We’ve seen this story unfold time and again: a Hollywood movie where the antagonist finds vast riches in a tomb or vault, but is unable to escape with the treasure. His fate is to either flee with his life or be buried forever with the jewels.
The Story: While on a family vacation to Mammoth, California, when I was about 9-years old, my father planned a day trip to Bodie State Historic Park, an old mining ghost town from the late 1800’s. It was a timeworn and dusty, God-forsaken place.
After a guided tour, while my brothers were outside looking for square-head nails, I found something far more interesting in one of the preserved buildings. Metal bars separated the visitor area from the exhibit, and behind those bars – coins.
Near the front of the room, on the floor sat a large bowl that had become a sort of stand-in wishing well. Some of the coins spilled around the bowl were almost within my reach.
Old enough to know better, I found a stick that would allow me to reach through the bars and drag coins towards me until they were close enough to grab. I filled my pockets with past visitors’ wishes until I could not reach another coin.
My father learned of my plunder and ushered me over to a small display in the nearby museum. The display explained the “Curse of Bodie” – that visitors who removed artifacts were plagued by horrendous misfortune. There were handwritten notes from people all over the country who had taken “souvenirs” and later developed horrible luck, only restored once the items were returned.
With great concern in his eyes, my younger brother urgently emptied his pockets of the square nails he had collected. My situation, however, was far more complicated and dire. The coins I took had intermingled with the considerable change I already had in my pocket. Would the curse really apply to spare change people left behind? They weren’t really original artifacts – were they?
Despite my best efforts, I was unable to distinguish the Bodie coins from those previously in my possession. I simply had too many more years ahead of me to risk perpetual bad luck.
It was, perhaps, the hardest thing I ever had to do in my life, but I emptied my pockets.
The Breakdown: This really shouldn’t have come as a surprise to my parents. After all, I was a byproduct of their creation from the Money Trail.
Ultimately, this is a valuable lesson about portability. It lends itself well to something many people overlook on a regular basis when they consider one of their many employee benefits: life insurance.
As mentioned in Doggie Howser, M.D., life insurance is a valuable product that replaces lost income if a person with dependents passes away. If there is someone who relies on your income (e.g., children, a spouse, aging parents, etc.), life insurance should definitely be part of your portfolio.
For the vast majority of people, term life insurance is the only product worth considering. Whole life, Universal Life, Variable Life, Indexed Universal Life, or any other hybrid variety should be avoided like the plague. The reason is straightforward: insurance and investments should be independent of one another. Products that intermingle investments and insurance are riddled with exorbitant fees.
A general guideline is to carry ten to fifteen times each spouse’s income in insurance coverage. If there is a stay-at-home spouse, it would be prudent to have a policy for them as well. The services they provide, whether it be childcare or homemaking, would still need to be fulfilled in the event of their death.
Resuming the discussion of portability and employee benefits; just as I was unable to remove the coins from Bodie, employer sponsored insurance comes with similar portability risks.
First off, with most employer policies, rates are not locked from year to year. With a term life policy, however, the rate is locked for the length of the contracted term; in the case of my policy, 25 years. This is important because if you examine a rate schedule, not only will costs increase with inflation, they increase with age too. As you get older, so does your risk of developing a life-threatening condition, such as cancer, heart disease, etc. You better believe insurance companies are pricing that risk into their premiums.
More importantly, most employment contracts are considered at-will employment. This means you can resign or your employer can let you go, at any time, for any nondiscriminatory reason.
Why is this so crucial? What if your health deteriorated during the course of your employment? What if you had a cancer scare or some other health complication during your tenure? With a compromised health record, your future premiums could skyrocket, becoming unaffordable. Worse yet, you could become uninsurable altogether.
Without portability, every passing day the risk increases of future premium hikes or the inability to get later coverage entirely.
Get independent term life coverage. Don’t bring this insurance portability curse on your family!