Michael and Marina had been high school sweethearts and had remained sweethearts all through college in spite of the fact that they were in schools that were separated by hundreds of miles. Wanting to be married but both being pretty level-headed young people, they decided to wait until they were somewhat settled in their careers before making any major moves. College graduation came as did their first jobs and not long after, marriage. When I met them they had been married for almost 2 years and were expecting their first child. Planning their financial future was fast becoming a concern so, on the suggestion of Marina’s parents, they called me.
I met with them in their apartment on the west side of Manhattan. It was small but cozy and tastefully decorated. We sat at the kitchen table and, frequently glancing at each other as they spoke, they told me their story. More importantly, however, they told me their plans for their future and the future of their slowly growing family. We talked about life insurance and retirement planning. We talked about an emergency fund and their wanting to purchase a home of their own. They asked about annuities and mutual funds and stock market investing. They asked about real estate and leasing versus buying an automobile. We spent the entire morning talking about their goals and putting things in place for them to accomplish them. They, almost as an afterthought, Marina asked, “what about insurance for our baby?” This was a completely unexpected question because, generally, people don’t want to talk about children dying. And, although I’d only been in the personal finance business for a relatively short time, I learned not to bring it up. (That’s a topic for another time). But when Marina asked and Michael nodded, I was as delighted to talk about it as I was impressed at their openness to early and sound financial planning … and I told them so. But regarding Marina’s question, this is what I told them;” as soon as possible after the birth of your child you should insure him or her. There are two reasons for doing so. Firstly, it’s very inexpensive to do so and secondly, as this is the biggee, it guarantees your child’s future insurability. That got me a couple of puzzled looks.
“Let me explain,” I continued. “All kinds of things happen to us as we’re growing up. There are all kinds of childhood diseases and accidents and who knows what all else. And, unfortunately, any of these things can leave a child uninsurable. Getting insurance when they’re very young and very healthy, and purchasing a rider that allows for periodic increases in the amount of coverage without having to prove insurability guarantees that they will never be without life insurance. And, unless there is no need for life insurance (another topic for a future article) no one should be without life insurance.”
Then I added, “And when you receive all of your documents be sure to put them in a safe place where you both know where they are. Nothing is more heart-wrenching or frustrating than searching for a lost or missing life insurance policy when, God forbid, it becomes necessary. (This, too, is a topic for the future).