Expect the Unexpected in Life: An Insurance Blog

Hey guys,

Sorry about the late post, it totally slipped my mind yesterday.

But I'm sure I've taught you well enough by now to expect the unexpected :P (thanks Pam!)

I'm going to write a little today about why as young people we have a better opportunity to get insured.

Sure you may not have as many responsibilities as a 40 year old but it is also harder to get insured and it will cost you more in the long run if you wait until 40.

One of the biggest paradoxes with life, disability, and critical illness insurance is people don't realize its important to them until it's too late. Either they become sick/unhealthy before they apply and can't get coverage. Or they die and leave their family in a mess.

There are lots and lots of people out there who have run into these problems. What they always say to themselves is "why didn't I get the insurance when I was younger and I knew I was healthy? Then I wouldn't be in this mess!" When they were younger they said "I don't need to spend money on that, I'll be fine"

Ask your parents, I'll bet they know someone who has suffered a disability and didn't have insurance to cover their time off of work. Or maybe they know someone who has tried to get life insurance but was declined. Then ask them "If I have the opportunity to get this insurance now while I'm healthy, should I do it?" I bet they'll say yes, and they will also tell you it will cost you much less than what they are currently paying per month.

Now I'm not saying you should get the full amount of life insurance you'll need in your life right now. Just get a small amount that you can afford. That way you are guaranteeing that you have some. With most life insurance and disability insurance plans you have the option to increase the amount of insurance when you need it, without having to go through underwriting. This means that if you do somehow become uninsurable. You'd still be better off than if you tried to apply after you were uninsurable.

"Oh but I have insurance through work!"
When you leave your employer you lose your insurance, what if something happens to you during the 3 month probation period at your new job? Group insurance is not guaranteed, and usually isn't even enough to cover the average person.

How much does insurance cost anyway?

It depends how old you are and if you are a smoker or now.

I'm 24 and for a $100,000 life insurance policy on myself it wouldn't cost more than $15/month? For someone our age $100,000 is a lot! Does $15 a month seem that bad to ensure that you at least have some insurance in place for the future. That's less than you'd spend at the bar in one Friday night.

Disability insurance will cost a little bit more but it is also more relevant to you right now. What would you do if you became disabled tomorrow? Where would you get money? What would happen to your life? The honest truth is disabilities can and have happened. Can you think of anyone you know who is disabled and unable to work? 1 in 3 people will suffer a disability lasting longer than 3 months.

Think about it guys, you really should be guaranteeing your insurability before it's too late! Remember what I said last week about priorities vs. desires? This is exactly what I mean. The biggest promise I can make to you is I'm not trying to screw you over or to just make a sale. Since you're all my friends and I care about you, If something did happen to you, you would never regret having sat down with me to talk about this stuff. And I would never regret giving it to you. I would regret if we sat down and you didn't see the benefit, then something happened to you...I would see that as my fault, because I could have helped you and didn't.

Alright well I hope you all have a great one....and seriously talk to your parents about this, they will be able to give you some good insight.

Mike

Hey everyone! I'm going to switch gears on ya from managing your money to protecting your family and your income with insurance. The common misconception about insurance is that insurance companies will try to screw you while taking your money and laughing all the way to the bank. This isn't the case, it really is about giving you the opportunity to plan for anything unexpected that could happen in your life.

What does it mean too expect the unexpected anyway? Well there are already things you do on a day to day basis where you know to expect the unexpected.

Defensive driving - you took driver training to reduce your insurance premiums on your car. The reason they can reduce the cost of your premium is you enhanved your ability to expect that something unexpected can happen to you on the road. You have better tools to deal with uncertainty and the lack of control you have over other peoples driving. You are expecting the unexpected.

Sports - you have safety equipment like a helmet, mouthguard, pads etc. These all ensure that if something were to happen to you that you didn't expect, it minimizes your risk to injury. By wearing protective equipment you are expecting that the unexpected could happen to you.

Sun block - its your insurance against skin cancer isn't it? You wear it so you don't get a burn too, but the main reason is fear of cancer. You are expecting that it really could happen to you, so why not prevent it from happening?

So why when it comes to death or disability to people fail to expect them to happen? It's a well known fact that 100% of people die and 1 in 3 will also suffer from a disability of longer than 3 months.

Does your family or partner depend on your income? If you suddenly die what would they do? Your debt doesn't magically disappear. They have to deal with it. On top of that they'd have a significant drop in the amount of income available to live on. Is that how you'd like to leave the people you love most in the world. For their sake you have to expect the.expected.

Now what about you? Do you depend on your income? I do! It's unfortunate to say but most things in life cost money. If you got in a car accident and were stuck in a hospital bed for 3 to 6 months would you really want to have to worry about how the bills are going to get paid? If you expect that the unexpected can happen to you and it does then you'll be very grateful that you planned ahead.

What happens if nothing happens to you, well even better! You get to live life with no regrets and you get the satisfaction of knowing that the money you've paid for insurance went to someone who was less fortunate than you!

Insurance really isn't bad or evil and in my mind is completely necessary when planning your finances.

Thanks again for reading guys!

Mike

Ok so you've just bought a nice new house. Your mortgage broker asks you "would you like the insurance with this mortgage? it will pay the cost of the mortgage if you or your spouse were to die." Thinking about this, you come to the conclusion that your mortgage lasts 25 years and who knows what could happen in that time. You give the mortgage broker the ok and he says "ok well I just need you to answer a few quick questions." He asks you five or six questions about your medical condition and history, you sign, he signs and off it goes. Do you even know what you just added to your mortgage?

The insurance added to the mortgage is essentially a life insurance policy with critical illness insurance added on as a rider. They charge you a monthly premium which is added to your mortgage payment. You don't even really know it's there.

The difference between the mortgage broker's insurance and life insurance is that life insurance is guaranteed. Mortgage companies do their underwriting when something happens, so if someone dies they find out if he was eligible for the insurance. If not they can decline it. Does that sound fair? What were those people paying money for? The kicker is they could have had life insurance for a similar monthly amount.

Life insurance is guaranteed. After you've got it, when you die, they can't decline you.

Here's a great look into what I mean.

http://www.cbc.ca/marketplace/in_denial/