I was late to the dad game.
My wife and I like to travel, go to concerts and eat at nice restaurants. As a point of fact, in the past you easily may have found us eating at a nice restaurant before a concert in a city away from home. During these grand adventures, the only worry was deciding which restaurant we wanted to try. It was safe to say that kids were not in the picture.
The moment our first daughter was born, my world completely flipped upside down in the most amazing way I could have ever dreamed of. Overcome with an immediate feeling of responsibility toward this tiny little creature who I had only just met, it was time to start thinking about all the grown-up things I needed to do to pave the way for her to have a successful life.
Really exciting (sarcasm font) stuff such as wills and estate planning, minivans and life insurance.
Now, I have an unfair advantage over many parents in this realm because I am a fully licensed insurance agent, and I have great partnerships with attorneys who helped me navigate the complicated legal documents and planning. That said, I still had to figure out which route made the most sense for my family, and two years later I had not one tiny little creature to worry about, but two when my second daughter was born.
Here is the interesting thing about life insurance: your life changes throughout the years and you are supposed to choose a life policy now without knowing what the future may look like. You are supposed to pick the best option among programs and solutions that may not be “as great” for you later in life depending on what happens.
If you are an adult who has some type of insurance, most likely you have had someone pitch you on life insurance before. In fact, it could have been me! But of all the things I would want to say to someone trying to educate them about a life insurance policy I would tell them that there are so many living benefits available with life insurance policies other than a tax-free check at the time of death.
Do I opt for a plan that will kick in with a living benefit if I need medical care due to a chronic illness? This question hits close to home for my wife and I since many loved ones from both sides of our family have endured long-term and expensive nursing home stays in the past. Term Life insurance is great, and it is the least expensive option as well, but I subscribe to an irrational optimism which gives me a false sense of confidence that I will not need to use it during the next 20 years and will have spent all that money with nothing to show for it.
Whole Life insurance sounded great, but at the time we were investing much of our hard-earned money into diapers and day care, so it did not seem to be the right fit at that moment in our lives.
In the end, when we had gone over the numbers and benefits with our agent, the option we chose was called Return of Premium life insurance. But as a father of two girls, I decided to call it the “Wedding Planner policy.”
My wife and I are moderately traditional, and please do not tell my daughters this but we plan to fully fund both of their weddings, should they choose to marry someday. To help realize this dream, my wife and I each secured a Return of Premium 20-year term policy. The way these policies work is that in the event one of us dies unexpectedly (despite my irrational optimism that I will live forever), the policy contains enough death benefit to pay off our mortgage, college for both girls and funeral expenses.
Assuming we do not perish prematurely before the 20-year term is complete, the policy will contain a cash value equal to the amount of money paid into the policy. I get all my money back that I put into the policy, which I will leverage to provide what I hope is the wedding of a lifetime for one daughter, all the while providing the same security and option for our other daughter via my wife’s policy that we set up for her.
That means that because I chose the Return of Premium policy, I would get all my money back and did not simply pay premiums for something I never really used.
Although I may or may not be an insurance nerd, I think anyone can recognize how smart and beneficial this policy option is. I am preparing for the unexpected and ensuring that my family will be taken care of if anything happens to me. But I am also choosing an option that will help me later in life if I am lucky enough to make it past that 20-year term.
The reality is that you cannot go wrong with doing something related to life insurance when compared to the prospect of doing nothing at all. We all love our families and want the best for them, so putting a plan in place is just another way of showing that we love them very much.
You may be wondering what if they do not get married? Well, in all honesty, I would be fine with that because then it means that my wife and I have the opportunity to go on many more trips, attend many more concerts and eat at all the fancy restaurants we can handle with the money we put into each policy.