What’s love got to do with it…got to do with it?
In 1984, Tina Turner produced the well know song, “What’s Love Got to Do With It?” The video of her walking the streets of New York, approaching people as she sings in her very 80s dated hairdo still runs in my head. Now, during the month of February we celebrate the holiday of Valentine’s Day; and we are reminded that Love is in the air with candy, flowers, and chocolate capturing their own version of inflation for a few weeks. As commercialism finds its way to defining the quantitative value of Love, let us look to something else that not only defines one’s love and caring, but illustrates it to long term value.
Let’s first describe, in short, what life insurance is. Life insurance is a prepayment of a contractually larger benefit at a future date. Ironically, to its name, this type of insurance generally pays out at the death of an individual. However, there is a lot more “meat” to this type of investment. Let’s cover some of those topics:
- Permanent or Term – basically, is there a short window for the need or is it life long
- Tax free death benefits – regardless of insurance type, the benefits pay without tax to your beneficiaries
- Can build cash value to be used for living benefits – depending on other long-term needs, life insurance cash value in a may potentially have the capability of producing a tax free defined benefit pension or simply produce tax free access to money at future times
- Can free up retirement money for retirement use – If you have secured your legacy payments with life insurance, then you are free to spend every dime before your death without compromising that emotional or financial gift
- Guarantees a legacy regardless of your net worth* – Leaving life insurance benefits is kind of a surprise. While you are alive, your inheritants may look at your physical world to what is for them when your gone. How about the one last surprise when they see you have spent it all but still left a small gift?
- Replacement of income for a spouse – We are all going to live forever, but if we don’t...we wouldn’t wish for our spouse to change their retirement trajectory after we are gone. This type of insurance can make sure that they can continue to live “financially” like you were still there.
This is a list that I could continue to 100+ reasons. The fact is Love comes in many forms, but the most common is the action of caring. Making sure those you care about are financially secure has to rank in the top 10. So, what does love got to do with it? Everything.
Now, I don’t want to insinuate that those that have enough life insurance care more or care less for their loved ones than those who should consider purchasing more. All I’m really saying is that when we raise our families, we take many things into consideration that demonstrate our love for each other. We run our kids to their events, we try our best to provide financially for their needs, and sometimes, we even enjoy spoiling them from time to time. All of these considerations are controllable and manageable to financial worth, time and availability, and personal interests. However, as we can plan for a long life of enjoying these things with our families in demonstration of “Love,” we also have to recognize that our future can be influenced but not controlled.
So, “what’s love got to do with it….got to do with it?” Will your loved ones have the finances available to continue the natural trajectory of their lives that would have happened if you were there for all of it….or will your uncontrollable passing change this dynamic? For the same reason that bald tires on a vehicle don’t guarantee a crash…too little of life insurance won’t guarantee a destructive financial life.
But it doesn’t mean that we don’t look for better alternatives. Let us know if you would find value in a Life Insurance Needs evaluation.
*Guarantees provided are based on the claims paying ability of the issuing company.