Life Insurance and Living Insurance: You Need Both

2020 was a tough year for all of us. Like many Americans, I struggled both with my finances and with my sanity. Working from home in a new one-man independent insurance firm while simultaneously solo parenting a demanding toddler…it felt like the end of the world.

We are emerging from the dark shadows of the past year and a half into the light of an open economy. Like many of you, I’m hoping for the second post-pandemic Roaring 20s in as many centuries. I hope that the pain of 2020-2021 becomes a distant memory.

The pain can be stored somewhere alongside the canned food and surgical masks from the past year, but the lessons should remain front and center in our collective consciousness. Millions learned what happens when reliable income streams are cut off. Hundreds of thousands lost loved ones to this tragic pandemic. Thousands more are still experiencing the lingering symptoms of Long Covid, and just want to be able to taste a meal or take a deep breath again without pain.

This year has demonstrated, beyond a doubt, the need for both life insurance and living insurance. What’s the difference? What’s the best fit for your family? I’ll break down the options below.

Life Insurance

Depending on where you’re at in life, you’re going to need either term life or whole life options, and sometimes both. Term life is important for young and middle-aged families. It’s designed to replace your income with a large death benefit in the event that you’re gone. You’ll be gone but your family’s expenses will remain. When you bought your home, you calculated how much house you could afford. That likely was dependent on both your income and your partner’s income. If your income is no longer in the picture, term life will replace it. Your family will be able to focus on their grief instead of that huge deficit in your finances. It’s also a lot cheaper than whole life, because term life expires after a specified length of time. I recommend to my clients to have a personal policy, outside of your workplace, that covers you through your highest-earning years and can pay off the remaining amount on your mortgage, plus other expenses such as tuition payments, utilities, debts, etc. At the very least, 1-3 years of your salary can help your family immensely during a difficult time.

Whole life is important after your term policy has expired. This builds cash value and the death benefit will be paid to your beneficiaries no matter when you pass away. I sell a few policies that actually combine term and whole into one policy, with a large death benefit covering the highest-earning years and then 10% of that death benefit as a final expense policy if you outlive the term. However you choose to approach it, you don’t want to leave your family with a 10-15K bill for your final expenses. Once you’ve made it to your golden years, a final expense policy is a responsible step to take. The best way to make this a lot cheaper for your children would be to get a juvenile whole life policy when they’re young. They can take over the premium payments when they’re on their own and they can pay $5-10/month for 20-30K of whole life coverage until they’re in their 90s and be the envy of their retirement communities.

Any option you choose is better than the alternative of your family members putting up a Go Fund Me page to attempt to pay for your final expenses and/or replace your future income. Just like the old jar at the end of the bar in my college pub, there will never be enough inside for what your family needs.

Living Insurance

The worst thing that can happen for your family’s budget is not your death. It’s a disabling illness or injury that takes away your ability to earn an income and creates enormous medical expenses for your family. Life insurance replaces your income. Living insurance protects it. There is an important difference. Life insurance is for your family. Living insurance is for both you and your family.

In a previous post, I discuss how disability insurance is a vital cog in anyone’s family budget. Federal disability won’t cover what you require, and to qualify, you have to demonstrate that you are unable to perform ADLs (activities of daily living). Your job might have some disability built into your contract, but they won’t continue to pay benefits for years down the road. If you are a skilled stone mason or surgeon and develop early arthritis, you’ll be able to get in and out of the shower and make yourself a meal, but you won’t be able to continue in your chosen career path. If you’re one of the thousands of Americans who experience health events like cancer, Parkinson’s, or a stroke, you could be looking at a long road to recovery, or learning to live with a chronic and difficult condition. That’s not even counting the thousands who experience accidents and injuries that leave them in the no-man’s land of being unable to qualify for federal disability but also unable to continue in their chosen career path.

For living insurance, you’ve got several options. You can secure a long-term disability policy to protect your income against any illness or injury. If you know that you have a family history of cancer, a cancer policy could be an affordable option to protect your income and keep cash coming in while you focus on your fight. If heart attacks and strokes are on your family history GPS, you can get a critical illness policy. If you’re near or approaching retirement age, a long-term care policy can protect the legacy you’ve built in the event you require months or years of care in a nursing home.

Final Thoughts

Most folks know they need life insurance, even if they are procrastinating on getting the coverage they need. The larger vulnerability is living insurance. If you’d like to see what’s available for you, I’m an independent agent who will work for you instead of the insurance company. Give me a call or text and in 24-48 hours, I’ll have a summary of options in your hands.

Rudolph Lurz has over a decade of experience in education and a doctorate in Administrative & Policy Studies. His insurance firm offers options from numerous national carriers such as AFLAC, AIG, Americo, Mutual of Omaha, John Hancock, Foresters, Prosperity Life and Athene Annuities. He is licensed and insured in Virginia, West Virginia, Pennsylvania, Illinois, and Florida (and can provide referrals for customers in other states). He focuses primarily on life insurance, supplemental health insurance, disability insurance, and annuities. He lives in Roanoke, VA with his wife, daughter, and cat. He can be reached at or with a text/call at 540-520-3069.

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