I’m not big on reality tv and don’t watch Kim Kardashian’s reality show. However when I learned that Kris Jenner (Kim Kardashian’s mother) demanded that Kanye West buy a life insurance policy, I knew that I could finally learn something from the Kardashians!
5 Life Insurance Lessons from the Kardashians
Kris Jenner asked Kanye West to buy a life insurance policy to protect his future unborn baby. Kanye bought a policy while his wife Kim was pregnant and didn’t wait until the child was born. When it comes to life insurance don’t procrastinate. If you have a family or planning a family, the sooner you buy a policy the better. Kanye is also in excellent health, yet he’s buying life insurance. The lesson is that the you should buy while you are healthy so that you can get the best pricing.
Money in the Bank Doesn’t Matter
Despite Kanye West and Kim Kardashian being worth over 100 Million dollars, they are still buying a life insurance policy to protect their family. Why? Because life insurance doesn’t protect your networth, it protects your future net worth – as in your future income. And if Kanye or Kim kick the bucket, their family loses out on future income, unless they have a life insurance policy.
Be Like Kris Jenner
If your son or daughter is getting married or starting a family and haven’t thought about life insurance on their own, then you should talk to them about it. Many young people don’t think about life insurance, and you can help your kids by pointing them in the right direction.
Kanye will be putting his future child as primary beneficiary and wife Kim as secondary beneficiary. This teaches us to think about our beneficiary designation. In this case since Kim earns substantial income, the child will be the primary beneficiary. In reality if you are buying a sizable policy, think about setting up a trust and naming the trust as beneficiary – it will give you more control on how your life insurance proceeds will be paid out. As an example if Kanye West was my client, I would advise him to create a trust so that if Kanye dies, his child doesn’t have control of 10 Million dollars at age 18 – rather a trustee managing the trust would control the funds and provide money to the child based on the trust guidelines.
Don’t Forget Your Wife
Aside from Kanye, Kim will also get a life insurance policy. She also has substantial earning power and if she dies, the child will lose out on money she otherwise would have earned. The truth is that even stay at home moms should consider life insurance since their contribution of taking care of kids and/or taking care of a home would cost money to replace.