Panic Insurance

There are things which can happen that are much worse than having a home burn down, getting in a car accident or having an expensive medical condition. Let’s talk about this.

Why do you really have insurance? The logical reason would seem to be that we buy insurance to transfer risk for things that would be devastating if we had to cover the loss on our own. In practice, this is not how we use insurance. Many people buy warranty plans on their appliances, tools, phones and all sorts of electronic devices. We are insured if our tire goes flat or we lock the keys in the car. We buy vacation insurance and even pet insurance. The real reason people seem to purchase insurance is to eliminate financial surprises. I purchased a new Chrysler Town and Country a number of years ago. My confidence in the quality of the van must have been low because I paid for a 7 year/100,000-mile bumper to bumper warranty. The warranty company lost a lot on the policy. The van had repairs every year, which cost more than $1,000 and I paid nothing for them. It turns out that window motors, radios, engine wiring harnesses and other components are costly and this van had at least one of them go out every year. I definitely got rid of that lemon before the warranty expired. There was no way I was taking on the financial risk of repairing it. My thinking changed since then in that if I think I need to buy a warranty on the item because of its likelihood to break I just don’t buy it. What insurance do you believe is absolutely necessary? By necessary I mean if you incurred a loss without coverage, the result could be financial ruin, or at the very least the cost would be significant enough to put a serious pinch on your life. For me, it is liability coverage which I get through insuring home, vehicles and business. Next, it is health insurance and disability insurance. My home insurance also covers me for risks such as fire and tornado. I partake in a couple of dangerous sports, so I also have heli-evac and search & rescue insurance. The last two are cheap, but a medical rescue and flight can cost many tens of thousands. The insurance also works seamlessly with my Garmin inReach, which I find to be very valuable in insuring my safety when in remote wilderness areas. The inReach is a satellite communication device with an SOS button on it. If I press the button, a person will answer and ask what I need. If I need a helicopter to get me off of a mountain, then that is what I will get. I have been made aware of end-of-life care insurance, and it seems prudent to look into that. When I was younger and had fewer assets, I had a 20-year level- term life insurance policy. If you have people who rely on you and you require life insurance, always purchase level term life insurance. My only regret is that I didn’t get the 30-year level term. When you reach your 50s, life insurance gets expensive. 

I have recently become very interested in insurance for things far worse than financial ruin. I will call this the risk of panic and disaster. I will put this very bluntly. What could happen that would cause you or those you love to become a slave? How long can you go without food? How long can you survive surrounded by danger? How long can you last without the ability to buy anything? The purpose of insurance is to transfer risk. I cannot afford to risk any of these. War, disease and natural disaster can bring about the reality of these risks. How can we mitigate these risks? My current insurance does not protect against these things.

I require a new definition of insurance. In order to determine what this new definition is, I must list what is it that I need to insure I am able to do. We will do this by taking a look at every area of life and exploring what we NEED to do in that area. This is our objective. We will also list what could undermine it or in other words, put doing it at risk. Make this personal and do the exercise along with me. I did not come up with my list of objectives while writing this today. I have developed them over the last few years. Perhaps some of my objectives will ring as true for your life also and using them will save you a bunch of time. My objectives are my goals, and I am working at making my life line up with these statements. On some of these I have a lot of work to do so please don’t get the wrong idea. I’m like the plaque on the wall which says, “Be patient, God isn’t finished with me yet.” OK?

Physical- 

Objective– living healthy allows me to love others through

1) Community

2) Having the energy to love

3) Not being a burden to others

I eat for health and energy. On the occasions that I am eating for enjoyment I will practice moderation. I exercise daily to increase my stamina. I stretch daily to be limber. My objective is to be lean, fit and flexible.

Risks– Having the wrong attitude towards food. Having a food addiction. Not having healthy food available. Not exercising properly. Being too busy or lazy to exercise. Not stretching to increase flexibility.

Forms of insurance required– Tracking of what I eat. Having predetermined meals. Having a daily ritual of exercise and stretching.

Intellectually- 

Objective– I am a curious person with a wide variety of interests which I am constantly increasing my knowledge of. There is always one topic that I am working towards having a mastery of. I use my knowledge to connect with and mentor others.

Risks– Books and podcast being unavailable. Loss of the inner drive for growth. Loss of the ability to write down my thoughts.

Forms of insurance required– Having all audiobooks backed up. Having some books in paper. 

Emotional-

Objective– Those who interact with me can depend on me to appropriately display love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, and self-control, even in the midst of turmoil. Others can trust that I will not fret when my interest is not served but instead be assured that I take joy in seeing others prosper.

Risks– Lack of concern for others. Chemical imbalance in my brain. Chronic physical pain.

Forms of insurance required– Continual focus on being concerned for others. Prompt medical care for injuries and illness.

Vocationally-

Objective– I will use my talents and passions to serve others, and in return, they will show me that my service is of value through payment and honor.

Risks– Collapse of the economy. Physical injury. Loss of interest in doing my job. Failure to maintain relationships.

Forms of insurance required– Having multiple talents and passions so that if one outlet to perform is eliminated, I can switch to another. Being willing to leave a profession when interest in it wanes. Weekly practice of developing friendships at work.

Family- 

Objective– I enjoy and cherish my wife and children. They can trust that I will consistently and intentionally seek what is for their benefit. I will provide for the needs of my family in good times and in bad for the remainder of their lives.

Risks– Relationships becoming toxic. Lack of food, shelter, or clothing due to disaster or collapse of economy. Lack of resources to purchase food, shelter, or clothing.

Forms of insurance required– Continued love with humility and not being reactive. As my mother has said to me when I want to cut off a relationship with someone who I believe is toxic, “Don’t let the lake between you freeze.” It takes a lot of love and humility to not put up walls of defense in relationships, even with people I love, when I believe I have been wronged or rejected. Everything included in financial forms of insurance. A protected store of food, water, water filtration, medicine, hygiene products and fuel in case of emergency.

Socially- 

Objective– I have a small number of close friends I enjoy and trust who are growth-oriented. I have coaches for each of these eight areas of my life. I have trusting, respectful, and enjoyable relationships with my partners at work. I have men that I am mentoring in areas where I have expertise.

Risks– Being considered boring or irrelevant.

Forms of insurance required– A drive for continued growth in every area of life and a willingness to engage in that growth with others.

Spiritual

Objective– I cherish God and delight in all of His goodness, truth and beauty. My relationship of communing with Him throughout the day is my sustenance.

Risks– Failing to guard my heart against selfish pursuits and a lack of gratefulness.

Forms of insurance required– Give up the right to do what I want to do when I want to do it. Instead submit to what God wants me to think, say, or do in every circumstance.

Financially- 

Objective– I have the resources available to me to serve others generously. I manage my resources so that this generosity will last all the days of my life and so that my children and the generations that follow will enjoy an inheritance.

Risks– Loss of employment. Loss of pension. Economic collapse. Political collapse. Major change in tax laws which affect investments. Loss of physical or mental capacity. Lawsuits.

Forms of insurance required– Sufficient financial income to provide for regular expenses. Sufficient financial reserves to provide for long term emergencies. Sufficient investments to provide for regular expenses after retirement. Investments that provide income without eating away at the principle. Insurance policy to provide income in case of injury. Insurance policy to provide replacement of housing in case of disaster. Insurance to pay for the high cost of medical expenses. Insurance policies to pay liability claims in lawsuits. Non-correlated diversification of investments. Estate planning to limit tax exposure and provide for children upon death. Cash reserves in case the banking system shuts down.

Summary

-My overall objective is to increase the capacity to love in all areas of life.

-The risks I face are things which erode my ability to love. These risks are primarily internal. To be honest, the greatest risks I face are selfishness and a lack of discipline. The external risks I face are others acting in selfish ways toward me and disasters of nature, political upheaval, disease, and war 

The greatest risk I face are:

1. Lack of food and shelter,
2. Loss of my physical and mental health.
3. Loss of healthy relationships
4. Loss of financial resources

-Insurance of various types is required to mitigate the risks that can greatly limit my ability to love.

Most people limit their insurance to financial loss. After careful consideration, I believe financial loss to be a very significant risk, but the consequences of financial loss are almost insignificant in comparison to the first three greatest risks that I face. 

Insurance is pretty much about being protected from being blindsided. I got blindsided once and smashed two windshields with my head. I tell the whole story here in I Should Have Seen It Coming