Summary
- Your health is the most important life asset
- All other assets (financial, capital, others) are an extension of your health
- Protect your life with term insurance
- Understanding where you in your life stage can help you determine what insurance to get
Related Topics
You want healthy problems
A year and a half ago, I had a chat with my aunt who shared with me that she and my uncle were worried about how to split their wealth among their three kids. They were getting consumed by the fact that when they had given some money to one of their children or my cousins, the others were like, “how come I didn’t get that?” Note though that my cousins are all really good individuals, and they are all accomplished and successful in life.
I told my aunt that at least their problem is not debilitating. It is a good problem to have. They have money to split among their three kids whereas there are others who don’t even have money in the first place to share with their kids!
More importantly, this issue is not life-threatening.
Health issues are unhealthy problems
I brought this story up is that just a couple of months ago, in April 2017, I was admitted to the emergency room. I had this debilitating headache. I was nauseated and was throwing up. The headache started five days earlier and had continually gotten worse. I was brought to the ER, and the medical staff performed a CAT scan. The results showed that I have a formation in my brain, but they were not sure if it was life-threatening. So, they decided to perform more tests and that entailed me needing to stay at the hospital indefinitely.
The first step I did was to notify my wife. I had to let her know, so she knew what to do if the formation the doctors saw was lethal. I reminded her of all our banking, brokerage, insurance, and other financial related website passwords, so she could access them if anything happened to me. In my mind, I felt that at least having that financial cushion can somehow alleviate other worries she could potentially face: being a widow and raising our 3 children.
Long story short, and after getting a second and a third opinion, I don’t have any life-threatening health issues, but this experience made me realize the important of taking care of your health.
Life is Too Valuable. It is Irreplaceable.
No amount of money can ever equal the value of one’s life or health. The things or principles I teach my kids, the cherished moments I share with my wife, and the lasting friendship I build with friends are all priceless. These things can’t be measured in gold. The value of our lives is especially amplified when we do good things in life. I know I am not Mahatma Gandhi or Abe Lincoln, but I do know that the things I teach my children will have lasting and cascading effects on them and their children and the generations after them.
Taking Care of Our Health is Paramount
I try to, the best I can, to eat healthy. I don’t eat a lot of sugary stuff. I try to walk on a treadmill for 3 miles every other day, and I play racquetball twice a week. I neither drink nor smoke either. I am also not obese. But I do know, that life, at times, can be uncertain.
We have a friend who a few years ago unexpectedly died of meningitis. She was in her early thirties and she was in perfect condition. She was very healthy. She ran marathons. She had a very healthy marriage.
Having mentioned this, we can never be 100% foolproof from anything that may impact us negatively and severely. However, we can be prepared when times like these happen to us. I have mentioned in my other blogs of the need for savings, investments, passive income, and others. But I don’t think I have talked about life insurance policies.
Best Insurance Policy
There are two types of insurance policies one should consider. One is term life insurance and the other is a full life insurance. My policy is a term insurance which is good for a term (10 years). The reasons why I like this are the following:
- The policy cost is cheaper than that of a full life insurance policy
- You can renew it after the term expires
- It also has a $1mm value
- I pay about $400 per year. I think it is the best deal!
To dig deeper, the reason why I chose to get it at the age range of 35 to 45 is because that is the age I feel like I would be most prone to stress. I am also most active at this age range; and therefore more prone to casualty.
Based on research – you can also access CDC’s mortality rates table – you will see that from the age bracket of 25-35 to 35-45, the mortality rate more than doubles. After this range (45 to 55) it doubles again, but I figured I will have accomplished my financial goals then, and any setbacks can be offset by my financial base.
Full life insurance is more expensive and you are committed to paying premiums for the rest of your life. I do not prefer this. I prefer to use my spare cash on investments.
Here’s a very good description of life insurance. Again, choosing one or the other is dependent upon one’s circumstances and preferences.
If you are employed, your employer will also have an insurance policy covering its employees. They can also be very cheap as it is a group rate. I highly suggest that you avail yourself of these policies so that you are protected. Having a life insurance or money saved for life-threatening events won’t replace you as a person, but it is something that can at least cover financial burdens in these situations.
Action items
- Ask your employer about Group Insurance Coverage
- Contact an insurance company to get a quote (State Farm, AIG, others)
- Assess what kind of insurance you need after you analyzed your health and financial positions
I would be interested in hearing your thoughts about insurance and taking care of your health in general. I would appreciate any comments or feedback.