Of Course Race Car Drivers Need Life Insurance
Danica Patrick, who has been racing cars at 200 MPH since she was in her early 20s, has become an advocate for nonprofit consumers group Life Happens, according to the Forbes’ article, “Danica Patrick: You May Not Drive a Race Car, But You Still Need Life Insurance.” The nonprofit group was formed to help consumers make informed decision on life insurance. I, too, am a huge advocate for life insurance. Many times I will meet with young(er) couple and I look at them in the face and say life insurance is a must.
It’s a rite of passage to buy life insurance before your first race. However, Patrick has more personal reasons. Her parents were in favor, as each lost their fathers during childhood and witnessed the financial stress placed on their families. They managed the risk with life insurance and saving six months’ worth of expenses for an emergency.
As far as Patrick is concerned “she didn’t want to leave people with bills they can’t pay, and not only dealing with the sadness of a loss, but trying to figure out how you’re going to manage the rest of…life.”
Life insurance allows us to deal with personal loss without compounding it with financial stress. The suggested policy for most families is a term life insurance policy with a death benefit that is approximately 15 times their annual income.
With term life insurance, many life insurance needs will expire, assuming that a family is on track to reach financial independence around retirement age. The specific term of your policy should last at least through the children’s college years—and at most through the age at which you can reasonably expect your children to be financially independent.
If you want to create an estate, fund charitable bequests, replace an estate lost to taxes or build cash value, have asset protection, then you can use some type of permanent life insurance—whole life, universal life, or variable life. However, permanent life insurance creates additional financial complexity and can be expensive.
If you have a spouse or minor children, you have loved ones relying on you financially. Term life insurance can be pretty inexpensive. And even if you’re not a race car driver, you face one of life’s most common risks—riding in or driving a motor vehicle. The life insurance that you have at work is usually inadequate to financially provide for your family in the event of your death. Besides, if your leave your job, then you usually cannot take your life insurance with you. This is why I always recommend having your own term policy.
As Patrick remarked, “It’s probably pretty uncommon to come across someone that hasn’t been in some kind of a car accident. Now, there are surely varying degrees, but you’re not wearing a six-point harness with a helmet on and an ambulance sitting nearby. So, it’s a risk no matter what you do if you’re driving anything.”
Reference: Forbes (Sept. 23, 2016) “Danica Patrick: You May Not Drive a Race Car, But You Still Need Life Insurance”