Sometimes, in the midst of nursing Baby3 or holding Gamera or staring at Cookie Monster, an insidious sliver of fear sneaks in and attempts mightily to dampen and ruin the joy of having my children. Sometimes, it is a nameless, general fear of suffering such as thoughts of my kids getting cancer, or getting hit by a car, or abused, etc. Other times, it’s a fear of my own death or Hapa Papa’s and that our demise will cause suffering to our children. (Yes, I know. My brain can be my own worst torture device.)
Once, when Cookie Monster was around fifteen months old and we were re-sleep-training him, he was crying super hard from his room. As any parent who has sleep-trained before knows, listening to your precious baby scream bloody murder is utterly horrible. Of course, I let him cry but my sadistic brain forced this scenario into my head: What if someone came into our house and murdered Hapa Papa and I and it was a weekend so my mom wouldn’t swing by our house until Monday and Cookie Monster was stuck in his room because of the gate and we were dead and covered in blood and he’d be crying and starving and thirsty and surrounded by our dead bodies for at least three days until my mom came by and it warped his brain and he turned into Dexter?
Hapa Papa woke up to me weeping in bed and Cookie Monster crying in his room. He thought something horrible had happened (something horrible did happen – albeit fictionally) and when he found out why I was weeping, he just shook his head sadly. I told you. I’m crazy.
Anyhow, two things bring me comfort as I teeter on the brink of hysteria obsessing over such happy occasions.
1) Statistically speaking, the odds of something happening to my kids or my husband and I are very slim. After all, the majority of people that I know of made it through childhood mostly in tact and live relatively normal, normally allotted suffering-type lives. So, just playing the odds, everything will be fine.
2) I beg God to be merciful and ask for more faith that no matter what happens, to believe and cling to the hope that God is good and will take care of me and my family and loved ones regardless of circumstances. This is very difficult so often, after praying, I resort to Method One of playing the odds. I know. I have such little faith.
These two courses of action are all mental and usually helpful in the middle of the night (which is when these fears sideswipe me the most). However, they are very impractical in terms of daily living. Thankfully, I am a financial advisor and though I am slow to take my own advice in the more morbid areas of my profession, at least I know what to do.
So, here are some steps I’ve taken to financially protect my family in case something happens.
Disclaimer: I am a financial advisor and own a financial advising firm with my mother. I am not being compensated by any entity or company for the following information. I am ONLY explaining what I do for my own family. If you should so choose to take this advice, please realize that it is not customized nor tailored for your specific situation. I am not dispensing personalized advice for you or your family. I am not responsible in any way, shape, or form if your investments rise or fall due to market conditions. YMMV. You have been warned.
1) Get enough life insurance. What amount is enough? That depends on whether you have kids (and how many), a spouse who works or stays at home, your spend rate, etc. For us, we took out approximately 10x Hapa Papa’s earnings on his life and 5x his earnings for my life in a combination of term and permanent insurance. We took out insurance on me even though I don’t work because while I may not bring in income, I do provide a service of monetary value (eg: childcare, house cleaning, etc.).
We got a combination of term and permanent insurance because although it is cheaper to just have it all be term insurance, we realized that term insurance is like car insurance: once you stop paying, you have nothing. Now, that doesn’t mean you shouldn’t have term insurance (or car insurance), it just means that you’re paying for something that admittedly, you never want to use, but once the need for it passes, you have no actual asset. So, the permanent insurance, although it is more costly, at least builds up as a monetary asset. Plus, if the need ever arises, we can “borrow” from the asset.
We also split up the total amount insured on Hapa Papa into several chunks. (eg: Instead of buying one policy of a million dollars, you buy two policies of $500,000.) We did that for two reasons.
a) In case we can no longer afford the payments on insurance, we can drop one or more of the policy amounts but still be covered with life insurance – albeit at a lesser amount. This is particularly important because we are young and healthy now, so our premiums are much lower. If we only had ONE large policy and could no longer afford the payments, we would have to drop the entire policy, then re-apply when we are older and perhaps LESS healthy – thereby, having higher premiums for less insurance.
b) In the case that we get older and no longer need as much insurance because the kids are grown or no longer under our care, we can drop one or more policies without having to re-apply for a smaller amount (for the same reason as above).
2) Get a will and living trust (as well as Power of Attorney, Health proxy, etc.). The living trust will help prevent our assets from going into probate (as long as they are titled in the name of the trust) and being tied up by the courts. It will also help us avoid some taxes and make the management and division of our assets clear and well delineated. The trust provides for the guardianship and financial assets for our children in case we both die. This seems MOST important to me since my children are young. However, obviously, the document will still be useful when they are grown.
One of the most important aspects of our trust were the disinheriting instructions. I wanted to make sure under NO circumstances was my father, his mistress, or their children could have any possibility at inheriting our assets or children. I realize that in order for there to be any chance of my dad getting my assets or kids, multiple branches of both my and Hapa Papa’s families would have to be wiped out, in which case, we have bigger problems than inheritance issues, but I believe in being prepared.
3) Get adequate umbrella insurance coverage. If you own a business or home, it helps to have this just in case some litigious-happy person gets injured (physically, mentally, emotionally, psychically) while on your property. While one can hope the people you invite into your space aren’t the suing type, as they say, “Hope is not a course of action.” Indeed, that is good advice in most life situations.
4) Get disability insurance. Whether through your work/employer or through a company like Aflac, it’s a good idea to have some sort of disability insurance. You are more likely to be disabled than to die so, you know, it’s good policy to have it. (See what I did there?) That way, you’re not just running down your savings, you have 60-80% of your income coming in.
5) Make sure all your beneficiaries are up to date. This is pretty important. I am embarrassed to say that until we finally got our living trust done last month (it took me three years and three kids to finally get this taken care of!!), I hadn’t reviewed our beneficiaries since I opened our accounts. Hapa Papa had some of his IRAs going to his father – who passed away almost four years ago! I had some of my accounts benefiting my brother and my mother. Needless to say, I changed that RIGHT AWAY. (It’s all going to be mine, MINE, MINE!)
Anyhow, these are the things that we are doing to protect ourselves financially. Please note that most of these processes are time intensive (eg: getting health exams for life insurance, noting all your assets and accounts for the living trusts, etc.) but totally worth doing. You don’t want to have your family hung out to dry just because you were too lazy to carve out a few hours to get your financial house in order.
Incidentally, because I was so freaked out about the possibility of Hapa Papa and I dying while Cookie Monster was trapped in his room by himself, I began to run through scenarios of how we could prevent it from happening. I thought, perhaps I could call/text and check in with my mother every morning and evening so she would know we were still alive and didn’t have to run to our house and check on Cookie Monster.
I know this sounds entirely insane – and rightly so. However, if we didn’t have life insurance, living trusts, and etc., I really would be insane. If you don’t have this stuff squared away yet – get to it (even if you don’t have kids). Don’t leave a financial mess for your loved ones to navigate through. Do every one a big favor and get your shit together.