September 2022 Newsletter
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There was a time when my friend asked me that question.
I was struck.
'Tomorrow I will die,' I suddenly felt panic. 24 hours is a short time.
A river of thoughts flew into my mind at that time. I had my kids. I hadn't met my parents for a long time. What would I do? I would spend my last 24 hours with my family and tell them I loved them.
Then I was worried. What would my kids do without me cooking, driving them to schools and places, doing laundry, or guiding them to be kind people?
Someone said I was so paranoid. God will have his plan for us, we just need to follow his guide. But I wanted to follow with good preparation.
We don't know when our life will end. Death can come your way the next hour you step out of your home, or tomorrow, or maybe next year, or in several decades. We don't know when, but we know it will happen.
We don't want to die. Early and unexpectantly.
But it can be possible.
Why shouldn't we get prepared?
And can we plan for sudden death?
We can.
We can plan for final expenses, which are used to pay for our funeral. The average funeral costs between $7,000 and $12,000, which includes the viewing, burial, service fees, transport, casket, and embalming but does not include a cemetery, monument, marker, or flowers.
We can plan for medical bills because you may be so sick or injured before your death. In Vietnam, my family has to pay for all my medical bills. In the U.S, my family does not have to, except when my beloved ones cosigned the bills. However, my medical debt has to be paid from my estate - the total assets I owned at death. Medical bills are unexpected debts that can cause someone bankruptcy.
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| Illustration: Mikyung Lee/ The Guardian |
We may have other debts. Student loan I haven't paid off. The mortgage for the home I owned. The loan for the car I was driving. And all the debts incurred during the time I started my business. All the debts must be paid from my estate before my beloved ones can have some money I left for them.
My kids are still little. They will need money for their clothes, school supplies, food, medical care, and extra-curriculum courses. They will need money to pay for the services which I can provide when I'm still alive like driving them to schools, study centers, doctor's and dentist's offices so that my husband can still work for living expenses.
And I want my kids to have a fund for their college tuition. The total cost of a four-year degree will be more than $200,000 in 2030. They can have a student loan, but I don't want them to have a big debt on their shoulder as soon as they just start their life journey.
I desire a lot. I may want to have extra money to help my kids when they need a down payment for their first car or their first home. I want to be there when they need help the most.
You may say I'm greedy. But as a mother, I want the best for my kids. I want my family to have time to recover after the loss of the mother.
I was not a breadwinner at that time. I was a full-time mom then and had no income, but I still had some economical value. The median annual salary for stay-at-home moms in 2019 is $178,201. If I pass away, my husband will have to pay at least half of this amount a year for daytime services to go to work.
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| Source: https://www.salary.com/articles/mother-salary/ |
And I was shocked when imagining what will happen to me and my kids if my husband is not here with us. We will lose everything we are having right now. I have to leave my kids to other hands to go back to work, but I won't be able to afford the present lifestyle which my husband brings home.
My husband is a breadwinner, as in other typical American households.
How much is the lifetime value of a breadwinner?
How much money can replace a family's income?
What will happen to the survivors if ...
... a business owner passes away suddenly?
... a single parent dies from a car crash?
... a parent with a special-needs child got hit by a car on the way home from work?
When death and taxes are certain, life insurance can help you solve the problems of death and taxes. Someone with life insurance dies, their family will live on with the cash benefit from the policy and the cash is income-tax free. Their family has time to grieve the loss of their beloved one, to recover from psychological shock. They have money to cover their lifestyles and prepare for their future.
A lot of questions are needed to be answered this September, as it is Life Insurance Awareness Month. The more assets you have, the more questions you have to ask and answer.
However, surveys show that there are 106 million adults who lack life insurance or are underinsured.
47% of households do not own life insurance. Those families may have nothing to carry on if the breadwinner passes away. They may be a story on the Gofundme page, which can help with funeral costs. However, the crowdfund won't help them keep the home they live in if there is not any life insurance policy in the first place.
Before closing the newsletter for September, I'd like to give you a letter written almost 100 years ago by Jack J. Leterman, who established the first John Hancock Agency in the state of Virginia.
If your family already has life insurance policies with you, I congratulate you on that. You just need to review them annually and adjust them according to your changing needs.
If you don't have your family protected yet, please do that. Life insurance protects your beloved ones when you are insured. Don't let them rely on donations from the crowd.
Protect the Ones you love!
Happy Fall!
Ha Le, CRPC™
Milky Way Retirement
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