What Can Cinco De Mayo Teach Us About Life Insurance?

Today, the 5th of May, is Cinco De Mayo – a Mexican- American celebration. It commemorates a victory by Mexico in a war against France in the 1860‘s. As I understand it, the attack by France was an effort to collect a debt:

Cinco de Mayo has its roots in the French occupation of Mexico, which took place in the aftermath of the Mexican-American War of 1846-48, the Mexican Civil War of 1858, and the 1860 Reform Wars. These wars left the Mexican Treasury nearly bankrupt. On July 17, 1861, Mexican President Benito Juárez issued a moratorium in which all foreign debt payments would be suspended for two years.[13][14] In response, France, Britain, and Spain sent naval forces to Veracruz to demand reimbursement. Britain and Spain negotiated with Mexico and withdrew, but France, at the time ruled by Napoleon III, decided to use the opportunity to establish a Latin empire in Mexico that would favor French interests, the Second Mexican Empire.

The ensuing Battle Of Puebla was significant for two reasons:

The Battle of Puebla was important for at least two reasons. First, although considerably outnumbered, the Mexicans defeated a much better-equipped French army. “This battle was significant in that the 4,000 Mexican soldiers were greatly outnumbered by the well-equipped French army of 8,000 that had not been defeated for almost 50 years.” [28][29] [note 4] Second, since the Battle of Puebla, no country in the Americas has subsequently been invaded by any other European military force.[30][note 5]

This battle may have indirectly impacted American history. One source claims that had the French won that war, they would have marched on to help the South win the American Civil War.

Wars take place on the global level, far beyond the influence of ordinary individuals. Nonetheless, lessons can be drawn that apply to us little guys. One is that in times of crisis, debts can be called by the lender. Your bank may not march an army onto your doorstep, but they do have coercive measures at their disposal. Better to avoid that problem. Stay out of debt, or at least manage it smartly.

That brings us to the second point: buy life insurance to cover whatever debt you do have. This way your heirs will not have to face a demand for payment they cannot afford.