My parents never took out a life insurance policy. Scratch that, my mom did take out a life insurance policy years ago, but the insured were her kids with the beneficiaries being our BFF cousins. In short, it was a joke and it was probably sold to her by a patient she couldn't say no to. And true enough, those policies lapsed within a year or two of taking them out.
Anyway, my parents didn't have a high regard for insurance because they were one of the millions who lost their money when the pre-need companies folded up one after another. In fact, even today, most people are apprehensive about taking out life insurance because they had a bad experience, or they knew someone, with a pre-need company.
Life insurance is way different from pre-need insurance, but that's for another post. This post is about how my parents never took out life or health insurance but still turned out well. So does this mean that I shouldn't take out life and health insurance as well?
That would be a big, fat NO.
My parents never took out life insurance because they looked towards other ways to guarantee our family's future and security. My mother worked round the clock, while my father moved up the ranks in government service, guaranteeing a cushy pension for himself (and by extension, my mom). And now they're literally living almost every person's dream retirement: a nice beach house, with a steady pension and grandkids visiting every month.
But that picture doesn't quite show how my mom religiously squirreled away money just so that we could continue going to a private school. Or how my dad's heart attack decimated her savings because Philhealth's coverage is a joke. Luxury for us back then was a McDonald's Happy Meal once a month.
Looking back now, my parents were almost just a step or two away from financial trouble. They were an ambitious couple who wanted the best to their children, and so they took out loans, worked ridiculous hours and penny-pinched to make that happen. If one of them died or was permanently disabled while we were still in school, I have no doubt that we would still be able to finish schooling because we come from a tight-knit family where titos and titas would jump right in to help out. But I'm also sure that there would be no more private schools for us, or even law school for me or pilot school for my brother, because those are luxuries that we would not have been able to afford given the circumstances.
My parents were very lucky that they were able to pull it off. However, for every couple who succeeds with such a gamble, there are scores of others who would not have been able to finish the same tightrope act. And that's when life insurance comes in to soften the blow of an untimely death or disability of the breadwinner.
Instead of paying out a hefty amount every quarter, I could just follow my parents' example to the letter, saving money and investing heavily in a business for our retirement. And then crossing our fingers and praying that nothing bad happens to us or our family, because every surprise life brings will would most probably result in a significant reduction of our savings, necessitating a reboot from ground zero of our efforts at wealth accumulation.
I don't want that sort of anxiety in my life, thus, I took out life insurance on myself, with health insurance being my next project, as well as life and health insurance for my husband. I do not have my parents' grit and determination, and so I will take the "easy" way out by insuring my family's future and living way below my means. I love my high school, but if I won't be able to afford its tuition fee when it's time for my son to go to school, I won't lose sleep over it.
There's this unspoken challenge in our family that every generation must surpass the other. Considering how much my parents have achieved financially and career-wise, I seriously doubt that I'll be able to surpass their accomplishments. So I'll just change the challenge to one that really counts: Good looks. Game over then. I win.