Fear of making a final decision may lead us to delay that decision. Discomfort with handling a particular issue may make us reluctant to sit down and get it over with. Perhaps it involves another person or persons and we are not comfortable working with them or refuse to work with them. Whatever the cause, delay can be a presence in our lives, including our financial lives.
When there is uncertainty about what choice to make, delay may make things clearer but it also may remove useful options from the table. The action in delaying a decision is itself a decision – one to wait, which almost certainly means that it is vulnerable to changes that may occur while we wait. We do not know what will change – or when, in what direction or amount – and so open ourselves to additional uncertainty.
One useful real life example involves life insurance. An existing policy, bought and funded many years ago, holds a place in an estate plan. However, as the insured ages, the annual increasing cost of the pure life insurance element and the relatively weak performance of insurance generally in this low interest rate environment, eat away at the funded values. This leads to a potential for the insurance to lapse upon exhausting the cash value if the owners do not begin paying premiums.
When this is a possibility, and it may be for some of you, the sooner you look at the situation and weigh your choices, the better. Waiting to see if the insured dies before the policy lapses is a gamble in one direction while pumping in money as premium to prevent a lapse (which reduces the net proceeds when set against the eventual death benefit because you are laying out money now) is a bet in another. While there is still cash value in the policy, you have more choices, including cashing out, exchanging into a new policy or perhaps opting for a paid up insurance at a lower death benefit but with no outlays required.
The longer you wait to act in this situation, the fewer and less attractive your options. It seems a better plan to be aware of the bigger picture and to make a thoughtful decision – and stick with it. No matter what choice you make, the fact that you made it gives you more control.