Too Much Insurance?

[kath]

Hello good friends.

It's hard to imagine, but my husband passed away nearly 21 months ago. We had some insurance and it helped pay for his funeral and most of our credit card debt. We bought our house 5 years ago and I'm left with a 25 year loan. I listened to "expert" advice and instead of putting money toward my mortgage, invested in stocks. Well, you proabably know where I'm going with this...there isn't much left, certainly not enough for college for my kids or retirement, but it paid our health insurance while I was out of work and there is a small bit on hand for emergencies.

Since I started this new job, I have taken every available penny of life insurance offered, almost to where I am working to pay for insurance. I am totally paranoid about leaving my kids and their step sister saddled with poverty or debt. Has anyone else gone overboard on insurance since your spouse left? I don't buy much these days for me as my sense of what is important and necessary has changed immensely. I see our lives here as very temporary and fragile and I am wondering if I'm being silly worrying too much about the future.

Just curious,

Kath

[kayc]

Kath,

I haven't gone overboard buying insurance because I haven't had any money to spare to do so. Just as I lost George's income, here came hospital and doctor bills and no way to pay them, so I remortgaged my house...add to that what I got took from John and it means I will work until I am 76 or have to sell my beloved home. I wish there was another way but I can't worry about what I can't change.

My situation is different in that my kids are grown and hopefully self sufficient. The retirement I sacrificed to put away for all these years has dropped at least 42% last year alone, and that was moderate/conservative. I think a lot of us in America are in the same boat. We can't even take out of it to stop the losses without paying huge penalites.

But the issue really isn't about insurance or stocks or retirement. The real issue here is how our view of the future was changed when our spouses died. We once took for granted that we would HAVE a future, that we would grow old together, that life would be a certain way. Now we realize that we can't take anything for granted, that there are no guarantees. We don't want what happened to us to happen to our loved ones. We want our children provided for in the event that we die. We don't look at life like we once did, things like provision are a very real consideration. It's not uncommon, when one has lost their spouse, to obcess over death. People are uncomfortable talking about death, yet it's important to us that they listen to us when we tell them where our important papers are and that we have our beneficiaries in order and that we don't leave a huge mess for our kids when we're gone. They may not want to listen to us now but they may thank us when we're gone.

About the insurance...try to get some expert opinion about how much you should have and stick to that. Do not short yourself now in order to go overboard on tomorrow. Try to take a balanced approach, it's important to take care of your kids' future, but you also need some things today.

[MartyT]

Since I started this new job, I have taken every available penny of life insurance offered, almost to where I am working to pay for insurance. I am totally paranoid about leaving my kids and their step sister saddled with poverty or debt. Has anyone else gone overboard on insurance since your spouse left? I don't buy much these days for me as my sense of what is important and necessary has changed immensely. I see our lives here as very temporary and fragile and I am wondering if I'm being silly worrying too much about the future.

Kath, dear ~ Since my oldest son is a well-respected professional in the insurance industry, I took the liberty of sharing your concerns with him to see what he would recommend to you. This is the response I just received from him via e-mail:

Mom,

My response would be as follows;

Kath,

I'm so sorry for your loss. As someone who has been in the life insurance selling business for nearly 20 years, I can say that I have spoken to many people over the years in your circumstance. Thankfully, I was able to provide many of them with a lot of support too. My advice would be to make an appointment with an insurance professional whom you trust. Have that person do a life insurance needs analysis that will help you nail down just exactly what/whom you want to provide for. Once that number is established, then you match it up with a premium you can comfortably afford. In my professional experience, buying life insurance from credit card companies or offers that come in the mail from your bank etc. tend to be very expensive and you often do not know what you are buying. It makes much more sense to have a professional evaluate your needs and consolidate them into one plan that will you give you peace of mind and the simplicity of paying one premium instead of many.

Chris Tousley, LUTCF

Farm Bureau Financial Services

Phone (480)483-8787

Fax (480)483-8981

Registered Representative/

Securities & services offered through

Equitrust Marketing Services, LLC*

5400 University Avenue

West Des Moines, IA 50266

877/860-2904, Member SIPIC

*Company of Farm Bureau Financial Services

[leeann]

I didn't even lose my spouse and I'm already thinking about how I can make things easier for our kids when my husband & I do pass.

I thought I was a bit nutty for having such thoughts. BUT....

So I so appreciate you sharing this quesiton with us Kath. So now I know I'm not alone in thinking of things like this .... now.

And perhaps hub and I in the near future will meet with an insurance person and have that needs analysis done too as Marty's son so generaously shared here with us.

But thanks.. you really affirmed for me that I'm not nuts to be thinking about this... however prematurely...

I'm thinking of things like even in the house here. And I thought that maybe I would let both kids know via a letter of exactly what they need to do and whom to call, contact names and numbers.. etc.. after we pass. I even thought it would be good to take pics etc of the things we have stored in boxes and put them on the outside of the boxes so they would know instantly what is in them. And perhaps even have an inventory on paper by box so the kids can see what there is. Now maybe this is crazy.. but I'm thinking of all of the things that took so much time and were so difficult after going through my parents' home and having to clear it and list it for the market.

But this has been on my mind lately and I am jotting down some ideas as I think of them.

Yeah.. so maybe I am nuts. Oh well. I just so want to save them from any more pain than they will already be feeling when the time comes.

(((((hugs))))) to both you and Kayc too.

leeann

[marsha]

Leeann - You are definitely not nuts. Years before my parents died, they sent my brother and myself detailed instructions on where their important papers were, who to contact, info on the plot, etc. Let me say that this information helped us so much in not having to deal with the angst of what to do - they had already given us their explicit instructions. My husband and I did all of our necessary paperwork as well, prompted by both of our parents' deaths. I never dreamed that 10 years later I'd be doing the same for my husband. Right after Joe died, I was paranoid about telling my friends to get a will together, POA, all that stuff. I think I drove a couple of THEM nuts. But when your family is in shock, having these resources is important. I think all of your ideas are right on.

Kath - remember that your kids, young and strong, will be working, hopefully, supporting themselves. So don't think of your life insurance as something that will have to support them. As long as you have enough to pay for your funeral and outstanding debts, that minimally is a good start. The life insurance payments shouldn't be so high as to affect your own well being. Hopefully you'll be around for a good long time, love. Marsha

[kath]

Thank you all for the good advice. Marty, your son makes a lot of sense. I can speculate what I need for my kids, but a professional would be better able to determine that. (I just assumed they were in the business of selling insurance and would not be an independent judge.) Leeann, thank you for helping me feel I am not crazy, worrying about stuff like this. It's been on my mind a lot and you and Marsha both gave good ideas on how to let everyone know where to look for information, especially since Bob's oldest daughter lives far enough away that she isn't familiar with where I keep files and important papers. Her and her husband have agreed to take my kids if anything did happen.

I just feel this urgency to be prepared, to save them any additional hardship. Grief is tough enough. Kay I'm glad you understand that we can't take anything for granted. This need to provide is solely mine now. It wasn't planned that way, but that's how it is. I tell everyone I plan on living to a hundred. Of course, I only thought I'd be alone for about the last 20 years of that, not the last 50!

Thanks again. I love you guys!

Kath

[kath]

Just wanted to let you all know that I talked to a professional advisor. He found ways for me to reduce some expenses and listened to my fears about my heirs. He showed me what to do to take care of them and what I can get rid of because it is just an excess expense with very little benefit. I can't tell you what a relief it is to know that my concerns are valid and manageable. Thank you for all your advise. It helped me step into yet more unknown territory.

Love ya,

Kath