Should Christians Have Life Insurance? Christian Perspective
The Bible absolutely supports financial planning, including leaving an emergency fund or inheritance to your dependents. To prove this perspective would be a short work, but I am going to talk more on this—which life insurance products are best for Christians?
Bible verses that support buying life insurance
Proverbs 6:6-7
Go to the ant, you sluggard;
consider its ways and be wise!It has no commander,
no overseer or ruler,yet it stores its provisions in summer
and gathers its food at harvest.Proverbs 13:22
A good person leaves an inheritance for their children’s children,
but a sinner’s wealth is stored up for the righteous.
If anyone does not provide for his relatives, and especially for his immediate family, he has denied the faith and is worse than an unbeliever.
And what is the best life insurance product for Christians?
Life Insurance for Chrisians
You may think I am being too narrow after hearing this, but I am going to tell you that term life insurance is the only product you should buy.
The common illusion that the insurance industry has created and maintained with tremendous effort is that—”life insurance is an investment product” (Fact: it’s primarily an expense, but as an investment it is bad). Rich people might sell life insurance, or own stocks of life insurance companies, but they will not use it for their retirement and saving plan.
You can never achieve financial independence by “investing” in a cash value life insurance (i.e. Universal life, Variable life, Universal Variable life, and other fancy products). The fee is too high for any real earning in the long run. The “growth” is most likely due to inflation. The “projected figure” that the insurance agent is going to show you will never come true. I had been an insurance agent before and I had never seen it came true. Rather, I had only seen people suffered because of the expensive life insurance products they bought.
Most people are overpaying for their life insurance, yet are underinsured. They will bear this burden for the rest of their life too, since the insurance industry has done a great job brainwashing people into believing that life insurance is for life.
The usual arguement is that “You will get nothing back with term insurance”, but the best type of life insurance is term life, because, whether we like it or not, life insurance is an expense, and we can only minimize the expense by sticking to the basic the we truly need, getting rid of it as soon as we don’t need it, and avoiding fancy features that are expensive.
They have many gimicks to get people to buy too, such as saying their products will no longer require you to pay premiums in 20 years (after 20 years they will say the projected interest earning was over stated and now you need to pay), and other numerous add-on that play number games with the money you put in, and claim to give you tax advantages.
The truth is they make sure the money you earn from whatever investment within the policy will never exceed a certain amount, so that the government won’t tax you for it. It is not wise to combine investment with life insurance in the first place, because the management fee for your investment is very high. Always! If your earning goes to management fee, then there would be no tax. No earning, no tax!
Also, all death proceeding from life insurance is tax-free, because you pay for your life insurance with after-tax money. The government isn’t going to tax you twice. This means that the proceed from term life insurance is also tax free, just like the cash value life insurance in general is tax free, should the insured person passes away.
With term life insurance, you will get a sufficient coverage on the life of the bread winner, which will give you an adequate financial compensation that will maintain the current living standard of the family for years, if the bread winner dies. The cost of term life insurance is much cheaper, and it only lasts as long as the working life of the breadwinner. Once the insured person is retired, there is no more financial need to cover his or her life. It is an expense afterall, and you don’t want an expense to last forever. What you need for retirement is money.
From this point on, should you need anymore explanation, we will have to get into the elaborate details. Click here for more detailed rebuttals against the typical sale pitches of life insurance agent. Remember, most of the time it is not too late to switch to a cheaper term life insurance, even if you have already bought a cash value life insurance of any form, but make sure you get the new policy approved first before you cancel the old ones. Your life insurance agent will most likely fearmonger you into staying with the current company, but those are usually lies. Customers usually saved money by taking the cash value out and surrender their old policies, after they get the new term life insurance in place.
If you trust me on this, you will simply forget the complexity, and just go online and shop for a term life insurance product in your area. You can buy up to 30 years of coverage or more, with a couple of good terms such as grace period, and waiver of premiums during unemployment, and that is it. You don’t even need a life insurance agent to help you, which makes it even cheaper when you bypass the middle person, who will add commission fee to your insurance cost.
Next, you are going to use the money you saved by buying the much cheaper term life insurance, instead of the typical products they want to sell you, to invest in your own business, or other investments that God led you to.
