The Best “Crowdfunding“ Opportunity of All

This opportunity is life insurance, which was invented over 200 years ago.

By Brian Ashe, CLU

The current era of “no documentation” mortgage loans, award ribbons for everyone—just for participating in youth sports—pass/fail courses with no grades for better or worse achievement, etc., has now blossomed into “no personal responsibility” at the most basic level of all—no responsibility to our families, to our spouses and to the children we have brought into the world when a parent dies.

While there’s a wealth of research statistics from organizations like LIMRA—statistics that reveal that about 40 percent of adults in the U.S. own zero life insurance, where the rubber really meets the road is manifested in our societal environment. And this environment now enthusiastically promotes “crowdfunding” of a family’s financial needs when the breadwinner dies.

Today’s crowdfunding is largely a child of the internet. Someone posts a story of a family whose breadwinner dies and solicits donations to fund his or her funeral, the education of the children, the mortgage balance, etc. In fact, one of the largest originators of crowdfunding sites is funeral associations looking for ways to get paid for their services.

While crowdfunding may sound noble—and maybe it is for those who generously contribute—I think it’s another sad chapter in societal decline. Why? Because it reinforces the belief that others should be more responsible for the financial security of my family than I should be. You know, “I created the obligation. But you guys should pay it off!” Should this now apply to the ones we love the most?

Carry this a bit further. How would you feel about crowdfunding an able-bodied person’s car insurance, medical bills, food for the month, etc., while they were alive and capable of working? Why should it be any different when they die? Their obligations continue after death. Why not use a tried-and-true tool while they are alive and able-bodied?

The best kind of crowdfunding—life insurance

Because, you see, over 200 years ago, we invented the best form of crowdfunding in the world when someone dies. It’s called life insurance.

Insureds—the “crowd”—kick in money via premiums. The mortality risks are shared based on the law of large numbers and large amounts of tax-free cash are almost miraculously available imme diately to the family members of premium payors when they die.

This is money to pay off mortgages, educate the kids and add dignity to a spousal retirement. No wondering how much the family will get, when they will get it or how they will get it.

Informed choice replaces confusion, chaos, anxiety and internet “begging.”

Making it happen

But there are two more requirements to make the life insurance “crowdfunding” work. One is character— personal character to accept responsibility for our obligations—and action—to insure those obligations will be completed whether we live or die.

Sociologist Brené Brown, writing about personal empowerment and responsibility, says, “if you own the story, you get to write the ending.”

When we own our family’s story, do we really want the “crowd” to write the ending?

Brian Ashe, CLU, is president of Brian Ashe and Associates, Ltd., in Lisle, Ill., and the 2012 recipient of the John Newton Russell Memorial Award. A past president of MDRT and a past chair of LIFE, he may be contacted at bashe29843@aol.com