The Policy They Almost Refused

I will call this couple Ralph and Peggy. Their names are changed for privacy. Nothing else is.

Ralph was a personal injury attorney. Peggy had been a court stenographer, and they liked to say they met in court. When their two daughters came along, Peggy left the courtroom and became a full-time, stay-at-home mom. I was their life insurance agent.

Our first conversations were about insuring Ralph. He was the primary income earner, and as a personal injury lawyer he had seen up close what happens to a family when a paycheck stops. He was not going to let that happen in his own house. He put a large term life insurance policy in place and added disability income insurance beside it. Term life insurance is simple protection: it pays a set amount to your family if you die during the years the policy covers. Disability income insurance replaces part of your paycheck if an injury or illness keeps you from working.

Then I strongly encouraged them to put life insurance on Peggy as well. They pushed back, and their reasoning was the same reasoning I still hear from families today. Peggy had no salary, so why would they insure her?

I answered with a story from my own life. Years earlier, at a workshop in Salt Lake City, a presenter asked me a question about my own wife, Amy, that I have never forgotten. “If Amy died and her funeral was on Friday, do you want to go back to work on Monday?” I sat with that question for a long time. Then I asked Ralph the same question about Peggy.

“No. Of course not.”

That one answer changed the way they both looked at life insurance. We ultimately placed $3,500,000 of coverage on Peggy, a stay-at-home mom with no paycheck at all.

Years later, Peggy started getting headaches. She treated them like migraines until the day she nearly passed out at home, with the girls. The diagnosis was brain cancer. The doctors could slow it, but they could not save her.

I will never forget the meeting at their dining room table. The two girls were playing in the living room while the adults sat down to face what was coming. Around that table were the people Ralph and Peggy trusted: their CPA, the attorney who had prepared their estate plan and living trust, their financial planner, who was a good friend of Ralph’s, and me, the life insurance guy. One by one, the advisors walked Ralph through what to expect and the financial details that came with it.

Then it was my turn. I spoke directly to Peggy.

“I am going to deliver a check for $3,500,000 to Ralph. He will have the financial freedom to choose to stay home with the girls for as long as he wants.”

That is exactly what happened. When Peggy passed, Ralph received $3,500,000, income-tax free, and he stayed home with his daughters for an extended period. The policy they almost refused let a father be a full-time parent through the hardest season of his family’s life.

A paycheck is not the only thing a family can lose. We insure the working spouse because the loss is easy to measure: the income stops. A stay-at-home parent’s work never shows up on a pay stub, and that is exactly why so many families leave that parent uninsured. When Peggy could no longer hold the household together, the money gave Ralph something no plan on paper could have given him. It gave him the choice to be a full-time dad.

I tell Ralph and Peggy’s full story in my upcoming book, because it carries everything I believe about protecting a family in one place.

If everyone in your home is insured except the person holding the household together, it is worth 30 minutes to look at that. Schedule a free consultation and we will walk through your family’s picture together. You have both sides of the question now. The choice belongs to you.