All right. Well, good morning, everybody. I have a few gluttons for punishment. After I told you last week this was going to be the real snoozer, you came back. So thank you for that. I appreciate that. This particular class is, as I think I said last week, the one that I hate the most. just because it's all about insurance. And we've talked about the steps, and I'll review them very quickly in a few minutes, that you can follow to have a good biblical financial picture in your life and a good sort of walkway to follow so you always know what you should be working on financially. But insurance is a huge part of your financial life. I'll talk exactly, I'll tell you why that is exactly We're going to talk about all different kinds of insurance today, which is why it's boring. Insurance is boring. But you do need to understand it, at least enough to know what you should have to cover assets that you have in your life. We'll talk about that in just a little bit. Just the usual reminder that if you have questions, get a hold of me one way or another. That includes at 5 o'clock tonight. My wife and I will be back here. You can come and ask us questions. We've had some good questions from people already. So there's going to be, today's the 27th, right? So there's one more night tonight and then we're going to continue to do it through October. So you'll have an opportunity every Sunday night at five o'clock to come and talk to myself, my wife, whatever, get a little advice, whatever, just have a chat, whatever you like regarding finances. So the last three weeks we covered the seven steps that I was telling you help you to line up your financial life with the Bible. They help you to get yourself ready for the next step in each case. That is why I told you, well, the other thing that I tried to do this time was give you a little more of the why you need to do things As I said in the very first class, you can just do what I'm telling you. There's nothing wrong with that. but I like to understand what I'm doing and why I'm doing it. So I'm not gonna cover these in great detail again, but I just wanted to say that these seven steps are the things that you can follow to be sure that you're living biblically, to be sure that you're following wise and prudent things to do with your finances, your money. And they are simply, I'm gonna do it a little differently than I have. Number one, save $1,000. because life happens. That's your starter emergency fund. So that you don't have to worry so much about things that happen or using your credit cards while you're number two getting out of debt. That's why you do number one. You do number two because being in debt is a terrible place to be financially. So you have to attack your debt. We're going to talk in two weeks about the intensity that you need to do that. And I'm going to talk a little bit about where, in two weeks, about where your finances take some time in your life to plan and where they don't. Everything that I'm teaching you here doesn't take a lot of your time, but some of it takes more intensity and focus than other parts of your financial life. So you got to pay off your debt. And number three, then you finish your emergency fund. so that you can really deal with the things that happen in life, like losing your job. $1,000 isn't going to take you very far if you lose your job and don't have an income for a month or two, right? That's why you need a bigger emergency fund. And you do that so that you can then, number four, five, and six, you can afford to, you're all out of debt, you have an emergency fund to handle the things that happened, so that you can invest for retirement with your income. help save for your kids college if you want to do that, so that you can pay off your mortgage early if you have one of those. Get that out of the way, then you're completely out of debt. I told you last week that there's only a few things you can now do with money once you're out of debt. It's basically you can build wealth and give generously is what you can do with money. It's wise and prudent. Do that as the Lord leads you, but those are the whys that I covered as we went through the first few weeks of this class. Now, insurance, as I said, is a very, very important part of this. I think I said in the week one, all of this works together. One of the things you're going to find if you come tonight at five o'clock and you ask me questions, is I'm going to take you right back to step number one. If you want to ask me something about investing for retirement, I'm going to say, well, okay, do you have a budget? That was step number one. Because if you're not gonna follow what I've told you to do there, why would I talk to you about the rest of it, right? It's sort of a, look, you don't have to follow any of my advice. But if you're not willing to follow the first couple steps, the rest of it's not gonna work for you, okay? So it all works together is what I'm trying to say. I'm not trying to shame anybody here. I'm just saying you're gonna be way better off doing it this way and planning your finances. And when you do that, Part of this now is to make sure that you're not going to lose the hard work that you've put into your job to earn money, to pay off your debt, to amass an emergency fund, to have retirement savings and college savings and all this. You don't want to lose all that, do you? And that's what insurance helps you not do, helps you not lose it. So the purpose of any insurance, I don't care what kind of insurance it is, is to protect you and or your loved ones against the risk of a financial event that you can't afford. So I don't care if this is life insurance or car insurance or homeowner's insurance, whatever. You're trying to protect yourself from the cost of something that you can't afford. It would financially devastate you. It's how you manage the risk of losing your assets by transferring the risk to an insurance company. Insurance companies are willing to take on the risk for you for a price, right? They have all these actuary tables. They think they know exactly what's gonna happen and they can make money taking a little bit of money from each of us to cover all of us for when something happens to that person over there. Then they pay out. They don't end up paying out to everybody. Understand that's how they're making money. So it's a critical component of your financial life. And what insurance you need depends on your net worth. This is why I started with net worth back in step number one. It depends on more than net worth. When it comes to your net worth, it is that that determines how much risk you can handle financially versus how much you want to transfer to an insurance company. Right? Right? If I have, if I'm a billionaire, I mean, the law says I have to have car insurance, liability insurance, liability coverage only. So maybe I don't want to pay for collision and comprehensive. We'll talk about this in a minute. Maybe I don't want to pay for those things. I'm a billionaire. I wreck my car. So what? I'll buy another one. I can self-insure. That's not where we are, most of us in the room. I don't know. Maybe you are. I'm not. I have insurance policies for a lot of things to make sure that my assets that I've worked so hard to get and that God has helped me to get, to build wealth, that I'm not being a poor steward of them, that I'm not going to lose them because of an accident or a fire or something. So once you build enough wealth, you no longer need some types of insurance. And that's because you can easily handle losses of a certain value. Like I just said, if you're a billionaire, that's the extreme case. But there are things, and I'll cover some of those today, where I now do something different with insurance because of where I am financially that you can too if you follow the steps and you get to that point. There's no reason you can't do that as well. I'll talk about some of that as we go. So it's imperative that you understand why you need each type of insurance policy and what coverages you need in those policies, and that's based on your financial picture. So I can't stand up here and I can give you rules of thumb, but I can't tell you what insurance you need. That's an individual thing. I'm not an insurance sales guy. I just understand insurance because I've studied it out so that I understand what I need and why. But I will say this, trying to save money by skimping on important insurance coverage is foolish. That is a foolish financial decision. I'm going to save a little bit of money on my insurance, which is like saying I'm not going to cover myself properly with insurance. And it's terrible risk management. If I don't have enough insurance on my home, for example, or I decide I don't want to pay for my homeowner's insurance once I get my mortgage paid off, The mortgage company is going to make you have it. Once I've paid off my mortgage, I don't want to pay for the homeowners insurance. I'm just going to self-insure. Or I'm going to get a much smaller policy so that my premiums are less. You can do those things. But then what happens is I pay the insurance company smaller premiums for years, my house burns down, it doesn't cover everything. Now I've paid all the premiums and I'm out of my house. It's not good risk management. So there's eight kinds of insurance that most people need during their lifetime. We're going to cover these in some detail. That is health insurance. That's to cover the high risk or high expense of necessary medical care. Auto insurance. If you drive a vehicle in the United States of America, you are required to have some insurance. This covers you against the risk of loss or damage to your vehicle, other people's vehicles, liability for if you injure somebody. Renter's insurance, if you rent your home, it protects you against the loss of your stuff. Okay, we'll talk a little bit about that. Homeowner's insurance, if you own a home, it protects you against the loss, the damage of your home, and liability on your property. Life insurance protects those that depend on your income if you die. This is one that is really misunderstood by most people. So I'm gonna cover that in some detail. Disability insurance protects your income in case of an injury and illness that lasts longer than your emergency fund. Let's say it that way. Umbrella insurance is something to protect your assets that's protection above and beyond your auto and your home policies. All of these policies have limits on them. The insurance companies only give you up to a certain amount, but there are times when you could be at risk at exceeding those amounts and you are still liable for that. which somebody sues you and wins, something like that, because you did something maybe not so smart in your car and you slid off the road and you wrecked their two cars and ran into their living room or something with your car, right? I don't know if these things happen. I see them on the news all the time. And then long-term care insurance, which covers the expense of a nursing home and in-home care. I'll talk about that towards the end. So let's talk very quickly. Obviously, since there's so many of these, I'm not going to have time to go deep into any of them, but I want to just give you an idea of the things that you should be doing and thinking about when it comes to your insurance and some of the coverage levels that you should really seriously think about and make sure you have correct. So I believe most of you understand health insurance. You probably have some idea of what this is. Now, most people's health insurance in the United States is provided through employers. That's provided often to full-time employees as a benefit. Some employers pay the entire premium. Others pay only part, and the employee pays part. That's the way my employer is. I pay part. I pay a few hundred bucks a month to cover myself, my wife, and my children. There's only one of them left. Actually, I think Kyle's still on my policy, wherever he went. But that'll end when he's 26, which is next year. So health insurance is often through your employer. Some people don't have that. Some people have, some of these Christian folks especially, some of these Christian health cost sharing plans. You do need to understand those are not insurance. They do something for you that helps you, which is other people, you pay monthly, and other people help share in any costs that you have for medical issues, surgeries, things like that. But it's not really insurance. They're limited, like an insurance policy is, on the amount of money that will be paid out to you, and they're also They're not so good if you have a chronic condition. So if you have a chronic condition like diabetes or something that you constantly need medication or medical attention for, those health cost sharing plans aren't very good because they're not required to cover and most of them don't cover pre-existing conditions. So you've got to understand the differences between insurance and those. If you're healthy, those health cost sharing plans are very good. They're much cheaper than insurances. Now, citizens that are 65 and older, and some young people that have disabilities, they qualify for Medicare. Now, again, I'm not going to talk in a lot of detail, and Medicare is one of these confusing things, as it's almost everything related to the government. However, if you're a US citizen, you will, at least under the current rules, become eligible for Medicare when you turn 65. So what this does is it's, I said up here, government paid health insurance. It is to a point, it's funded through our taxes. You all pay a tax on your income to pay for Medicare. But the misnomer about Medicare is that it's not free. OK? You don't just get free health care when they turn 65. And that's a surprise to a lot of the younger folks. You hear of things like Medicare, like, oh, I'm going to get free health care when I'm 65. No, you don't. What you get is you get a monthly amount taken out of your Social Security check that pays for the premiums for it. You have deductibles that you got to pay, just like you do with a health insurance plan. You have coinsurance that kicks in at certain points. after certain periods of time with Medicare. So Medicare doesn't cover everything, okay? It covers more for lower income people than it does for higher income people, but there's a cost. And what I say up here is that it really covers about half of the average medical expenses of someone over 65. Now, it's very complicated. Medicare Parts A, Part A is like hospitalization, That's covered. There's no deductible for that. There is a co-insurance that kicks in after 90 days, I think it is. And then it goes up if you're in the hospital for longer than that. Part B is your, it pays for the doctors and medical equipment that you need. The doctors that are actually performing the surgery, it pays them if you need surgery. Going and seeing your physician for your annual physical or whatever, it pays for that. This does have a cost. This is what's deducted out of your social security check. It pays the monthly cost for that, or quarterly, I think they do it. I'm going to skip Part C for a second. Part D is the prescription drug coverage, if you elect that. There's additional cost there. Part C is just another provision for a different way to deal with Medicare. You may have heard of these things called Medicare Advantage Plans, which are basically Medicare Parts A, B, D, plus maybe even some vision coverage and dental coverage, but it's through an insurance company. You're not dealing directly with the government, you're dealing with an insurance company. So you buy your policy through them. Part C is what allows that to happen. They deal with the government for you. And then there are these, you've probably heard of these gap policies, which are, again, insurance policies that you can get that cover all of the little costs that I was just talking about. the coinsurance, the deductibles, so that you have, if you want to pay the premium, you don't have any out-of-pocket expense. You can get gap coverage for that. Okay. Very confusing. No way to cover it. I would need like six more weeks to cover it. But everybody in here, particularly if you're approaching 65, You should pay attention to what these are. Understand this. Study it before you get to 65, because you're going to need to make some decisions on what coverage you need and what you don't. So study it out so that you understand it. The problem you have if you're, you know, I'm looking at some of you folks in your 20s and such. Well, you probably don't want to worry about this quite yet, because the law is going to change. The coverages are going to change before you ever get there. OK, so as I was just saying with Medicare, every health insurance plan has limitations and things that aren't covered by a particular plan. So you have to read your own policy to know what's covered and what isn't. There's no way to memorize the whole thing. Don't even try. But sometimes before you get certain procedures done, you might want to know if your health insurance covers it. You can just call your insurance company and find that out. The reason to do things like that are what happened to me a few years ago. I had to have a test that was done. I'm not going to go into the whole history, but I had had cancer several years ago. They removed it. Everything was good. A few years later, I had a lump show up on my neck. My cancer was here. A lump showed up here. Because of that proximity and the type of cancer I had, the test I needed was not covered by insurance. It was specifically excluded. That cost me $5,000. And the test wasn't something that was absolutely required. If I had known that it was going to cost me $5,000, I probably would have skipped it. So that's why. That's why you want to pay attention. Now, health care is very expensive. And I recommend you get health insurance plan that meets your needs. And I can't tell you what that is. You know what your needs are, not me. It's no longer required by law. You don't have to have health insurance. But what I'm telling you is you want health insurance. You're going to have something in your life that's going to cost. Again, what we're trying to do is make sure we're protecting our assets from an event that we can't afford that would devastate you financially. Health is one of those things. So make sure you have health insurance. Because unexpected illnesses, accidents can easily cost you very large amounts of money that you will never be able to recover from. Your emergency fund only protects you for a little while, right? It's only so big, and medical expenses, as most of you know, can get very high very quickly. Okay, auto insurance. Now, most people think they understand this one, and I'm sure many of you in the room do, but there's probably many of you in the room that don't. You just know it's something that you have to get when you get your car, all right? So there's really three parts of auto insurance that I want to talk about. Okay. The first one is this one, liability coverage, because you are required by law to have liability coverage. Okay. That means if you do something in your car and you damage someone else's property or you hurt them, you need to be insured to cover their expenses. Okay. So if I were to ask each one of you, don't answer out loud, if I said, do you know what cover your coverage limits are on your auto insurance policy? Most of you would say, well, of course not. Why would I know that? Well, if the next question is, well, are you properly covered? Well, you can't answer that one either. Okay. So what I'm telling you is after today, go home and check it out. Okay. Make sure you're covered properly. So most people need 10 times what is required in New York State. The numbers that are there, the $250,000 of bodily injury coverage for each person, $500,000 of bodily injury coverage for each occurrence, and $100,000 of property damage for each occurrence is what you need. The law requires you to have $25,000 in the first one, $50,000 of bodily injury coverage. Let me stop there. We were just talking about medical expenses. If you get hurt badly or someone else gets hurt badly in a car accident with your car, do you think it takes very long to get past $25,000 in medical expenses? You want to be covered for this. You want more than $25,000 of coverage. What about $10,000 in property damage? That's what the law requires. I just used the example of you slid off the road and you ran into somebody's driveway, hit both of their cars and ran through their living room. Do you think maybe you did $10,000 worth of damage? I'll bet you did. You want at least $100,000 of property damage coverage, okay? That's my recommendation to you. I don't know what you have, but that's what you should have in my opinion. With lower coverage amounts, you're taking big risks if you don't have the ability to pay for high medical bills, that's your medical bills and other people's medical bills, and property damage to other people's property that's caused by an accident with your car. You can hope it doesn't happen to you, but if it does, it will devastate you financially if you're not properly covered. That's the point I'm trying to make here about auto insurance. And it doesn't cost that much more to go from the $25,000 of bodily injury coverage to $250,000. It's a very small increment in your monthly payment. So don't skimp on that. So you are not required, that was liability insurance, you're not required by law to have collision insurance. Should you have it? Some of you probably know the answer to that. A lot of you probably don't know. Or at least have a plan to figure out if you should have collision coverage in your insurance policy. The answer that I'm going to give you is, well, yes, if you can't afford to repair or replace your car from your emergency fund. Let's take the example. Let's say you are in step two. You're trying to pay off your debt. You have a $10,000 car. Again, you slide off the road into a ditch. You rip off the side of your car. I say that because that's at least three grand in damage. But you only have $1,000 start of emergency fund because you've only saved that much. What is it you're going to do? Well, the answer is you need to have collision coverage on your insurance if that's you. You're not required by New York State law to carry comprehensive insurance. What do you think? Should you have it? The answer is very similar. Yeah, if you can't afford to repair or replace your car with one of equal value out of your emergency fund or savings for your next vehicle, I talked about that previously, I save for my next vehicle and you should too, even when you don't need one, be saving towards your next vehicle. If your car gets stolen or lost or damaged in a non-collision accident, like a fire, a flood, a hailstorm, vandalism, a tree falls on it, something like that, a non-collision occurrence. If you can't afford to replace your car, you should have comprehensive insurance. Again, it's a little more expensive, but not greatly more expensive. Because the question becomes, a tree falls on my car, totals the car. I'm not saying my car, I'm gonna say your car. If the tree fell on your car, what are you doing tomorrow? The answer is not go out and get a new car with a loan. I've made a very, I think, very good case to stop using debt. Stop it. Remember, stop it. Stop it. Don't do that. Be covered for your car if you can't afford to replace it. Again, if I'm a multimillionaire and I got lots of money and I can just go buy a car whenever I want, fine. I don't need to have comprehensive insurance, right? You see why it matters? Where you are. So this is just a little personal information. I don't carry collision or comprehensive on my cars once they get to be worth $4,000 or $5,000. Now, I used to buy only $4,000 or $5,000 cars. We did that for years. Well, I've upped my lifestyle a little bit. We bought my wife a $10,000 car last year. Now, $10,000 is more than I care to lose. Four or five I could absorb, no problem. 10,000, I don't like that number. So at that level of car, we have comprehensive and collision on her car. I also have a 2005 rust bucket pickup truck that I use to plow my driveway with. I don't carry collision or comprehensive on that. because it's probably worth three. I bought the pickup truck and a snow plow for 4,500 bucks two years ago. It ain't worth, it runs, it plows my driveway. That's all I need. I don't care. If I lose it, it's gone. No big deal. So you understand why I do that then. I also budget to save and replace my cars. So when I get to the point of, hey, I've got another 10 grand to buy my wife her next car, Well, maybe I will cut the comprehensive and collision on her car just to save a little bit of money because I've got the money to buy the next one if something happens, okay? I can do that. If you can't do that, have comprehensive and collision in your car. So if I have a more expensive car, I carry both collision and comprehensive coverage. And that should be considered part of the cost of ownership for more expensive vehicles. And it must fit in my budget. There is one of the big reasons to avoid buying brand new cars. Your insurance premiums go way up when you buy new cars. Way up. The average car payment today is something in the neighborhood of $500 and some dollars a month, which is nuts to me. I don't know why anybody would pay that for a vehicle ever. Save a little bit of money, buy a car. It'll last you for years. Do that. It's such a better financial thing. As we talked about in previous lessons, the value of cars goes down so fast. It's just a poor financial decision to have your money tied up in things like that. Things that go down in value so quickly. So don't do that. So I talked previously about the fact that the value of your vehicle should not exceed 50% of your annual income. So again, if you make $50,000 a year, the total value of the cars that you own shouldn't be more than $25,000. So you do your own calculation and that you have to add up the value of all of your cars and your toys. That's why last time I used the words Engine and wheels. If it has an engine and wheels, or if it just has wheels like a camper, all of those things count in that number. If it's more than half of your annual income, you have too much money tied up in things that go down in value very quickly. Poor financial decision. Don't do it that way. Now, there are some exceptions. I know there are people in the room, multiple people in the room, that have been given vehicles. Look, if somebody gives you a car, fine. I have no problem with what the value of your car is. None whatsoever. But if that's not you, if you're paying for your cars, don't tie up your money in things that lose value so quickly like cars do. So don't skimp on auto insurance. One accident, one stolen car, one fire, one flood, one lawsuit against you can devastate you financially, and you won't recover for years at least. So don't let that happen to yourself. Be properly insured in your auto insurance. Renter's insurance, well, here's one that a lot of people had wrong. My wife and I, we had this wrong when we first got married and got in an apartment. We didn't end up needing it, but I learned this, that a lot of people incorrectly assume that the property owner's insurance covers their belongings and furnishings in the event of a fire, a flood, or a theft. That's not true. The truth is, you are responsible for insuring your belongings in your rented home, not your landlord. It's on you. If the house burns down, the loss of your stuff is on you, not your landlord, because they own the property. You got to get that. So if you rent your home, get renter's insurance just to cover the replacement value of your belongings and furnishings, unless it won't set you back financially to replace it all. When I was a poor college kid renting a house, I had some clothes, some books. I don't think I had anything else. If the house burned down, OK. It wouldn't have put me out for the rest of my life. I didn't need renter's insurance then. But once you start having some things of value and you're renting a home, you might want to have your belongings and you own the furniture. I didn't own the furniture, for example. So you can get liability coverage for a property that you're renting as well as part of this and the whole thing costs between five and 20 bucks a month. So it's not very expensive to cover all of your things. Homeowner's insurance, now covering your home and its contents in the event of a fire is huge, because you've heard this stat, right? Most people's biggest investment in their entire life is their home, if you buy a home. And all the stuff that you put in it. Where do you keep it all, right? If there's a fire, if somebody robs you, if there's a natural disaster, earthquakes, things like that, you should cover your home, unless, of course, you can afford to replace your home out of your own pocket. I don't want to do that. My home is worth about $200,000. If it burns down, I want the insurance company to give me the money to build a new one. That's what I want. Okay. So I'm, I'm going to have homeowners insurance. If you have a mortgage, you will be required to have homeowners insurance. The bank is not going to give you a mortgage. If you don't get help, homeowners insurance, they want their investment. Remember? Cause they own most of your house. When you, when you start with a mortgage, they will make sure that you ensure it properly. But once you pay it off, Be careful. I don't want to get stuck with my house burning down and having to replace it on my own. So you should have dwelling coverage that's at least the value to replace your house. Other structures, I have a shed and a garage with stuff in it. So if those burn down, I want to be able to replace those. Personal property coverage, that's everything that's in your house, everything. Living expenses. If your house burns around this part of the world, if your house burns down today while you're sitting here listening to me, you're not going to get your house rebuilt before winter. So you need some place to live. It'll probably take you a year to get that done. By the time winter comes and goes and they can start, they can demo your old house and build you a new one, it's probably a year. So you should have coverage to make sure you have a place to live for 12 months that's paid for by your insurance. You can get family liability coverage as part of that. Guest protection, you have people that come over, you know, everybody walks around with an expensive phone or an iPad or something. If they're visiting your house, this covers their stuff, okay? It's a thousand bucks of coverage. This is my particular policy. Water backup, if you have water that comes in your house, you need to have a separate rider on your insurance that covers water backup. It's not automatically part of a homeowner's insurance policy. So if your basement floods and you lose all the stuff, this has happened to me before, you have to have the water backup part of your policy. If you don't, the insurance company is going to say, sorry. Sorry about the water in your basement and all your lost stuff. We're not paying you. So insurance like that on my $200,000 home until last year, it used to cost me 560 bucks a year. It now cost me 622 bucks a year because now the insurance companies have decided that I live too far from a fire hydrant. I have a pond that they come every year and ask if they can pump the water out of my pound to put up my neighbor's houses. But since I had, what is that, 10, 11% increase in my insurance because I'm too far. I live out in the country, many of you know where I live. It's too far from a fire hydrant. So they raised my premiums. So they do things like that to you every so often. Still, $620 a year versus a $200,000 loss, worth every penny, as far as I'm concerned. All right, now life insurance. So I want to start out with this, because I've been asked this question already. Many people get small life insurance policies. They'll get like a small whole life policy or something to cover their burial expenses. It'll cost you $8,000 to $10,000 to be buried, have a funeral, things like that. That's OK. I'm not against those things. But it's really unnecessary. If you do what I've been teaching, you don't need it. That's because your emergency fund is going to cover your final expenses. If you're married and you have a spouse and your spouse dies, you'll probably use most of your emergency fund, but you can probably still recover from that. However, if you want to have a policy like that, go ahead. I'm not against it. They're not particularly expensive. So it's eight to 10 grand. I mean, most of you in the room are young enough that you could probably save eight to 10 grand before you really are worried about dying. So you can do that. If you're a little older and you're worried about this kind of thing, well, you can get a policy, but it's going to be pretty expensive. Once you get older, whole life policies get really expensive. Most importantly, this is the part that a lot of people don't understand about life insurance. The purpose of life insurance is to ensure the financial well-being of those that depend on your income. So you have to ask yourself some questions before you decide, how much life insurance do I need to have? I'll get to that in a second. There are different types of policies. I just mentioned a whole life policy. There's universal life policies. There's term life policies. And all I want you to understand about these are there's two kinds. The first two, whole life and universal life, are cash value policies. What that means is that there's a life insurance component. In other words, if you die, there's a death benefit that's paid to your beneficiary. Plus, there's a savings or investment component that's part of it. What a lot of the insurance companies that sell this stuff will do is they will tell you, yeah, your premiums are higher than they would be with a term life policy, but we're going to take that money and invest it. And you're going to start creating some cash value as part of your policy. OK. What they're really doing is taking your money, investing it. Remember I told you the stock market, you can earn 10%, 11% annually on average. They're doing that and giving you 2%, okay? So number one, they're terrible investments. The return is terrible, okay? So what I tell people is, look, don't invest through life insurance companies. Invest yourself. Insurance, there's nothing wrong with it from that standpoint. It's pretty safe, but you can get a much better return on your own. So I don't ever recommend cash value policies to anybody. with the exception if you want to have the $8,000 to $10,000 for a burial expense policy. If you want to do that, I'm OK with that. And this is the thing that most people don't understand. I didn't understand. I used to have a whole life policy. That when you die, the insurance company pays the death benefit to your beneficiary, but any cash value that's accumulated, they keep it. Your beneficiary doesn't get that. The only way to get that money is to surrender your whole life policy or universal life policy while you're alive. And now you don't have the insurance. So what I recommend to people is you get a term life policy. It's just insurance. Just get that. Invest on your own. It costs about 1 20th of a cash value policy. you're going to pay 20 times as much for one of those whole life policies. So what I tell people is, if you have a whole life policy, you're older, your health isn't so good, you might need to keep it because you need to qualify health-wise to get a term life policy. So you might need to keep it depending on your health, your age. But a better thing, this is what I did, was I went and got myself a term life policy that was for the right amount that I needed, Once that was in place, I qualified for it, I had the health check and everything. Then I turned in my whole life policy, took the cash value and paid down my mortgage. Does that seem a little smarter? Yeah, see, you can do the same thing if you have a whole life policy. Don't cancel it until you have other insurance in place though, okay? Don't do that. perhaps need life insurance. So I would recommend you get a level term life policy for 15 to 20 years. Why 15 to 20 years? Well, in 15 to 20 years, if you're doing what I'm telling you, you're going to have enough money to self-insure. Remember how long I told you that somebody making $40,000 it would take to become a millionaire? I'll clarify that again in just a second. So the question that we're trying to answer now is, you may need life insurance, but how much do you need? Well, an expert is going to tell you 10 to 12 times your annual income. I agree with that number. The reason for that number is it takes 10 to 12% of your annual income invested to produce your annual income to replace it. Right. Okay. So if I have five, if I make $50,000 a year, if I have $500,000 in insurance, I die. My wife gets the $500,000. She can invest that earn the 10% and replace my income when I'm dead. Okay. Y'all follow that? Okay, that's how you decide how much you need. But before you decide how much you need, consider these questions. What are you trying to accomplish with your life insurance policy? All right, who is it you're protecting? A lot of people ask me about life insurance and they have no one that depends on their income. I don't want to be callous and say, look, if you die, it doesn't matter. That's not what I mean. But if no one depends on your income, you don't need a life insurance policy. I would never say those words that I just said to my wife. I have never carried a life insurance policy on her. Why? Because I don't depend on her income. Now, there are considerations when we were younger, our kids were younger. I mean, she certainly, she homeschooled the kids, she raised the kids. And I would need to replace that if I was going to continue to work. So there would be a financial impact. But I always decided that I was in good enough shape I could have absorbed those costs. I didn't need a life insurance policy on her. The other way around? Probably not true. Do you need my income? Yeah? I thought you might say so. So here's the question to ask yourself. If you died, who's going to be in trouble without your income? Ask yourself that. Do you have a mortgage, for example, that you couldn't pay? This is why I got my whole life policy back in the day, is because we were married, we didn't have kids. Shortly after that, we bought our first house. We had a, I don't even remember, I think it was a $99,000 mortgage. So I got a $100,000 policy to cover her. If I died, she could pay off the mortgage. That's why I got that. Now, that wasn't enough because she couldn't have replaced my income, but we didn't have any kids, we were 20 something. She probably would have lived an all right life. Next question, do you still have children at home? Did you intend to help put them through college? Well, you can build that into your life insurance plans, right? If you have very young children, get a 15 to 20 year term life policy that covers their college if you die in that period of time. So I don't recommend life insurance as a way to leave money for inheritance. A lot of people want to do that. Look, it's your money. You can spend it on what you want. But why not not put your money into an insurance policy, put it into an investment, let it grow, and then leave that to somebody if you want to leave money? Do that. I don't know why everybody wants so much life insurance that they can, I want to make sure I leave something for my kids. Well, OK. I'm not here to tell you what to spend your money on. I just, that's one that I'm not doing. My kids will inherit plenty. Justin's figured this out too. So what's your financial status? Do you have debt that needs to be paid off? You know, if you're married and you have joint accounts that you're in debt, when your spouse dies, you're still responsible for that debt. So you might want to, if you're deep in debt, like we were, you might want to have some insurance to cover that if your spouse were to die. But once I have, say, a million dollars invested, once I have that, and you're all saying, wow, that's not even possible. Yeah, it is. If I have a million dollars, I have no debt, and I own my house. If I die at age 60, I just told you, If I have a million dollars, I can invest that and it will produce around $100,000 a year in income. If I have that and I die, is my wife gonna struggle? So here's the question. Can my wife live off $100,000 a year? Everybody always stares at me when I ask this question. Look, if you can't live off $100,000 a year with a paid-for house and no debt, you've got a problem. It's enough. She might want more than that, but I don't know. Next question. Will my children, when I'm 60, will be 36 and married, 34 and married, 31, I don't know where Kyle went, You better be married by the time you're 31, buddy. Or faith's going to take out a policy on you and kill you. And Shannon would be 24. Are they going to struggle financially? Well, not if I've taught them God's ways, which I've tried very hard to teach them all of these things so that they can do all of these things. They're not going to be struggling. So you understand that there's a point in my life when I don't need life insurance. And I'm just about there. I don't really need it. I do have some right now. But same thing for you. There's a point when you don't need it either. It's not just this thing, oh, yeah, I should get a whole life policy. I know it cost me 20 times as much, but there's cash value, and I'm covered for my whole life. You are wasting money like crazy. Don't. Don't do that. 1 20th of the amount on a term life policy. Disability insurance, and I'm going to fly through these very quickly because I'm almost out of time. One in five people in the USA experience a long-term disability that's longer than two weeks. That's how it's defined in their lifetime. One in five people, 20% of people experience that. What would happen to you if you couldn't work due to an illness or an accident that lasted more than a couple of weeks? What would happen to you? Does your income go away? Well, you should have a three to six month, this is more of the why. This is why you need to have a three to six month emergency fund. But what if it lasts longer than that? What are you gonna do? You can't work, you're disabled. Well, disability insurance can cover that situation and it's very inexpensive, especially for those of you that are self-employed, you're relying on yourself. A lot of companies will keep you on, they'll keep paying your salary, some of them will do that But if you're self-employed and you can't work and your income goes away, what are you going to do? Well, you can get a disability insurance policy. It's very inexpensive. If you don't have it, I'm just going to tell you, just look into it. Because a long-term disability would be financially devastating for most people without this kind of insurance. Again, remember what I told you in the beginning, all insurance, you're just trying to avoid a financial event that would devastate you. That's what you're trying to avoid. So this is why you might want to get disability insurance. Umbrella insurance protects your assets should you be deemed liable for property damage or injuries above the limits of your auto and your homeowner's policy. So we talked a little bit ago about the limits of your auto policy. Remember? I told you what the law requires and then what I told you you should have. Well, there are times when it can cost you more than that. When is that? Well, it matters as you get older. You have children that do not always the smartest things. When you have some assets in real estate, you have assets in retirement accounts, people love to sue you. When you're worth millions, people come after you. That's what they do. We're a very litigious society. And sometimes your liability could be more than your auto insurance policy covers or that your homeowner's insurance policy covers. So an umbrella policy can get you up to a million dollars in coverage for liability. I'm just going to fly through this part. What it does is it dovetails with your auto and your home insurance policies so that those limits in those policies pay the deductible for this policy. And now you're covered for a million dollars. Okay. That matters. I don't want to, sorry, pick on you, Shannon, but you're just next in line. Shannon is driving a car. It's her car. She paid for it, but it's titled in my name because it has to be on my insurance policy. Okay. She's 17. Just got her license a short time ago. Good driver. I'll give her that. But who wants to trust your life savings to a 17-year-old driving a car that you're responsible for? If she gets in an accident and there's terrible injuries or death and somebody finds out I have a million dollars, they're going to sue me. That's what's going to happen. So I have one of these. I have a million dollar policy because I have assets that people will try and come after. And there's a possibility that I could be liable. Oh, there was something wrong with the car and you knew it? That's all a lawyer has to say, right? And now I'm liable. I don't have to be the one driving. That only cost me $280 a year. So it's not a big deal. Again, that's worth every penny, as far as I'm concerned, to cover my life savings, what I'm planning on living on for the last 30 years of my life. Long-term care insurance. Before you're 60, you're highly unlikely to need long-term care in a nursing home or a rehab facility. But once you turn 60, the chances skyrocket that you might end up in a nursing home. The average cost in Western New York is $11,000 a month. And the average stay is 2.44 years or 29 months. So 29 months at $11,000 a month is $319,000. That's the average cost of the care in a nursing home for people that go into a nursing home. Now that tends to make a huge dent in a surviving spouse's ability to afford to live the rest of their life. In 75% of cases in the United States, Husband dies before the wife, spends $320,000 at the end of his life trying to take care of him, and now the wife has nothing left to live on. This kind of a policy covers that. It's expensive. It's $2,500 to $3,500 a year in cost. But even if I pay $2,500 for 20 years, that would be $50,000. $50,000 investment over 20 years is way better than me losing my life savings because I'm in poor health at the end of my life and losing it all because my wife has to spend it all. Medicaid isn't picking up my money. nursing home stay, like they would for somebody that's poor, they're going to wait till you spend your money down. So they will allow all of my life savings to be spent before Medicaid is going to kick in. So I need to protect myself so that my wife can continue to live after I'm dead. Next week, we're going to talk about accountability. I'm not going to do it with slides next week. I'm going to stand up here in the pulpit and just kind of teach like I would do a normal Sunday school lesson. There are going to be slides available if you want my notes. But I'm going to talk about the fact, we talked a little bit about that you're accountable to God. We're going to talk about this idea of being a nerd or a free spirit, if you've ever heard Dave Ramsey talk about that. It's a way of talking about how different personalities interact regarding financial things. That's important for husbands and wives to know. We're going to talk about some advice for singles, about accountability and what you should be doing if you're single with your finances. Then I'm going to provide some help for married couples on how you can work together. I have had this question many times. I really want to get our finances straightened out, but he or she doesn't want to get involved. I'm going to get on you a little bit, married couples. I'm going to give you some help, biblical help, show you what I think will help you. I'm not trying to meddle in your marriages. I'm trying to tell you. I can tell you some things that my wife and I have learned about how we need to work together. There's how you can get a hold of me. And we're done. I am about four minutes over, so six minutes until the service begins. All right, you're dismissed. Thank you.