re covered for life. Because the coverage is permanent, you can expect the premiums to be higher compared to term life insurance. As you pay these premiums, a portion of the cost is deposited into a tax-deferred cash value account that can gain interest. You can borrow money from this cash value account and even take loans out on it, but this could affect the amount of death benefit your loved ones receive if you withdraw too much money or don’t pay back your loan.
Today, there are a lot of new and rich options out there if you want to compare life insurance quotes. For basic policies, there are online services that can help you quickly get a plan set up without spending a lot of money. Most of the carriers also provide examples of what sort of policy and coverage would be a good fit for your income, family size, and expense levels.
For my family, having the benefits of life insurance allowed us to keep living without much financial worry, and I think that’s the whole point, regardless of the specifics of the policy you choose. You don’t know what’s going to happen — and you hope nothing will happen — but if my parents hadn’t had that life insurance policy, my life would be a lot different.
I’m young and healthy, so why would I need life insurance?
My dad was only 36 when he died and he was pretty healthy. You just never know what might happen. If anything, when you’re young and healthy is the best time to get life insurance because it’s so affordable to get at that time.
And from that point forward you don’t have to worry about how your family will get by financially if you die unexpectedly. Maybe you don’t have a family yet or anyone that relies on you, but that could change in a few years. Right now, your policy options will typically be the least expensive they’re ever going to be, and you can lock in a great rate for the foreseeable future.
I looked at a million-dollar policy just the other day with premiums for about $58 per month. So for a relatively low price, you can have that 100 percent peace of mind and help make sure your family is protected.
What if you don’t have kids?
Christine and I have been married for six years and don’t have any kids right now, but after we got married, we made sure to set up a basic trust and will — and a life insurance policy.
It was important to me to know that certain expenses would be taken care of if I were to die. Before we got married, I didn’t have life insurance because I only had my mortgage and nobody else to worry about. Now I want to make sure Christine doesn’t have to worry about finances if she has to deal with my death. She could continue to work and provide for herself, of course, but the grieving process is different for everyone. You can’t know how much time you’ll need, or whether you’ll need to take an extended leave of absence.
Things can affect people in different ways, but the fewer things you have to worry about, the better. Life insurance is there to help alleviate some of the stress of going through a difficult time.
Christine and I also took out a long enough life insurance policy to give us a buffer if we were to have kids. The recommendation is to have a policy that can last through the kids’ college years and to the point where they become self-sufficient, which is exactly what we did.
How can I get started?
All it takes is a bit of research and maybe a chat with an insurance agent. For starters, you need to figure out what kind of life insurance policy you’re interested in, including how much coverage you’re looking for and whom you want named as beneficiaries. If you have some ideas about those points, then you’re well on your way to getting a policy.
Traditionally, people worry they’re going to have to take a medical exam to qualify for life insurance. I know for myself, this was a barrier because you have to get it scheduled and they take blood and maybe a urine sample, and I didn’t want to have to go through all that.
But now there are new companies that will only ask some simple questions about your age and relative health and that’s it. There’s no medical exam, so it’s very straightforward. For a quick and easy application process, you can check out companies like Bestow or Ladder. With both of these companies, the entire application process is online and can be completed in a matter of minutes.
If you think you may need life insurance, take the time to look into it. For any loved ones you could possibly leave behind, the benefits will be well worth it. For my family, my dad’s life insurance policy was life-changing for me, my brothers, and my mother.
I wouldn’t be where I am today without life insurance. So I’m grateful for the forethought of my father to take out that policy such a long time ago and change the course of my life.
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