Sometimes what seems to bet he wisest or best course of action at the time can have unintended and potentially disastrous consequences. For Cindy Wang, her husband’s decision to cancel his million-dollar life insurance policy ultimately left his family with less resources after his unexpected death—and taught Cindy a valuable lesson about preparing for the future.
A happy an healthy U.S. federal customs and border protection officer, Chi Sun “Sunny” Chan was the sole breadwinner for his family of four. His family was well covered by insurance, since Cindy had the foresight to purchase a $500,000 permanent policy for each member of the family. Even though they were paying more than $10,000 a year in premiums, Cindy thought it was worth the cost. “I thought it was prudent to buy some permanent life insurance while we were young, healthy and could afford it,” she recalled.
However, Sunny did not agree, believing that the money spent on life insurance could be put to better use for his family’s welfare. Against his agent’s advice and without discussing it with his wife (which was not unusual, Cindy said, since he handled all the finances) he decided to cancel the permanent insurance and replace it with a less expensive term policy. Unfortunately, some time later that policy lapsed due to some errors in automatic payment.
Perhaps, as time passed, Sunny might have reconsidered his choice, but he didn’t have the option. In 2006, at the age of 47, he was diagnosed with kidney cancer. Although he tried to purchase a life insurance policy at that time, his illness precluded that option. Three years later, just a few months after his youngest son turned 12, Sunny lost his battle with cancer.
While Sunny did purchase a minimal $100,000 life insurance policy from his government job, the life insurance payment was still a far cry from what Cindy would have had if the original policy had still been in place. And, as a stay-at-home mother with no job experience or skills, no close family nearby, and limited English skills, she found her new situation even more challenging.
“I witnessed the hardship Cindy went through after her husband’s death,” said her agent Evette Tsang, owner of California-based Evette Tsang Insurance & Financial Services. “She had so many worries about planning for the future, about her two children and how they would handle the loss of their father and, of course, about making ends meet. She had to handle everything—housework and all the family responsibilities of being a single parent to two teenage boys.”
Yet Cindy was determined to make wise choices and relied on Evette’s advice as she navigated through her new life. She used the government policy proceeds to purchase both paid-up life insurance and term insurance, which gave her about $1.5 million coverage. She also chose accidental death benefit, decreasing term and child protection riders for her two sons; and she purchased a long term care policy on herself as well as permanent policies for both boys, and drafted a living trust.
“It is critical for me to get adequate insurance coverage now since I am the only parent of my two great teenage sons,” she said firmly. “I want them to be financially secure should anything disastrous happen to me. If nothing happens to me, I still want them to have some legacy funds from me.”
Soon afterward, by following the advice of her business-minded friends and through teaching herself, Cindy founded a dietary supplement consulting business because she was motivated by her husband’s death to help others improve their health. Through her business, she earned her first paycheck ever in the United States. In her spare time, she helps the less fortunate as a volunteer with the American Cancer Society, the Fo Guang Shan Bodhi Temple, and Tzu-Chi Buddhist Compassion and Relief Foundation.
Two years after her husband’s death, she has been able to rebuild a life for herself and her two sons, helped in part by Sunny’s retirement savings, pension and Social Security. Her eldest son Raymond has been accepted by six Ivy League universities and several other top-notch schools—an unparalleled feat in his high school’s history. He will be attending Stanford University next fall. Cindy’s youngest son, Kevin, currently in the ninth grade, is an avid athlete as well as the vice president of his high school’s Chinese culture club, and holds leadership positions with several other clubs. He volunteers with the rest of his family every Sunday, helping to deliver breakfast to the homeless and the less fortunate.
Although their story has a relatively happy ending, it has still been a hard journey for Cindy and her boys. While nothing could have made up for the loss of Sunny, having the proceeds from the original policy would certainly have eased Cindy’s burdens, helping her and her children deal with their grief and alleviating their economic challenges brought about by Sunny’s death.
“After witnessing Cindy’s situation, I more firmly advise people to get adequate coverage when they are healthy and to maximize affordable group coverage,” Evette says.
“Cindy’s story has certainly educated me to be more realistic about how my job as an agent can profoundly impact people’s lives, as well as their surviving spouses and children. The loved ones left behind are the ones who must struggle and continue with life. People have to be adequately covered by insurance if anyone they love depends on them for their income. I believe nothing says ‘love’ better than a comprehensive life insurance policy.”
is a freelance writer based in Ohio whose articles appear in national publications. Christie is working with The Life and Health Foundation for Education, a nonprofit organization dedicated to helping consumers make smart insurance decision, on this series of articles. Christie's website is www.nancychristie.com. LIFE website: www.lifehappens.org.