Crowdfunding Or Planning?

The tag line (as of today) on the memorial page of gofundme.com states: “We’re the leader in online memorial fundraising, 125,000+ memorial campaigns per year”.  Searching for ‘funeral’ will pop up thousands of families desperate to raise money for the unexpected costs they are tragically facing.

Is crowdfunding disrupting our need to plan?  

Is it a good option?   We don’t like to think about our mortality.  I’ve met very few people who want to buy Life Insurance.  And it sure feels great to give to a good cause.  With crowdfunding will this problem solve itself?  Is it feasible to think that if I don’t plan for my own needs but give to help others in need, won’t they do the same for me when it’s my turn? 

Can we depend on family, friends, and strangers?  Should we?  

Hunter

I chose a gofundme campaign at random that had a goal of $5,000 for the funeral of a toddler named Hunter who died accidentally during a family vacation.  You can’t read a story like that and not tear up, and I’m sure those who know the family (and some who don’t) felt their hearts tugged to give. In 2 days, 133 people have already contributed to help raise a total of $6,160. 

But what if instead of relying on crowdfunding, they had planned? The Life Insurance solution would have been to buy a Children’s Whole Life policy.  The cost for a $25,000 policy for a newborn boy would be in the range of $14 to $16 per month and would provide a foundation of coverage that would be with him for his entire life. Hunter’s parents probably aren’t going back to work right away after the funeral is over, and yet the bills will keep coming. Having $20,000 more money at this terrible time would have allowed them some financial breathing room to stay home and mourn.  Many parents find it healing to start a scholarship, foundation or charity in the name of their child, but that too takes money.

Spencer

Another gofundme campaign I found was for a young husband and father named Spencer who died in a motorcycle accident.  The campaign specifically stated that because he had no Life Insurance the family would be grateful for any donation made to pay for the funeral and also to help provide for his widow and two-year-old son.  So far 311 people have contributed $17,450 towards the $20,000 goal.

I don’t know his exact age, but if when he married (let’s assume at age 25) he had purchased a $250,000 30 year term Life Insurance policy he would only have had to budget about $25 per month depending on how healthy he was. That would mean that at this difficult time his widow would have 10 times more money. That would give her the ability to stay home a while, create a college fund for their son, pay off debt, perhaps go back to school or even start a business.  

Simply put: money creates opportunity. Without it, you'll have to hope that hundreds of people will come forward and pitch in enough to cover the most basic expenses.

Buying Life Insurance speaks volumes to those you love. It says "I love you" loud and clear. I've delivered death claim checks and can attest that the feeling of being loved is always the lasting sentiment. Long after the relief of the money itself has faded, the recipient still feels the love that went into that final gift.

Please comment below if you have ever donated towards a memorial fund.  

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Dawn Crouch loves to demystify insurance.  She firmly believes that with the proper understanding you are perfectly positioned to make the best decision for your own family. No smoke and mirrors. No pressure. No fancy wording and sales tactics to trap you into saying ‘yes’.