Why You Need Life Insurance

by Joe on May 27, 2010

 There is a general trend and a classic argument of avoiding life insurance especially among Christians. Some have the idea that it (life insurance) weakens your faith in God because once you sign up for life insurance you risk putting your security on the insurance rather than on God.  Other people ask: “If I die, why do i need money for?”

These are valid arguments, but we need to understand that faith and trust in God stems up from a changed heart that has been transformed to solely rely on God’s provision. Therefore, with or without insurance… such a heart will remain steadfast. On the other argument, once you die… you are gone; and any money/wealth that you had is worthless to you. However, if you are survived by family or other causes and or business that you support, they will need to continue thriving even though you are dead. 

We can learn that from Job in the Bible (Job 1:1-4) he was the Greatest man  among all the people of the east in wealth, influence and character; yet he wholeheartedly trusted  in God even when all he had was taken away from him including his children and his own health through calamities, sickness  & death.

On the other hand, there people whose motivation to get life insurance is greed, and desire to get rich. These kinds of people can do anything possible to claim the money they think they deserve – but such is the nature of the society that we live in.

Should Christians Carry a Life Insurance?

Absolutely yes would be my answer. If this is a new concept to you, seek for advice from a trusted financial counselor.  You also need to complete a financial need analysis to determine what your financial needs might be should something happen to you. This is especially critical if you consider having or already have a family.

 To begin, understand that there are two basic types of life insurance – term life policies and whole life policies. It is important to know the difference between the two when looking to purchase a life insurance policy.

Term insurance policies are for life coverage only. In the event of death of the insured, term insurance will pay the face amount of the policy to the named beneficiary. Term life insurance can be bought for periods of one year to thirty years.  Having been through Financial Peace University, I have a deep appreciation of term life insurance.

Whole Life policy offers death benefits and a savings account /cash value; so that if you live, you get back at least some of the money back. You can get this money back either by cashing in the policy or by borrowing against it.

 How Much Term Life Coverage Do You Need?

There is no simple answer to how much coverage is enough – every individual is in a unique circumstance and the ‘financial need analysis’ should give you an idea of how much life insurance you require.

Some financial planners say you need enough insurance to replace five to eight years of your annual income. If you have young children or significant debt, you should bump up your coverage so you have enough to replace as much as 10 years of your salary, they say. That would mean a person making $30,000 a year should have anywhere from $150,000 to $250,000 worth of coverage or more.

Remember, the sole purpose of life insurance is to replace your income in case you die, so that your dependents can maintain their current lifestyle. It should not be viewed as an investment. In fact, if you live in the United states and are below fifty.. Chances are if you take a term life of 25 years it will expire before you die because life expectancy is high.

What are your thoughts about life insurance?

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{ 7 comments… read them below or add one }

Deacon Bradley May 27, 2010 at 12:38 pm

Interesting post Joseph. I would argue that Christians have the greatest conviction to have life insurance (unless you can self-insure). 1 Tim 5:8 says “If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.” We are clearly called to provide and care for our families and this means preparing for the worst too.

(ps, is the last line supposed to ask what we think about LIFE insurance?)

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Joe May 27, 2010 at 2:37 pm

Joe May 27, 2010 at 2:36 pm
Deacon! That scripture really put things in perspective, and also raises the issue of being good stewards. Good stewards know how to prepare – to take care of what has been entrusted to them.
Thanks! and YES! the last line is now life insurance and not health insurance as before.

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Jason @ One Money Design May 27, 2010 at 8:21 pm

Joe, enjoyed this post and agree with Deacon. I think having life insurance is definately the responsiblity of a good steward. Added this to my roundup for tomrrow.

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Joe May 27, 2010 at 10:43 pm

Thanks Jason am glad you enjoyed the post, and thanks in advance for the roundup!

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