Originally published in Advisor Magazine
There’s a lesson I learned years ago that has shaped how I think about protection and planning.
In 2014, my wife and I bought two cars. As part of the purchase, we added lifetime warranties. At the time, it felt like a cautious decision. Hopefully we’d never need them, but if something went wrong down the road, we wanted protection in place. And to be honest, I’m not a car guy!
Over the last 12 years, those vehicles have spent some time in the shop. Some for small things, some larger. The repairs could have been expensive, but because we made the decision years earlier, much of the cost was covered.
That experience reminded me of something I tell business owners and families every chance I get: the best time to buy insurance is before you need it. Once the problem arrives, it’s often too late.
Life insurance works the same way.
While most people understand the basic concept of life insurance, far too many delay the conversation. They assume they have plenty of time—that it is something they can address next year, after the next promotion, once the kids are a little older, or when business slows down.
Unfortunately, life doesn’t always follow our schedule.
At its core, life insurance is about protecting the people who depend on you. For a young family with a mortgage, it can help ensure the surviving spouse can remain in the home and preserve important financial goals, such as paying for a child’s education.
Even in households where both spouses work, the loss of one income can create a significant financial burden. Expenses don’t disappear overnight—mortgage payments, childcare costs, and the costs of everyday life continue.
Life insurance helps provide a safety net, a financial bridge during one of life’s most difficult moments.
Of course, coverage needs change over time. Someone in their seventies with grown children and a paid-off home has very different life insurance needs than a growing family. The goal is to have the appropriate amount of protection for your stage of life.
That’s why working with a financial professional can be so important. Major life events such as buying a home, starting a business, welcoming children, or preparing for retirement can all change the amount and type and amount of coverage you need.
Many business owners spend years building something that supports not only their family, but also their employees, customers, and communities. Yet I frequently see owners who have spent significant time protecting their business from operational risks while overlooking one of the biggest risks of all: the loss of an owner.
What’s interesting is that business owners understand the importance of protection. According to the
This goes for key employees, too. What happens if the person responsible for generating revenue, managing key relationships, or making critical decisions suddenly isn’t there?
For many small and midsized businesses, an owner or key employee’s death can create immediate financial and operational challenges. I’ve seen it happen. Revenue may decline. Employees may become uncertain about the future and leave for a different opportunity. Family members may inherit a business they are not prepared to manage. Partners may struggle to continue operations without a clear succession plan.
This is where life insurance becomes a business continuity strategy in addition to a personal finance tool. Life insurance can help fund buy-sell agreements, support ongoing operations, protect surviving owners, and help execute a succession plan without forcing difficult or bad decisions under pressure.
Believe it or not, cost is not typically the biggest barrier to whether someone gets life insurance or not. More often, it’s procrastination.
Most people understand the importance of protection. The challenge is turning that understanding into action because life insurance generally becomes more expensive, and sometimes unavailable, with time.
The best protection plans are typically established before they’re needed. That’s true for a vehicle warranty. It’s true for a business continuity plan. And it’s certainly true for life insurance.
I’ve had countless conversations with business owners and families over the years, and I’ve never met anyone who regretted having life insurance when they needed it—or even the contentment knowing it’s there if ever needed. What I do encounter are people who wish they had started the conversation sooner.
Some of the most important financial decisions aren’t about predicting what will happen tomorrow. They’re about making sure the people and businesses you care about are protected if tomorrow doesn’t go as planned.
