Should Christians Have Life Insurance?

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Here's an interesting question from Crosswalk -- should Christians have life insurance? After all, if they trust God for their provision, why do they need it?

The piece is written by a man who's associated with Sound Mind Investing (SMI), a Christian investment newsletter I've discussed in the past, and generally comes to the conclusion that life insurance is ok if the buyer's attitude is right -- if he sees it as a solid financial tool and doesn't look to it as his security (a place God should have alone.) The author also says that many times Christians make two mistakes when buying life insurance:

First, overbuying. When selecting an insurance amount, many times we provide an amount sufficient that the surviving spouse would never have to work again. In some cases, we insure for an even better standard of living than our family currently maintains. It may make sense to provide a level of insurance that would allow Mom to stay at home while children are young. But insuring to a lifetime "work-free" level wastes assets that would be better spent on what should be financial priorities (like debt repayment). And second, we transfer our confidence from God to insurance. The first is harmful, the latter fatal.

The piece ends with a couple thoughts on life insurance:

• God has committed to providing for his children (Matthew 6:26, 31-32).  He can use many methods—another mate, support of extended family, friends, church, scholarships and work-study programs, Social Security, and so on. Insurance is one of many tools He may use, but it is only one.

• Buying life insurance in a way that pleases God involves faith (Hebrews 11:6), not fear (Psalm 23:4, 91:5). For what are you trusting God in your life insurance planning?

Here's my take:

1. I agree that Christians should look to God as their source for provision (Deuteronomy 8:18).

2. That said, the Bible also says that we need to plan financially for the future (Proverbs 6:6-7). Life insurance is one way to do this. (FYI, Proverbs 13:22 also deals with this as well.)

3. Yes, you should buy the amount of life insurance you need, not an amount that is so over-the-top that it's the equivalent of winning the lottery if you die. If you're doing this, it's likely that you're spending way too much on life insurance. As we know, the odds are always stacked in favor of the insurance company (they make their living doing this, after all), so buying more life insurance than we need is a bad financial move.

4. You also need to buy the right kind of life insurance. Personally, I buy term and invest the difference.

Comments

[Strick]

Always thought it weird that this argument even comes up.

I trust in God for my provision and also go to work to make money to provide for myself and my family. My going to work to earn money is not a transfer of my confidence from God to a salary. If I don't have work or lose my insurance, I trust God will be there for me and my family, but it seems irresponsible to my family to not even try to find work or buy insurance. The life insurance payout, no matter how big it is, couldn't be a substitute for faith in God's provision, as money could never take care of my family's most important need, just as a big salary never replaces my need for what God gives me.

[Big Ben]

Whether or not you need life insurance has nothing to do with your religion, Christianity or otherwise. I guess some people need an excuse to quote bible verses.

[Neal Frankle]

A great topic.

I believe that G-d does for us what we can't do for ourselves - not what we won't do for ourselves. I believe that it is our responsibility to care for those who rely on us.

Yep, buy term and invest the rest. Right on.

[JimL]

The bible also speaks about a man that does not provide for his family is worse than an unbeliever. I see life insurance as a way of provided for the family in the event one is not around to do so.

ummmmm...Big Ben,

On Sunday, there is typically a Christian topic on this website.

[Me]

I knew a family who didn't have health insurance because they believed that God would take care of them. They had 6 children, lived in a 2 bedroom apartment, and leased a car for 650 a month... As you can see they were not the best with money overall. Its important to have faith but you should also be responsible.

[Mozo]

Interesting topic indeed! I certainly agree with your 4 points - especially the last point about buying the right kind of life insurance.

[headknocker]

Not only does the Bible tell us to take care of our family, but it also says that we should consider the ant. The ant is busy preparing for the future, that includes preparing for unexpected events. How do you prepare for the unexpected? You have insurance in place.

[Michael @ The Life Insurance Insider]

There is a big difference in making the most of God's resources and worshiping money. There is also a big difference in realizing that and being open to the fact that God may be providing you the opportunity to have life insurance versus idolizing the life insurance as your protector.

[JimmyDaGeek]

I thought that, in the Old Testament, it says that G-d takes care of those that take care of themselves. Meaning that it is blasphemous to expect G-d to do everything for everyone, and we see this practiced over and over.

[FMF]

Jimmy --

It does not say that anywhere in the Bible, but that saying has become so associated with "being in the Bible" that many people believe it to be the case. That said, there are numerous Proverbs about the "diligent" and the "lazy" that essentially carry the same sentiment.

[FMF]

Jimmy --

Did a quick search: Ben Franklin said "God helps those who help themselves."

http://thinkexist.com/quotation/god_helps_those_who_help_themselves/154978.html

[TStrump]

Interesting points.
Finally purchased term life after not having anything (I'm almost 40)

[MTR]

Term life insurance is a wonderful short term band-aid, but a horrible long term strategy. Term is only a financial tool if you die early, otherwise it becomes a waste of money.

I believe God wants us to live a life of wealth and abundance. That can never be accomplished by buying something that is designed to expire so you can gamble on unstable markets, pay compounding fees, costs and taxes on the "investment," then leave no safety net for your spouse, children or grandchildren. This is a plan built on sinking sand.

I have proudly sold life insurance for over 26 years - and for over 26 years I have listened to people claim how great it is to buy term and invest the difference (and what a "rip-off" whole life is), then they go out and LOSE MONEY, run out of insurance, and make a lot of excuses to their family.

Its much better to build a plan on the solid rock of whole life insurance. Build a floor of guarantees first, THEN invest on top of that. I work with people to use life insurance as a REAL financial tool that creates more spendable wealth for retirement - with lower cost, lower tax, and a LOT less risk.

That's how life insurance is supposed to work. I think God is pleased with that.

[John Harag]

To piggy-back on what MTR said, too many people think term insurance is the only way to go, but once the term is over, there's nothing left. The sooner one buys a life insurance policy, the lower the rate, but unlike term, whole life will always cost the same. Whole life always pays for final expenses, so your family doesn't have to shoulder the financial burden for those arrangements.