It is more than just a shame

Posted: Jan 10, 2007 8:57 AM

Last week, one of my wife's employees lost her cousin to a heart attack at 41 years of age.

He left a wife and three children--the youngest just an infant. She told me she thought he was in good shape. He wasn't overweight, but he did drink, and like everyone else in the family, he smoked. I am certainly not here to judge the man on his preferences even though I don't smoke and haven't ever and just drink red wine. His lifestyle was none of my business and actually none of anybody's business. The problem was he was just getting around to look into life insurance. He had an appointment the week after he died. Too late! He left a family destitute that could have been in decent shape. If he had traded the cigarettes for life insurance, he might be alive. With a policy in place, his family would have had a chance at a decent life, financially speaking.

Insurance is the best bet in the worId. When you are young and raising a family you need to protect them if you are the bread winner just in case you go prematurely. No one should be that selfish or unprepared, and if they are, they really shouldn't have a family. Life insurance is a must, and it doesn't matter if you can't afford much. $100,000 would have been a life saver for the aforementioned family, and it would have cost pennies a day. You really need at least 3 years of income as a safe amount for your family, but any amount is better than none. One of the biggest problems in any type of planning is the lack of proper insurance.

The three most important insurance coverages for an individual are life, health and disability.

After those comes long term care which I took out in my 50's and hope I never have to use. I have heard so many people say that they don't won't to be a burden on their family when they grow old. Well, if you are one of those people, here is the way to "put your money where your mouth is".

If you own a house or car, you need homeowners insurance and/ or automobile insurance.

Everyone who can should purchase a liability umbrella to give them greater liability limits than you will have on your home and auto policies. A friend of mine decided to help his neighbor patch his roof, and unfortunately, he fell off the two stories onto the cement and lived. He actually will recover to probably 90% of his former health and has a good chance to live a normal, productive life. His hospital bills, not the doctors, are over $300,000 and rising, and he will be off of work for over a year. There is a world of worry accompanying the accident by all the parties concerned. They estimate the final bill will be over $1 million.

I am not in the insurance business, but I do believe if you wish to have a sound financial plan, you need the aforementioned insurance policies. I have seen time and again what happens to people if they don't. You don't want to go in that direction even if it means cutting some things you really hate to cut out of your budget. Strange things can happen to anyone, and I don't advise thinking you are exempt. Even if it turns out you were exempt, I am sure you will have slept sounder and smiled more knowing you were covered just in case the roof had fallen in.

Start the new year right and contact your insurance agent or broker and get a check up on your policies. I avoided my insurance agent on my life policies for over a year, and finally, I called. I have reached the age where term insurance makes no sense and protecting my family is a thing of the past: they have all grown up and are working on their own financial plan. I made the necessary adjustments and am now spending my money in a much more efficient way. You need to do it!

When it comes to insurance, Lloyd's of London generally pops to the mind of the sophisticated business person. They basically will insure anything for a premium that either will or will not make sense to you. I do believe they insure a lot of athletes who are worried about prematurely ending their careers. It would appear to be a losing proposition for them, but before you start worrying about insurance companies, look around.

Insurance companies are among the wealthiest companies in the Country and quite possibly the entire world. They understand how to price their product because they have a myriad of actuaries who predict the percentage of loss they will suffer, generally, in every instance. It's interesting to know because you do not wish to be insured by a company that might not be around to pay off when your claim is presented to them. I bring this up because some consumers believe they don't need insurance and the wealth of the insurance companies proves that it is a fool's bet.

Every week I receive hundreds of emails from people who aren't any different than you and me. Some are in terrific financial shape and want a quick check to see if they could do anything better, but most are hurting for many reasons. They might have lost a job, a family member, a house or other asset do to poor planning or just bad luck. Not everything could have been saved by insurance in close to half of the situations. Having more than one of those situations in my book is too many. If you believe you make your own destiny, then please don't gamble with your own hard work. Insure it!