Is Insurance Scriptural?

Is Insurance Scriptural? by Larry Burkett Is insurance really scriptural for a Christian? This is a question I have been asked many times. The answer to this question can be found in Ecclesiastes 6:3, "If a man fathers a hundred children and lives many years, however many they be, but his soul is not satisfied with good things, and he does not even have a proper burial, then I say, 'Better the miscarriage than he.' " Solomon is stating a very simple principle taught throughout the Bible: There is a responsibility to provide for those in our household. That responsibility does not end at death; we all are going to die. Insurance is simply a method to provide in the event we die prematurely.

The fact that we don't know exactly when we're going to die and may not have the economic resources saved to provide for our families is the justification for insurance. Insurance is neither good nor bad, moral or immoral. Insurance is a plan that can be used wisely as an asset to a Christian and to his family, or that can be used unwisely and can consume needed funds, rob God, and represent a lack of trust in God. Most of us today don't own businesses or farms as previous generations did. Therefore, insurance provides a reasonable alternative to storing inheritance in real property, provided you use it wisely and don't try to protect your family, but provide for them.

Insurance is commonly misused today in that it is used either to protect against any imagined contingency or it is used to profit. If you have so much insurance that when you die your family is better off, then literally speaking, you are better off dead. (definitely not a biblical principle). I once counseled an airline pilot who was having financial difficulties. In examining his finances, I discovered he was paying $600 a month for disability insurance.

If he had lost his pilot's license, he would have doubled his income. I asked him, "if you lost your license, would you be willing to lie in bed for the rest of your life with you arms folded over your chest?" "That's absurd," he replied. "yes," I said, "almost as absurd as believing you need to double your income if you can't pilot a plane anymore." Granted, he might need a transition period to get re-employed, but God can redirect anyone, and He may well do it by a change of vocations. The bottom line is, don't try to protect or profit through insurance.

Use it to provide. There are three basic questions that need to be answered about insurance: How much do I need? How much can I afford? What kind should I buy? How to Determine Insurance Needs Let's assume a family is living on $20,000 a year spendable income, and if the primary wage earner dies, they would have approximately $11,000 from Social Security or company benefits. That leaves approximately a $9,000 a year deficit. Using a very simple rule of thumb, the amount of insurance they would need is at least $90,000. The $90,000 invested at a 10% per year return would provide the 9,000 needed for provision.

Based on family size, age, etc. they may need additional insurance for college, estate taxes, future business, etc., but $90,000 is the minimum amount. Now that we know how much they need, it leads to the second question: How much can they afford? How Much Can You Afford? Generally, the average family can afford to spend about 5% of their net spendable income on all non company insurance. (Net spendable income is after taxes and tithes.

) For this family living on $20,000 a year, it means they have approximately $80 a month to spend to spend on life insurance. In actuality, most young couples have committed needed insurance dollars to other areas and may have as little as $15 per month available. What Kind Should I Buy? The type of life insurance a family should buy will be determined by the previous two answers: the amount of insurance needed and the amount they can afford to pay for it. Typically, the average young family is under insured because they purchased expensive insurance with limited dollars. With good long range planning a family can eventually buy insurance that provides cash accumulation, annuity, etc.

But with limited funds they need the best policy with the lowest initial cost. In the early years this will almost always be "term" insurance. Term insurance provides the highest coverage at the lowest initial cost. Other Insurance Areas In order to keep insurance in balance, Christians must consider two principles from God's Word. The first is from Matthew 6:31.

The Lord said, "Do not be anxious, saying, 'What shall we eat? or 'What shall we drink?' or 'With what shall we clothe ourselves?' " God does not want us to worry, but He does want us to plan. Thus, the balance on the other side is from Luke 14:28. "For which of you, when he wants to build a tower, does not first sit down and calculate the cost, to see if he has enough to complete it?" As discussed previously, insurance of any kind is a means of providing, not protecting and not profiting. If God has provided the assets to cover a loss, then insurance is unnecessary. For instance many families carry health, auto, and home insurance that have very small deductible amounts.

The cost of this coverage is usually very high and, in fact, most families can afford to carry higher deductibles and "self-insure" the initial cost. This no-risk concept has driven insurance rates up as well as claims related to insurance benefits. Insurance should be used to provide only what you are unable to provide. Insurance is very expensive at best, and at worst, shifts dependence away from God. Disability Insurance Disability insurance is typically high-cost insurance that is beyond the reach of the average family.

Since most families are covered by Social Security disability, any additional insurance is a cost they cannot afford. If a Christian elects to purchase disability insurance it should be for a limited period to provide a transition only. Health Insurance Health insurance is a sizeable expense most families must bear. A family covered by a company group insurance plan typically has the best health insurance at the lowest cost (to them, not the company). Those who are not covered by a group insurance plan should consider major medical insurance.

This is typically a plan that has a large deductible and covers only "disaster" charges. For instance, a $1,000 deductible policy would begin to pay after the first $1,000 is paid by the insured. Since many insurance claims are less than $1,000 for the average family, the policy costs far less than say a $100 deductible plan. Even higher deductibles are available and are used to avoid medical expenses that can easily run into hundreds of thousands of dollars in prolonged hospital stays. Faithful or Foolish? I would add that having insurance does not represent a lack of faith nor does the lack of it represent greater faith.

Insurance can be a means of wise planning or fearful living; it totally depends on the attitude of the purchaser. A family that can realistically afford insurance should provide it and remove the burden from the "church." A family that cannot afford it or cannot obtain it has a right to expect the "church" to share in their financial burden. It may well be that future generations will not be able to afford insurance for every contingency. If so, be assured God's plan still works.

"At this present time your abundance being a supply for their want, that their abundance also may become a supply for your want, that there may be equality" (2 Corinthians 8:14). Larry Burket is the founder of Christian Financial Concepts. We highly recommend his ministry and teaching.