Friday, September 26, 2014

You Bet Your Life on It: The Existential Journey of Buying Life Insurance

by Drew Martin
If there is value in art for creating a space to explore one’s mortality and contemplate life, and we find this across the disciplines of dance, music, literature, and theatre, then we can say that “the arts” serve a higher purpose than baser forms of entertainment, fashion, design, and other pop distractions. Of course the arts experience can never measure up to, or prepare one for, the real life events of birth, sickness, and death. If not through the arts, are there other experiences that can bring us nearer to these extremes? 

Sports, for example, can bring on hunger, pain, and exhaustion, but what about less physical actions, and something that might seem quite boring and mundane?

I recently bought life insurance independent of what is provided for me at my place of employment and it was actually a fascinating existential ordeal. What might look like a typical sales transaction with an eager salesman and a cautious potential customer is much deeper, and a little sinister because you are basically entering a you-bet-your-life-on-it-pact with a devil/angel.

A life insurance company (and here I am only talking about what is sold as “term” insurance) is betting that you will live to a certain age.  I found this fact quite comforting because even though this is all about money, it is nice to know that an organization wants me to stay alive, as opposed to a funeral home which would profit from my death. And the only way to get a phenomenal return on your investment is to die, sooner than later. Of course this is an absurd bargain because we are all worth more alive than dead.

Where is the soul in all of this? If you believe in an afterlife, whether that is a heavenly place or reincarnation, then the transaction seems even more lucrative. I think what is most interesting is that we spend most of our time on petty things, and in superficial conversations so when we are reminded of our own mortality it is too depressing and profound to contemplate. It scares us so much, that we quickly loop back into the busy distractions of our lives. But having a petty tag to your life, such as a lump of cash that a beneficiary would profit from, actually makes the thought more bearable. Not because we find comfort in a trade-in value for our corpse but because it appeals to our let’s-make-a-deal consumer mind, and a feeling of justice and fairness people actually get when they are financially compensated for an offense or loss.

The other interesting part of the deal is that there is an algorithm behind all of this. The life insurance companies need one that works in order to be profitable. A figure told to me was that only 1.5% of the policies are actually paid out because the majority of the people that buy the policy live past their term. This means that if you are healthy enough to pass muster with a company to qualify for a policy, you basically have a 98.5% chance of living for the next 20 years. That is a much higher figure than I would put on myself so not only do I have peace of mind that my wife and children would be financially stable after my death, but I also am comforted by knowing that the probability of spending another twenty years with my wife and seeing my kids graduate from colleges and marry and have their own children is, at least on paper, looking good.

One interesting social aspect of what I have seen is that most life insurance agents and policy holders are men, who are still in the majority as the head of household breadwinners. The transaction is one of duty and of taking care of one’s family. However, the people who should really be driving this are women who are more often than not the beneficiaries.