The Problem with "Free"
It's probably not what you think
Let me start with a disclaimer - I LOVE free stuff. From getting a free dessert for a birthday to “winning” an Amazon gift card from a business card drawing; I’ll take it all. But if you think about it, none of this is really “free”. You typically don’t get a “free” dessert unless you order a meal. And that Amazon gift card? Well, odds are your information is now part of a campaign to make you their client. Everything has a cost. The question I think we should be asking ourselves is “do we want to pay for it?” Let’s take a look at a couple more examples to show what I mean.
We’ll start with one of everybody’s “favorite” topics, life insurance. If you work for a big enough employer odds are this is offered as an employee benefit. It may not be “free”, but because no underwriting is required you can usually get some multiple of your salary pretty inexpensively. For families without disabilities, this could be fine.
However, if you are planning to provide for someone you care about after you are gone, this isn’t what I would use. You have little to no control over the policy. It’s highly unlikely you can control whether or not you keep your job. At some point, almost all of us are going to leave the workforce (hopefully while we’re still alive). When that happens your employer-provided life insurance will go away.
Yes, there are some policies that may be converted into personal policies, but they can get expensive. Factors affecting the price could include your age and health. I’d much rather see you control for these factors by getting a personal policy while you’re young and (hopefully) healthy. Will it cost more than what you can get from work? Most likely, but you control it.
Where can you go to get life insurance? There are life insurance agents and brokers (someone who works with many insurance companies) you can talk to for free. The insurance companies, not the agents/brokers, set the price you will pay based on your health, age, and other risk factors.
I’m also seeing more Financial Advisors who charge a fee to do a Financial Plan, and part of this plan is telling you how much insurance you need. The fee is for the plan, not the insurance. If you’re worried about getting taken advantage of reach out to me. We can have a quick call to get a ballpark idea of how much you need and then I will refer you to someone I trust.
This goes for any employee benefit you get from work. Typically when you leave this benefit goes away. Other examples include discount gym memberships, health insurance, retirement accounts, etc. With companies like Fringe working with businesses, employee benefits can truly be almost anything. I picked life insurance because, in my opinion, it can have a major impact on the lives of you and your family.
Another “free” offering I see frequently is courses or webinars. When you give a seminar about complicated topics, like disability planning, you have to keep things very generic. Individual cases are too nuanced to address in this format, not to mention the challenges of keeping personal information private. So very often things are left out, or not covered in the depth they really need to be.
For example, a general session covering “disability planning” could include an introduction to Supplemental Security Income (SSI), Medicaid, ABLE accounts, Special Needs Trusts, etc. Any and all of which could by themselves be an entire session. It can be very dangerous to walk away from one of these presentations thinking you know what you need to do next. Or even worse, walk away feeling overwhelmed because there appears to be so much to do.
Context is key. Frequently there will be things that don’t have to be on your radar, either because your child isn’t old enough or because they just don’t apply to your situation. This is where working with someone helps. They can help you prioritize what needs to be done and make sure you’re talking to the right people/organizations.
Private businesses, like True North Disability Planning, will charge you. There may be a nonprofit near you that does this for “free”. It’s not really “free”, the nonprofit relies on grants and donations to stay in business and provide this service. They frequently have the same overhead as private businesses, so need to spend some of their time raising money. You can help keep their services “free” through your own donations, and/or asking others to support them.
As a final thought, it’s my belief that when people do things for “free” there often isn’t the same commitment as when they are paid. It’s been my experience that I become more of a priority when I offer to pay someone than when they’re doing me a favor. I’m also much more likely to wonder what they are getting out of it if someone offers to do something for free. Maybe I’m just cynical, I’ll own that.
What about you? How do you feel about “free”?