Now that I have a lady to take care of, I’ve started thinking about things like life insurance. I want to make sure that if I kick it (from natural causes, like a pair of scissors into my back), that she won’t have to burden the world by having to go on social assistance or anything like that.
Also, she will never love again.
For most people, the easy way to do this is via life insurance. You go see an insurance agent, fill out an application form, get a quick medical test (maybe even one with a finger up your ass!), and you’re in business. You can buy terms that go for 10, 20, or 30 years pretty easily and cheaply, especially if you’re under 30. A 20-year term policy for $500,000 will cost the average 25-year old about $60 per month, give or take.
If you’ve just undertaken some big commitments like buying the average overpriced Canadian house or getting your wife pregnant (high five!), it’s pretty easy to make the argument to buy some insurance. After all, what kind of BIG FAT JERK leaves his wife with all sorts of liabilities if he kicks it unexpectedly?
So I get it. There is very much a need for insurance.
And yet, I don’t have a dime of it. I don’t have life insurance, disability insurance, or anything. Hell, I’ve barely insured my car. Should I be getting some now that I’m officially part of a twosome? I don’t think so. Here’s why.
Remember the point of insurance
The whole point of insurance is to provide for somebody who isn’t capable of providing for themselves.
For the most part, that involves one of two groups of people. Either it’s there to provide for children or a spouse. Sometimes the spouse doesn’t work, but most of the time it exists because the one spouse can’t continue to service debt or maintain a lifestyle on their own. So the life insurance makes the debt go away, which makes it easier to live large, yo. Kids are going to be leeches no matter what, at least until the Conservatives pass that child labor law they’re kicking around (I get my political facts on Facebook!).
But what about that time in a man’s life when he’s freshly married with no big liabilities?
That’s exactly where I’m at. We’re currently renting a place that is probably unaffordable for my lady on her own, but she could very easily hire people to help her move into a place that costs less. Other than that, we have no major liabilities each month. We don’t have a car payment or any other debt.
If she can pretty easily downsize to a smaller place, why would I buy life insurance?
The answer given by insurance agents is you should buy insurance anyway, on the off chance that you become uninsurable in the future. I’d love to see the stats on how often that happens, because I’ve yet to see them. Anyone? I am 100% serious; if you have the stats, I’d love to see them.
It’s silly to protect for something that we don’t know will ever be needed. Maybe my years of keeping my laptop square on my junk have made my sperm more useless than a teenager at work. Or maybe I’ll just repeatedly punch myself there after watching my friend trying to reason with his two-year old for the 93859th time. This is a very real possibility.
Newsflash: not taking care of kids is easy. And fun.
That’s where I’m at now. My estate easily has enough in cash and investments that my lady will have enough to bury me and hire friends to cry at my funeral. She can then take the rest of the money and throw it in index funds (or try to invest it actively), and it’ll be enough that it’ll grow to a few million by the time she’s ready to retire.
Insurance is a valuable part of financial planning. But it’s not for everyone. If you’re single, or just recently coupled up with very little in liabilities, it’s pretty easy to argue that buying life insurance doesn’t make much sense.