Life Insurance? Nah, They Can Suffer.

Dot:  I’m sure you have the life insurance squared away?
Ed:  Have we done that honey?  We gotta do that honey!
Dot:  You’ve got to do that H.I.!  Ed’s got her hands full with this little angel.
H.I.:  Yes, ma’am.
Dot:  What would Ed and little angel do if a truck came along and splattered your brains all over the interstate?

-Raising Arizona

Is it just me, or was it Transformers® who started the trans debate with whole “robots identifying as trucks” thing?

A long time ago, Scott Adams, the creator of Dilbert®, came up with a handy, short guide to finances.  His quip was, “I’d write a book of financial advice, but it would only be one page long.”  I wrote about it before, but that was two years ago and this will be funnier.  The nice thing is that his list of financial advice is simple, and applicable to most people in normal times (from, say 1950 to 2020):

1. Make a will.
2. Pay off your credit cards.
3. Get term life insurance if you have a family to support. 
4. Fund your 401k to the maximum.
5. Fund your IRA to the maximum.
6. Buy a house if you want to live in a house and can afford it.
7. Put six months’ worth of expenses in a money-market account.
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement.
9. If any of this confuses you, or you have something special going on (retirement, college planning, or tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio.

I don’t carry life insurance – I want to die just as I was born – as a burden to my family.

I think, for various structural reasons, normal times won’t continue, but I’ve blogged about that more than once.  We’re seeing inflation accelerate (10 Years (or less) To A $10 Big Mac – How To Explain Inflation To Your Friends) and we are, perhaps, getting ready to party like its 1859 again.  So, yeah.  It all might be going to hell, but it could also be much better than my worst projections, and some of the above might matter.  Yeah, I know, this is like having a mortician say, “But on the bright side….”

My insurance company is dependable – every month since I’ve had my policy they’ve sent me a bill.

So far, I’ve accomplished most of the things on the list above by Mr. Adams.  When I’ve varied from the suggestions, I’ve actually suffered financially – Scott is a pretty shrewd fellow, and he’s certainly more successful financially than most people.  For instance, if I had kept more money in the market, I would be that much more heartbroken when Netflix™ costs $12.  Not $12 a month, but $12 for the whole company.

Being wrong in my case is okay – I’m in pretty good shape financially – I was able recently to add meat to the Hamburger Helper® (I’m not saying it was hamburger, and what neighborhood will miss a cat or two?), so not being 70% in the stock market has been okay.  I’m able to sleep better at night and not worry.

Sadly, Hamburger Helper™ only works if the hamburger wants help.

But one thing on Mr. Adams’ list above that isn’t on mine anymore:  life insurance.  Sure, I take the company life insurance policy because it’s cheap super cheap, and if I were to pass away, The Mrs. would get the princess-ly sum of $500,000, which in the year 2029 will buy you a pack of illegal vaping juice.  I hope (on any given day) that I’m worth more alive than dead to her.

Besides, if anything suspicious happened to me, she’s an author and her Internet browser history looks a list of creepy websites the Zodiac Killer was too scared to go to.  The Mrs. could be 100% innocent, but it would still be difficult to explain why she’d spent several weeks researching “undetectable poisons to kill your bald husband with.”  Wait.  That’s just a bit too specific.

Mental note:  eat only what The Mrs. eats.  Also:  wear a helmet.

The purpose of life insurance is simple – it’s not a lottery – it’s a mechanism so that if the breadwinner was to die early, the family could be financially secure without the income they provided.  But what financial security does my family need to provide for?  The Boy is off at college, and with his scholarships I think he pays tuition, room and board in pocket lint and beef jerky wrappers because it doesn’t cost very much to go to Bob’s State University and Discount Amateur Asbestos Mine if you do really well on the ACT®.

Pugsley will in a few short years be off at college, too, and that’s it.  Our last financial challenge.  We’re in good shape for that today.  Also, if I were to die, the major source of weird family expense goes away.  The Mrs. is unlikely to spend nearly as much as I do on hobbies like ham radio.  I know that no one was more shocked than I was to find out that you couldn’t use a store bought ham.  I think you have to get a fancy farm raised ham.

If a pig eats ham, that must make a really good radio?

So if I passed on, then what?  The Mrs. would have to get by on our nest egg, which should work great as long as she doesn’t’ have any fancy needs, like electricity.  My need for life insurance now is nearly zero.

But it wasn’t always so.

When I was younger, I actually bought the greatest amount of life insurance the company offered.  The nice thing about life insurance is that it’s one product that’s priced appropriately – when you’re youngest, it’s cheapest.  And when you’re older, it costs more.  When I was young, I wanted to make sure that the family had its needs taken care of.  I don’t recall it ever costing much more than $30 a month, and that was for $2 million or more.

That was good.  When The Boy was first born, we didn’t have much as far as savings and we had almost two decades to plan for.  And we had no idea if he would get scholarship after being dropped on his head all of those times.  Now?  We can afford to go bowling whenever we want.  And we can get some of that fancy box wine when company comes over.  And our risks as a family have dropped significantly.

Think of box wine as juice boxes for adults.

Frankly, I never needed life insurance at all.  It was a product I was paying for that did me absolutely no good.  I would never see a dime of return.  Silly people I live with, wanting to be protected.

But in 2019, what would I add to Scott Adams’ list?

10. Live in a safe place. Think about population density when you determine safety.  Be there and be part of the community.  If the place is too big to recognize people in the stores regularly?  It’s probably too big.  Be there sooner rather than later.
11. Have food. Start with a month’s worth – nobody thinks you are crazy for having a month’s worth of food.  More is better.  Farming areas are nice – people are generally friendly, and they make the food.
12. Be able to get water. Clean water is good, but there are ways to make water clean.
13. Know what you can’t live without. If it’s PEZ® or insulin or fabric softener, know and either save it up, or learn how to do without.  I regularly shame The Mrs. pancreas to try to get it to produce insulin.  No luck so far.
14. It teaches you what you need and don’t need faster than anything.
15. What would you add?
16. Did I mention PEZ™?