Ideas, tips and news about life insurance and the uses of life insurance

I thought long and hard on President’s day of a relevant topic to post, but I could not think of an adequate tie-in. However, all those thoughts of men in white wigs reminded me that, although never president, one of the founding fathers of the U.S. is also responsible for starting the modern-day insurance system in the U.S.

In 1751, according to PBS.org, Benjamin Franklin and his Union Fire Company met with other Philadelphia fire-fighting companies to discuss the formation of a fire insurance company. Out of those discussions, the Philadelphia Contributionship was formed, which was the first successful fire insurance company in the colonies. About seventy Philadelphians initially subscribed to the contributionship.

In May 1752, the board of directors, of which Franklin was a member, decided to form an insurance company. Members agreed to make equal payments to the contributionship, which would be used to pay for losses any member would sustain through fire to his property.

Mr. Franklin also proposed other forms of insurance, including life insurance and annuities, according to PBS.org. In his Silence Dogood letters, he recommended insurance for widows and orphans, much like a current-day pension. Late in life, he also proposed crop insurance, based on the same type of organization as the Philadelphia Contributionship.

If you’re like me (e.i. male, married), you’re probably going through the “Valentine’s Day is coming fast and I have no idea what to get for my wife” syndrome. I was in the local card store yesterday and I was the only male looking at Valentine’s cards. Most men will probably wait until the last minute and will pick up any remaining card with the slightest resemblance to the desired sentiment. If it says, “For My Wife” on the cover, grab it before the gentleman standing next to you does. The last day in the card section can be brutal.

Okay, the card has been secured and now it’s gift time. What to buy?  She doesn’t like flowers because she doesn’t like the idea of killing flowers and considers it a waste of money. If you buy her a box of chocolates, she might accuse you of enabling her addiction. If you’re thinking of sexy lingerie, forget about it. The last three undergarments with hearts you bought for her are still sitting (with the tags intact) in the bottom of her drawer.

Here’s a novel idea. What’s one of the most selfless acts can you do for your wife that shows her you love her? If you thought about cleaning the house for her or washing the dinner dishes more often, you get a few points, but neither would have the same impact as you saying to your wife, “Honey, I love you more than you know and if anything should ever happened to me, I wouldn’t want you to be saddled with any financial burdens.” Then, you pull out the card and you hand it to her. When she opens it, she finds a new life insurance policy you recently purchased.

Not very romantic, you say? I guarantee you will get a great reaction from her (it will definitely be much better than her reaction to the blender you bought her last year). Serve it up at a candlelight dinner with her favorite bottle of wine and you might find out this was one of the most romantic gifts you ever gave her.

As children, we have all heard the story of the race between the tortoise and the hare. However, there’s another race these two had that hasn’t been bound into a children’s story. Yes, there is a race, but the finish line in this story is quite different – it’s retirement.

As in the original story, the hare is faster and flashier than the tortoise. He wants to get to the finish line faster, so he invests his retirement money in the stock market with a portfolio heavy with stocks and stock mutual funds. He is young, so he doesn’t mind the risk.

The tortoise plods along, as in the original story and he makes a slow but steady path to the finish line. He is not looking to get to the finish line in a hurry – he just wants to make sure that he gets there. He is not concerned with the “sex appeal” of his investments – he looks for safe and secure places to grow his retirement savings. Amongst his various investments, he also invests in a whole life policy with a mutual insurance company.

In 1998, the hare, flush with paper profits from his investments (mostly high-tech companies) takes some time off and buys new cars and houses and jewelry (all on credit, as his profits are still only on paper). He can get use to this lifestyle and is contemplating retirement. The tortoise purchases a new pair of running shoes at the discount shoe warehouse – he pays cash.

Back in the race again in 2000 (minus the houses and cars, but not the huge debt), the hare starts to catch up with the tortoise again and is well in the lead in early 2008, rapidly approaching the finish line.

If you have read any newspaper recently, you know what has happened to the hare, so I don’t have to get into the gory details. The tortoise, I am happy to report, has borrowed some money from his whole life insurance policy and last we heard, was lying on a hammock, sipping on an umbrella drink in an undisclosed tropical island.

You know the moral of the story – it’s the same as the original.