Check out this life changing quote from Charles Caleb Colton: “The poorest man would not part with health for money, but the richest would gladly part with all their money for health.” Especially important to note is that Colton eventually killed himself rather than undergo a dreaded operation. So he wasn’t necessarily philosophizing from a position of comfort, but communicating a realization through which he was living. Do you ever choose money over health? I know I have.
Indeed the management of our own health is both more difficult—and more important—than the management of our money. And to the degree that it is possible and within our control, we are well served to do everything we can to preserve our health. Nonetheless, there are so many things in life and health over which we simply don’t and can’t exercise control. While hopefully you’ve picked up from Jim Stovall’s and my communication that we don’t recommend that you immediately hand over your premium dollars to an insurance company to transfer every risk over which you lack control, there most certainly are occasions that call for the wise use of insurance products to keep devastating health impairments from also sending us into financial ruin.
My friend and co-author of The Financial Crossroads, Jim Stovall, shares a few examples of those instances in his “Timeless Truth” from Crossroads’ ninth chapter entitled “Money and Health”:
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Timeless Truth
With rampant credit card overspending, the sub-prime housing crisis, and ridiculous long term automobile leases, most people assume poor spending habits cause personal bankruptcy. In reality, the number one cause of bankruptcy in our society today is medical bills.
For most people, it is not a matter of if but when you will need major medical coverage. And if you’re one of the lucky ones who never uses your health insurance, HOORAY! I would be very pleased to pay the fire insurance premium on my house and never use it.
If you are earning part or all of the income for a young family dependent upon your ability to work, you need to realize that you’re more likely to become disabled than to die. Most people understand life insurance is important, but they don’t realize that disability insurance is critical.
Finally, there is a flaw in the way people look at long term care between them and their spouse. There is a serious danger I like to call the second spouse syndrome. People who fall victim to the second spouse syndrome assume they will be able to take care of each other in old age. In most cases, one spouse does not have the ability to take care of the other and, obviously, at some point one of you is going to pass away, leaving the other one alone.
The second danger in second spouse syndrome assumes that one nest egg will be adequate to take care of both spouses. Too often, a spouse dies at the end of a long debilitating illness. It is not unusual for that spouse to deplete a sizable nest egg in the last several months of life, leaving the second spouse destitute when it comes to their long term care needs.
None of us want to think about the issues represented by health, disability, and long term care insurance; however, if you don’t face it as a statistical exercise now, you will face it as a daily reality later.
You will work very hard to earn, save, invest, and manage your resources. Make sure that one of life’s inevitable bumps in the road doesn’t derail you and your family financially.
– Jim Stovall
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