Tuesday, May 14, 2013

Do You Have Enough?

I'm not talking today about food or money....these are things where it's often asked if you have enough.

No, today's question is aimed at something as important as those two but for me, today, is hitting a lot closer to home.

You see, I have a friend.
This friend recently lost her husband of many years.
He was not sick.
For all intents and purposes he was a health man in his prime.
But just like that, he was cut down by something nobody saw coming.
And he died in an instant.

There was nothing anybody could do.
And just like that, my friend lost her lost her best friend and the main financial support of their family.

While my friend does work outside the home, she doesn't bring home the "big bucks" like her husband did.  There is no way she can make up that income that has been lost.
And she still has kids at home.
They now have to live on far less than before and things are going to be mighty tight for them going forward.

My friend thought they had enough life insurance on her husband.
He had insurance through his job and they thought that was sufficient, at least until they got out of debt.  They had planned to pick up hefty amounts of life insurance after they eliminated their debt in about 9 months.

But he died before they got a chance to buy more coverage.
And my friend found out after the fact that they didn't have enough insurance on her husband when, after some medical bills incurred and the funeral and burial expenses, there was nothing left to use to help support their family going forward.

Needless to say, my friend is distraught over her loss right now.

But she is also stressed beyond belief now, at a time where she shouldn't have to think about things like how is she going to pay her bills and stay in her home, and feed her kids and pay for college, etc.

My friend knows I have a blog and I talk about personal finance sometimes too.  So she asked me, no she implored me to write a post about protecting your life and your family by having enough life insurance on the main bread winner in your home.
Let me say that again......Protect your life and your family by having enough life insurance on the main bread winner in your home.

You can never have enough life insurance, she says.
And an emergency fund, she added.  I'm quoting her on what she said about this....

"Emergency funds.  They can never be large enough.  Ever.  Think you have enough?  You don't.  There is no such thing as enough.
Not having enough money in insurance and in the bank is humiliating.  Having to borrow money from your parents for food until you can go back to work is humbling.  Calling your debtors and asking if they can just freeze your debts for a few months until you are on your feet is horrible.  Have a bigger emergency fund and don't wait until you are out of debt to get life insurance."

I'll add that if you have a family or are married, make sure you have a will and it's up-to-date.  If all your money & accounts are tied up in probate because your loved one died without a will, it's hard to pay the mortgage or buy food with thin air.  It's bad enough to lose your spouse to not have to be left destitute because your assets where under protected.

I admire my friend for having the courage and the insight to want to forewarn people, even while she is going through one of the most painful times of her life.
The least I can do is grant her wish to try to help some one out there.

Don't let this happen to you.


Sluggy

12 comments:

  1. That is a very scary situation, and I'm very sorry about her loss. I think about life insurance a bit more than I should, as a single, no dependents person. It is a great advice to include medical costs, especially those in emergency situations (add on any coinsurance and deductible costs) and funerary costs, whatever those may be. Good luck and lots of strength to your friend and her family.

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  2. We waited far too long to buy Term Life Ins. but now have $500,000 on both of us, or $250,000 per. We also have an EF, but i'm slowly building that up as we go as well... so sorry to hear about your friend. She is in my prayers.

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  3. I'm so sorry for your friend's loss!! I totally agree - there is no such thing as too much life insurance. Ever. And something like term life is usually pretty cheap to pick up.

    Another biggie that a financial planner talked about in an investing-for-retirement class I took recently was/is disability insurance, especially for the breadwinner of the household.

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  4. I'm so sorry for your friend!! How tragic! I'm praying for her.

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  5. I worry about this a lot and am sorry your friend is going through this. One thing we didn't stop when I lost my job was life insurance. We have two different policies. While what I have on myself is higher than hubby (because it was through my employer) so he'll be in better shape if I go unexpectedly, if he goes first, it will be tough for me -- but I could get by for a year or so. That's why I dislike being out of work and why I work so hard to keep him safe and healthy!

    I wish we could have COBRA'd disability insurance from him but there was not a good way to work that and we can't afford to add that on to our current array of policies.

    This is an essential lesson!

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  6. That story is so sad. I feel for her. Hopefully, she can come out of the situation without too many more losses.

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  7. 3 years ago my husband and I took on a bunch of debt for family reasons. We could not afford enough insurance at our age to pay off the debt, but we did buy as much as we could afford, even though it was a stretch. Last year, my husband died of Lung Cancer. Without that life insurance, I would be in a hole I could never get out of. When you have debt it when you must prioritize insurance.

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  8. I am so sorry for your friend. Please give her a hug for me.
    And I always feel as if there just isn't enough money to go around. We have planned for everything that we could think of but still I worry. But I think that you know this.

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  9. I'm so sorry for your friend's loss. We both have life insurance, but are just now understanding how risky that is, when it's tied to your employer. I can convert my employer policy, but given the lupus, my rate will be sky high. Had I pulled the trigger on this last year (as I'd planned), we could have saved a ton of money.

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  10. Yes, I have enough to be in place for my family if something were to happen to ME. But does my dh have enough - no. The very unfortunate situation that your friend is in has really given me something to think about, and talk about to the dh.
    I have a large life insurance policy through my employer but the dh only has 1 year of salary to me if something were to happen. Not enough!
    We have had wills, power of attorney and advanced care directives in place forever.
    Thankfully we have a very large emergency fund and are building retirement savings. But boy, it can all change in the blink of an eye can't it!

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  11. Excellent post! We both have a lot of life insurance because you never know what will happen.

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  12. I am so sorry for your friend.

    The answer is, right now we do have enough....for us.

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