Our third visit from Mr. Life Planner was by far the most interesting. Mr. Life Planner works for Sony Life Insurance and part of the sales pitch includes a detailed “Life Simulation”, which is really intended to prove the need for their life insurance. Previously we had given him details of our monthly expenses, earnings and expected future purchases, and he came back with a variety of graphs, charts and tables mapping out our lives under various situations.
Mami and I already have other life insurance policies, but were interested in this one as it benefits Rikuto. In a nutshell, we pay into the plan monthly, and when Rikuto turns 18, we get our money back plus a little extra. If I were to meet my end before then, Mami would get that money early. Ideally, I won’t have an unfortunate early exit, in which case the money will go towards paying Rikuto’s university fees.
The charts weren’t pretty. This first graph is based on us staying healthy, working (me full-time and Mami part-time) and having one child. Despite the money from the life insurance policy going towards Rikuto’s education when he turns 18, the cost of studying is just so great, it throws us into the red and interest rates on the inevitable loans keep us struggling until we’re both 65.
This next chart uses the same data as the first, but shows us what would happen to our finances if we had two children. Now you know why Japan’s birth rate has fallen; people just can’t afford more than one child.
Interestingly, this final chart shows what would happen to Mami and Rikuto if I popped my clogs long before my time.
In this case, the mortgage is wiped out, the insurance policy kicks in, and of course all my expenses no longer exist. Mami would need to work full-time, but that’s to be expected.
It gives me a great sense of comfort to know that my family would be financially sound if I had an early exit, but I need to look carefully at our expenses to see if I can’t wipe out that horrible red dip in the first graph, because that’s definitely my preferred life plan.If you like, you can find me on Twitter at @nick_ramsay. I'd love to hear from you!