You Never Know... Buy Insurance!
By Al Silber (ASilber@fool.com)
November 29, 2000
Imagine, if you will, happily walking down the street, enjoying the luxury of a lazy, leaf-blown fall afternoon. Then imagine the icy cold hand of death upon you! Wouldn't it be great if, instead of the dismay that a piano has just fallen on you, a satisfied smile creeps across your face. A smile because, by passing on to the great hereafter, you have given a windfall to your loved ones!
Now imagine coming home one day to your trailer park, only to find a large hole where the trailer used to be, the results of a twister that inevitably set itself down among the pre-fabricated dwellings you call home. But wait! Then, a friendly man in a blue blazer hands you a check to buy a new trailer. In fact, you may take this opportunity to move up to the double-wide. Not possible, you say? Oh, but it is! Through the beauty and magic of INSURANCE!
I love insurance! There are plenty of Fools here who will rightfully extol the virtues of long-term, careful investing. However, nothing makes me sleep at night like having lots and lots of insurance: for the car, the house, and yes, just in case the great Jester in the sky one day deems it reasonable for me to eat lethally poisonous sushi, or be the victim of a bizarre and fatal backgammon accident, life insurance. In fact, I think life insurance is the best of all!
I realized this recently when I saw an old friend I had not seen for 10 years. We did the usual catch-up on careers and family. I was floored to hear that he did not have any life insurance -- none at all! He is a doctor with almost no savings (a problem in and of itself) and his wife takes care of their three adorable children. Who is supposed to take care of the little rug rats should dad get bitten by a Fer-de-lance, which is described as the "most feared and venomous snake in the entire Central American region"?
Of course, my friend lives in Arizona, not Central America. Nonetheless, the boy needs insurance! And it's really, really cheap! In fact, right here at the Fool you can get lots of information about buying insurance in our new insurance center. You can even find out just how much insurance you should buy. There are plenty of serviceable formulas to figure in how many kids you have, your household income, and the like.
I prefer my own formula, which I call the sleep-at-night-but-spouse-does-not-bump-you-off ratio. Simply figure out an amount that is enough to take care of your loved ones without you, BUT is not so much that your spouse starts looking at you funny. If your husband or wife starts cleaning the top floor of the staircase with Wesson oil, well, you have probably bought too much!
I think I did pretty well, and it is only costing me $300 a year. In fact, through the Fool you can get some very competitive rates on insurance just by providing some basic information like your age, weight, and whether you are killing yourself with cigarettes. Hey, I used to be a smoker, but the one in three odds of the Marlboro Lights' killing me eventually got through the haze of smoke and made it to my brain.
Anyway, if you have people who rely on you, and you don't have life insurance, buy some. You'll sleep better. If it helps, think of it as this amazing lottery where your chances of winning are actually better than the state game!
As for me, I gotta go. I think I saw my wife fiddling with the brake line on my Mazda.
Oh, one more thing. Your basic homeowner's insurance policy almost never covers flood damage. If you live in a flood area, buy separate flood insurance. Just one more fun fact!