Oliver and Mary were happily married for three years when Oliver Jr. was born. Their happiness grew. The following year Oliver Jr’s sister, Susan, was born and during the next 5 years the family built a comfortable life for themselves. Part of their building this comfortable life was financial planning; college funds for the kids, retirement saving, and life insurance which Oliver purchased online. They proudly and happily named Oliver Jr. and Susan beneficiaries and the future looked bright.
Then the economy turned and Oliver lost his job. Mary went to work but she didn’t earn nearly what Oliver did and things started going south. Slowly but surely, savings were depleted and college and retirement funds were liquidated. But Mary, determined to provide for her kids “in case something happened,” doggedly held onto the life insurance.
Oliver tried everything but he couldn’t find work. He tried starting a business but couldn’t get it off the ground. His ego badly bruised and his self esteem shattered, it wasn’t long before Oliver started to drink. The mortgage on their house soon fell months behind as did the payments on both automobiles. The worse things got financially, the more Oliver drank. In less than a year they lost their house to foreclosure and one of their cars was repossessed. The family was forced to move into a small apartment … and Oliver’s drinking got worse; then the abuse began. It was physical with Mary but “only” verbal with Oliver Jr and Susan. Mary blamed herself, she blamed the situation, she blamed the alcohol. She, like so many battered women, made all manner of excuses for what was happening to her and to their family. And Oliver sank deeper and deeper into depression … and violence. Then, one evening, something provoked a very drunken Oliver and he slapped his son so hard across the face that he shattered his eardrum. He was arrested after Mary told the E.R. doctor what had happened. Mary never went back, Oliver found the streets and drugs, and the family fell apart.
Three years later Mary, then, with Oliver Jr and Susan, living with her sister and brother-in-law, was killed in a tragic traffic accident. The life insurance, $50,000 worth, that she so doggedly held onto to provide for her children never got to them. Oliver, upon learning of his wife’s death, cleaned himself up, hired a storefront lawyer, and, as Oliver Jr and Susan’s biological father and still legally married to Mary, petitioned the court for access to the funds on behalf of and for the benefit of his children. Six months later Oliver was found dead of a drug overdose.
I tell you this story because young families with young children often name their children as beneficiaries of their life insurance and this may not be the wisest thing to do. When it comes to your financial health, no matter what you think or hear or read online – there are no secrets, there are no tricks, and there is no magic; there is only knowledge and understanding. Trusted financial professionals can provide both! NEVER make financial decisions without the help of a trusted financial professional.