Money Mic: How My Dad’s Life Insurance Saved Our Family

Alden Wicker
Posted

When Bad Things Happen to Happy Families

My grandmother clearly remembers that day. On a step ladder at my grandparents’ house, my mother called to my grandfather, “Dad? Come quick. I feel like I’m going to faint.” My grandfather got her off the ladder, and she laid down for a few minutes.

My grandmother sees this as proof of my mother and father’s tight bond, because at almost that exact time in New Jersey, my father radioed the airport, saying his right engine was on fire. A few minutes later, he radioed again, saying the engine had broken off and he was in a downward spiral. Those were his last words. The official report listed the damage to the plane as “destroyed.”

My grandmother got the call from a friend of my father’s, when she was in our kitchen with me and my sister. She kept her cool (remarkable, since she considered my dad one of her best friends in the world), calling a relative to come and get me and my sister. Then she drove home to tell my mother.

I was barely 3 at the time, so I don’t remember much about this time. The only utterly sad thing I do remember is a vision of my mother sometime during the weeks after, draped over the steering wheel of her pick-up truck, weeping.

The thing is, life went on, and I have many happy memories. I remember my mother asking me a few months later what color I wanted my new bedroom to be. (“Pink!”) I remember Mrs. Stamp’s private pre-school, where I learned about cocoons and how to spell “cat.” I remember walking, my hand in my sister’s, on the way to our grandparents’ house for a delicious Southern dinner of chicken and dumplings. I also remember my mother tapping numbers into her desk calculator, and the “chit chit chit” of it printing the results on ticker tape. She never looked at the numbers on the tape with panic or worry.

None of this would have been possible without life insurance.

If We Didn’t Have Life Insurance …

My mother was faced with a long list of sudden expenses: the funeral, lawyer fees for executing my dad’s estate, a mortgage, living expenses, private school and/or child care, and attempting to save for two college tuitions. If not for life insurance, she’d be doing all that with no income whatsoever, no job experience and savings that would only have lasted a few years.

It wouldn’t have been easy for her to get a job after nine years out of the workforce, especially in our tiny town. “I had no career to fall back on,” she says. “I would have had to go back to school.” She would have disappeared into the workforce and night school, and my sister would have been yanked from her school right after we lost our father.

We also wouldn’t have been able to finish the house, which would have meant an unsellable home with a giant mortgage. It would later take us three years to find a buyer for the finished home.

Life insurance answered all those questions. “It’s wrenching, but it’s a relatively simple process,” my mother says of making the life insurance claim. “You call up the insurance company; you tell them what happened. You fill out a form and you send in a death certificate.” Then they send you a check. (Today, most life insurance companies actually refuse to insure people with non-commercial pilot licenses, presumably because of a rash of accidents.)

In our case, the life insurance paid off the mortgage, and provided enough for my mother to continue to stay at home with us until I was in high school. It funded private school for my sister and me through 8th grade. Although we had only paid nine years of premiums, we received a giant influx of money that would sustain us until my mom reinvented herself as an interior designer when I was in high school and reentered the workforce on her own terms.

Of course, life wasn’t the way it was before. The dinner parties went away, overseas vacations changed to a week at the beach once a year and dining out a trip to Bud’s BBQ. But I was happy. I never noticed anything was “wrong” until I realized in third grade that, hey, everyone else has a dad and I didn’t. But now, as a grown adult, I realize how incredibly lucky I’ve been to have the life and opportunities I did. Things could have been so much worse.

The Advice My Mom Gives Anyone Who Will Listen

My mother has this advice for parents: “You have, have, have to get life insurance. Figure out what you can cut so you can afford it. It’s much more important to have life insurance than that extra dinner out.” Depending on your age and your health—see more about how to get quotes on policies below—a 20-year term life insurance policy with $1 million in coverage can cost as little as $50 a month.

Read Life Insurance 101 to learn about the basics. Then, use this checklist to take out a policy yourself.

Hopefully, you’ll never need it. But as my family learned, bad things do happen. Life insurance couldn’t replace my dad, but it did replace the income we depended on, and kept my childhood relatively intact.

Love reading other people’s financial tales? Check out more great LearnVest-exclusive personal stories.

  • Becca Wildsmith

    Alden, thank you for sharing your story. It’s inspiring — your mom is a very smart, brave woman. (PS: You look just like your dad in the attached picture!) Wishing you all the best during this holiday season!

  • Kathleen

    My husband lost his dad when he was 11 years old. His parents had mortgage insurance on their house, which paid off the house and allowed my husband and mother-in-law, a stay-at-home mom without a college education,  to stay in it. My husband is grateful that he didn’t have to move on top of losing his dad.

  • Laura

    Wow. What a story. Your family is so brave! Thanks for sharing!

    I was also wondering if LearnVest could also talk about disability insurance – how that works, how to get it, etc. I cycle and I have a friend who was in a horrible accident last year. It seems like more and more cyclists are getting run off the road in terrible accidents. I think long term disability would be a helpful topic.

    • Kim Lohse

      Yes, this is a good idea.  People are trying to be healthy, riding to work and so on.  I dont’ know a single serious cyclist who hasn’t had a bad fall or accident related to cars on the road.  

  • cl

    Your story made me cry.  I’m so sorry about your dad.  I will look into life insurance now, though.  Thank you for sharing such a personal, sad story to get the point across that life insurance may seem like something to worry about later–or not at all, as has been my case–but how important it really is.

  • cara

    As someone who lost her father, and found out that he had allowed his life insurance policy to lapse just months before his unexpected death, I can say with certainty, it is the most important bill you should pay each month. My mother hadn’t worked in over twenty years and was faced with 2 children in private schools, and 2 children in college.

    If you never take advice from a stranger ever again, take it from me now: have life insurance and keep it current.

  • Anynomous

    My father also had great insurance when he passed away from a heart attack at the early age of 43. Our mortgage was paid off, monthly payments came in and we got money for university. Unfortunately, my mother went “wack” with the cash and spent it all. Trips, expensive gifts on new boyfriends, etc. Let’s just say her and I no longer talk. So along with the insurance, I would say a really good will that doesn’t give the post education fund money either to the spouse but to a 3rd person with no implications or with conditions (at 25 years of age, or something along that line).
    Good for your mom to hold it together and use the money wisely!

  • Anonymous

    my mother did something similar with my father, and kept it going even after they divorced.  When he passed away at age 55, she was able to collect almost 100,000 dollars on the policy(which she divided between me and my brother, since my dad never gave her child support after their divorce). I know my dad wanted to take care of me and my brother, but he just couldn’t seem to hold on to a job because he was an alcoholic. I think he would be happy to know(although late as it came)that in some form, he provided care for my brother and I when we needed it.

  • Billcluea

    More important for most is disability insurance,

  • Cjcsissy

    I am so sorry to hear of the loss of your dad. You have a very smart mother. All the very best to you and your family this holiday season.

  • Talia

    Thank you for sharing your story. Your Mom is both brave and inspiring! 

  • Tiffany

    really good advice- this is something we made a priority once i transitioned to a stay at home mom. thanks for sharing!

  • http://twitter.com/kgal1298 Kate G

    You are so lucky. When my dad died when I was 17 we were fairly lucky because we were older, but still it sucked mainly because my mom was horrible with money and because my dad was so ill he couldn’t get covered for life insurance so really it was me and her and it sucked and for about 5 years after that I paid the price of helping her out way too many times…at least now my finances are coming back up, but sometimes I wish someone in my family would have been smart enough to do something to the point of at least saving to help. 

  • Janetmakris

    Alden, I adored my father. After a long illness and at the moment he passed, I was climbing steps, felt this loss of strength, turned to my husband and in a panic said, “We have to go home.” As I walked in the house 6 minutes later, the phone was ringing and it was my sister telling me that our Dad had died. I was an adult so this isn’t about Insurance for mw but sharing a moment that I think our great loves are part of us, part of our souls. Deepest sympathy on losing your Father. Both of your parents sound like remarkable people.

  • Joanne

    Thank you for sharing.  A person may think at a certain stage of their life that they may not need life insurance, even later in life when mortgages are paid off and retirement investments are in place.  But, I am a firm believer that the cost of life insurance is well worth the investment. 
    Life happens, I know in our situation, our last child was a junior in high school, and we had our “plans”.  But, we ended up adopting our 2 grandchildren, (long story).  Right around 10% of the children in the US are being raised by grandparents or relatives; the same as we are doing.  Because of the economy, un/underemployment, and societal situations such as drug and alcohol abuse of the parents, it is becoming more prevalent for grandparents and relatives raising grandchildren or nieces and nephews.  Many families are moving back in with mom and dad and placing a huge strain on the budget and causing less for retirement.
    By the time our youngest child is graduating from high school, I will be 69 and my husband will be 71, what would be considered the retirement years.  Many of the heartbreaking stories I have read is people wondering how they will find the money for the second set of children they are raising.  We are starting fresh again, and are very glad we have good life insurance.  We at this point are going to have to reassess our life insurance. 

    I would also like to add that it is important for couples for both to have life insurance.  Even if one pulled out of the workforce and they are living on one income, if the person who is staying home dies, the other half of the couple if the children are elementary school age will have to start thinking of the added expense of childcare, as well as the funeral, etc. 
    Children can also be placed on a policy for an extremely small monthly premium. They then can pick up the policy themselves when they become of age, or out of college.  Sadly, children die, could the parents pay for a funeral out of pocket?  When my dad died 2 years ago, I was shocked to find out the cost of a funeral for a no frills funeral.
    I am so grateful Alden talked about the importance of life insurance.  It is just that, insurance for the unseen and for the future.

  • terri merritts

    This is one reason I suggest to young girls to get an excellent education, get a well-paid job or start a business, save money, and be capable of doing it all by themselves, not making the mistake of starting to have kids they can’t afford or leaving work and being vulnerable thinking a man will always be there to support them. Something similar happened to my own mom but she was a businesswoman and owner and had insurance too.