My father was a financial planner, which meant I was lucky enough to learn a number of important money lessons at an early age from an expert in the field. One particular lesson that stuck with me was Dad's view that term life insurance is for replacing lost income. I grew up believing those without dependents don't necessarily need to buy a significant life insurance policy because their income isn't supporting anyone.
This is why, as a young mother and wife, I only carried a minimal life insurance policy. My husband was the primary earner, and as a work-from-home mother who was slowly building a freelancing career, it seemed unnecessary for me to buy term life insurance beyond what was available through my husband's employer.
Then, my father passed away at the age of 62. Even though neither my sister nor I had depended on our father's income for almost two decades, we discovered he had maintained a substantial life insurance policy and had named us his co-beneficiaries. Suddenly, I understood Dad's view of term life insurance was far more thought out than I had realized.
More Than Just Income Replacement
My father was proud of his two daughters. He knew we were making our way in the world and didn't need money from a life insurance policy to provide for ourselves or his grandchildren. And yet he still bought and maintained a term life insurance policy to help provide us with a cushion of cash after his death. As I navigated that first year without him, I started to understand his thought process.
To begin with, I realized that income replacement doesn't just refer to the person who passes away. I was in a fog of grief after Dad passed away. While I tend to be the "throw yourself into your work" kind of griever, I spoke to friends who had also lost parents and who told me about being paralyzed by their grief, unable to work. Term life insurance can help provide loved ones with the ability to grieve without worrying about money if they're similarly paralyzed after a loss.
My father's life insurance policy also gave him a way to continue giving to his children and grandchildren, with whom he was head-over-heels smitten. Had we been blessed with more time with Dad, he would have certainly spent money on all of us — from buying birthday gifts and funding summer camp to helping with education costs. Though he would've definitely preferred to be around to see us enjoy his financial gifts, his life insurance policy helped ensure those financial gifts were there, even if he couldn't be.
Knowing just how devoted Dad was to his grandkids, I made sure to set aside part of the life insurance payout for their future. We'll make sure to acknowledge Grandpa's gift any time we use that money for my kids' education.
Giving My Family Room to Grieve
After Dad died, I suddenly understood there are no guarantees in life, and that even relatively young and healthy people can die. While losing the income brought in by a young parent or spouse is financially devastating, it's important to recognize the emotional devastation that follows a death in the family.
I am far more to my husband and kids than just the income I bring in, and though there's no amount of money that could ever replace me, the funds provided by term life insurance could help my family carry on should something happen to me.
There's no reason to add financial stress to their grief. A larger life insurance policy can help offer your family a way to handle the difficult financial logistics of life without you — without adding to their grief.
Increasing My Life Insurance Policy
Within a year of my father's passing, my husband and I both increased our term life insurance policies. We recognized life insurance would be a gift to our family to help insulate them from the financial fallout of grief.
Each month, when we pay the premiums on our policies, we see those monthly payments as a little gift to our family that we hope they'll never have to use. While I could certainly think of other things to do with that money, I'm glad to know we'll still be taking care of our kids should anything happen to either of us.
Dad's Gift Keeps on Giving
Being a parent means taking on the responsibility of helping your child learn, grow and thrive. Most people think of this responsibility as being there to cook meals, go over homework, pay for college and offer advice.
But something my father understood was that being a good parent doesn't end with death. Not only did Dad's life insurance policy provide me a financial gift, but it taught me another important lesson about parental responsibility. Because of his excellent example and generous gift, I'm a better parent to my children now and in the future.
Though I wish every day Dad was still with us, I couldn't have asked for a better teacher or role model. I just hope he knows I've taken his lessons to heart.