By David Higle
Stewardship includes taking healthy care of ourselves so we can be there for others. It also involves thinking ahead to care for those we love in the event of a tragedy. Some believe that purchasing life insurance indicates a lack of faith in God’s provision. Yet the writer of Proverbs 27:12 tells us, “The prudent see danger and take refuge, but the simple keep going and pay the penalty.” Christians are subject to the contingencies of life like everyone else. Taking action to provide for both our family and ourselves is an act of love, not a lack of faith. Consider these five ideas about insurance from C. Peter Benson and Jon Maxson:
Personal Insurance Needs
- Evaluate your insurance needs. You might feel like doing anything else but evaluating your insurance needs, but it is a wise move to do so. Personal uses of insurance are many: replacing lost income, settling debt, providing funeral expenses, education, charitable gifts, and more. When was the last time you evaluated your insurance needs? How can you benefit others through the advantageous use of insurance?
- Know the difference between “term” and “permanent” (or whole life). Term insurance usually costs less, but covers you only for a specified period of time. Permanent insurance can cover your whole life and is also used for generating cash. There are options that can take advantage of tax laws for your benefit. You might need only term insurance, desiring to invest your money in other ways, but both kinds of insurance have their strengths and limitations. Do you have a life insurance policy? If so, do you know if it is the best type for your needs?
- Consider long-term care insurance. It is no secret that the cost of assisted living and nursing home facilities is extraordinary. Long-term care insurance helps address these needs. There are at least three factors to consider in long-term coverage: your assets (how much coverage do you need?); your current health (it is best to seek coverage while you are healthy); your age (the younger you are the less costly the premiums). Consider these three factors for other types of life insurances as well.
- Be aware not all policies are the same. Be sure to do your homework carefully before deciding on any insurance policy. There are many similar sounding names of policies, as well as hundreds of companies. Check the ratings on companies. Ratings are provided by A.M. Best, Moody’s, Standard and Poors, Fitch as well as others (some charge for this information – see below for an online option). Have you done your homework carefully before purchasing?
- Select a reputable agent and company. Because the insurance industry and policies are so complicated, it is wise to talk to a reputable representative who knows the industry well. But also make sure they have your best interests at heart. Unless you are unusually well-informed, it is wise to consult a professional. Perhaps a good place to start is to ask someone you know and trust well who they use. Who do you know who could steer you to someone reputable?
This and other resources on personal finance and insurance are listed here along with links for more information:
C. Pete Benson & Jon S. Maxson, Money Enough for Life? A Financial Roadmap for All Ages: Money Enough for Life?
Consumer Affairs offers comparisons of life insurance companies: Consumer Affairs
Article on when to purchase life insurance: U.S. News
Curator of content: Dave Higle