Two questions often asked by Christians with regard to life insurance are: “Is insurance scriptural?” and “Does owning insurance reflect a lack of faith?” The answer to both is yes and no.
Insurance is not specifically defined in Scripture; however, the principle of future provision is. Owning insurance does not necessarily reflect a lack of faith in God, though it is increasingly being used as a substitute for faith in God's provision.
However, just as damaging are the secondary effects that insurance is having on our society: those of greed, slothfulness, waste, and fear.
Insurance is neither good nor bad, moral nor immoral. It is a tool that can be used wisely as an asset to Christians and their families, or it can be used unwisely and can become a disaster (that is, using needed current funds, robbing God of His tithe, and attempting to protect families against every conceivable adverse event).
Unfortunately, one of the bad side effects of relying so heavily on insurance to buffer every little problem is that we also buffer God's guidance. Thus, there is a transfer of trust from God to insurance.
Insurance has commonly been misused either to protect families or to profit them when its real purpose is to provide for one's dependents. God's Word teaches provision, not protection.
Insurance can be used to provide when a potential loss would be excessive. “A prudent man sees evil and hides himself, the naïve proceed and pay the penalty” (Proverbs 27:12).
If the family's primary wage earner has so much insurance that the family would be better off, financially speaking, after his or her death, the insurance was purchased for protection, which is not biblical.
Life insurance needs will vary as family financial goals, needs, and resources change. Nevertheless, a wage earner should have enough life insurance to replace the financial value that he or she provides to the people who are dependent on him or her.
I’ve heard it taught that the truly spiritual don’t need insurance.
I read the request in a church bulletin. An old man - a preacher for most of his life - was collecting funds to pay for thousands of dollars in medical bills. He did not have insurance.
I immediately thought to myself that if this man had insurance he would have saved himself and the church a lot of resources that could have been used for other necessary ministries in the church.
Since no man knows the future, who can tell him what is to come? (Ecclesiastes 8:7 NIV)
Although the purpose of insurance is to provide, it is not intended to provide with an overabundance.
Again, this provision is to be used to meet a need if a potential loss would be excessive for the survivors of the family's primary wage earner: it can provide for unexpected costs that the survivors could not pay alone, and it frees surplus funds.
How much is needed?
Although the amount of insurance should be determined by two things primarily—the amount of coverage needed and the affordability of the premiums—the following considerations should also be evaluated when deciding how much insurance to buy.
The ages of the children. The younger the children are, the longer they'll need to be supported if the primary wage earner dies.
the income capability of the surviving spouse.
Existing debt, current lifestyle, income, and other sources of after-death income besides life insurance.
A very simple rule of thumb to determine the amount of life insurance needed is to take either the amount of money a family would need annually in the event of the death of the primary wage earner or the annual salary or earning of the wage earner and multiply that amount at least by twelve. This is the minimum amount of life insurance that is needed.
If the insurance money is then invested with a 7 to 10 percent return, it would probably provide the necessary income per year that the family would need.
Of course the goal is to get to the point where you don’t need insurance coverage at some point. And, besides, if you still do need coverage at the end of your term-you can just buy some more insurance at that time, right? Not necessarily. It’s possible that you may still need insurance at the end of your term, and it’s also possible that health conditions could make it impossible to get decent coverage. What to do? You might wish to consider buying the original policy with the guaranteed renewal option. This may make it possible to get more coverage at a later date. However, be aware that future rates can be prohibitively expensive especially if you health declines. Get detailed future rate information before you buy.
1 And Moses called all Israel, and said unto them, Hear, O Israel, the statutes and judgments which I speak in your ears this day, that ye may learn them, and keep, and do them.
2 The LORD our God made a covenant with us in Horeb.
3 The LORD made not this covenant with our fathers, but with us, even us, who are all of us here alive this day.
4 The LORD talked with you face to face in the mount out of the midst of the fire,
5(I stood between the LORD and you at that time, to show you the word of the LORD: for ye were afraid by reason of the fire, and went not up into the mount;) saying,
6I am the LORD thy God, which brought thee out of the land of Egypt, from the house of bondage.