Why I Have Mixed Feelings About Getting Life Insurance

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  • When my father died and I received his life insurance, it took me a long time to accept that the money was mine.
  • I eventually used it to buy an apartment in New York, which I later sold at a profit.
  • Since then, I’ve built wealth through real estate, but I still can’t buy life insurance.

When my father died about 30 years ago, my sister and I received a large life insurance payout. My sister was still a minor, so my mother oversaw that she invested the money with a financial advisor, but I was 19 when she died, which meant I was legally of age. It was up to me how to handle it.

It was so overwhelming, and I kept it in cash for several years, along with the money I had inherited directly. This was unfortunate, and it took me many years to find a financial advisor.

I used the money to buy real estate all over the United States

The first thing I did with the money was buy an apartment in New York after I graduated college. This made sense to me – I needed a place to live and the funds were there. For $500,000 (which seemed very expensive at the time) I got a nice two-bedroom in the West Village, overlooking the Empire State Building.

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The moment I signed the papers to buy it, my next call was to 1-800-Mattres (“Leave the last S to save!”) and I was delivered a bed in the apartment so I could sleep there that night. I was 23 years old and I had an apartment in New York and I appreciated my father and the money he left me to make it happen.

Four years later, I moved to California and sold the New York apartment for nearly double what I had paid for it. That was very satisfying, of course. I went on to buy and sell residential properties in Los Angeles; Vancouver, Canada; and Naples, Florida, before returning to New York and settling here.

My track record with real estate has not been perfect: I got caught up in the 2008 housing bubble in Florida and saw my property values ​​drop dramatically in my primary residence. Oh! But overall, real estate has been a good way to invest the proceeds from my father’s life insurance policy and inheritance. Property was an investment that I understood, and even when property values ​​went down, I still had a place to live, so I didn’t really feel like it mattered.

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I wasn’t able to buy my own life insurance

Today I am a father. I have two great children who surprise and delight me with their brilliance on a daily basis. Now that I’m a mom, I know I should probably get my own life insurance policy.

I have a friend whose mom was very thoughtful about buying life insurance, getting a big enough policy so that if, God forbid, something happened to her while my friend was still in school, college would still be paid for. My friend remembers that her mother gratefully lowered the policy (and the premium costs that come with it) once my friend successfully completed her education. This just makes so much sense.

And yet, I still haven’t brought myself to do it. Although I see the benefits of that policy in my life, the experience is still wrapped in the pain of my father’s death. I took a big hit because someone I love died. It just feels…off. It took a lot of emotional work and therapy (which I certainly paid for using some of the proceeds) to help me accept that the money was mine, to do what I thought.

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I guess I could use more therapy to help me do the right thing for my kids…

I’m probably afraid that planning my untimely death might result. My family recently went through a tragedy and I don’t want to think about the possibility of more trauma.

Sometimes people put off writing their will because it means facing their own mortality. I know I resisted until recently. But I learned something interesting from a trusts and estates attorney: Some cultures believe that when you write your will, it’s a harbinger of long life. I know I felt a sense of relief when I finally completed a new will in 2020 after putting it off for several years.

So maybe life insurance is the same. For now, my “insurance policy” is aimed at taking excellent care of my body, mind and finances. I structured things so that if something were to happen to me, my children’s education and lifestyle would be fine. But maybe, just writing this will help change my hesitancy around adding politics to the mix.

Life insurance was a touching gift from my father. I think I put it to good use. I’m not ready to make that kind of gift a possibility for my own kids yet, but I’m open to that changing.

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