Wouldn’t you just love to hear a detailed presentation on the intricacies of underwriting for medical history on joint owned second to die life insurance? OK, great… so that’s not really what you had in mind was it when you started reading this? And with that said, I thought I’d fun this serious subject up a bit.
Here’s the top 6 reasons why so many people will not buy life insurance:
1. It’s sold by insurance agents: Let’s be honest, most “insurance salesmen” are not perceived as being
Actually,insurance is not about being “bought or sold.” It’s meant to be about people working together as a “team” to “manage risk.” That’s what insurance is… A transference of risk. Now, I don’t think anybody likes to be “sold.” I know I don’t. BUT, I do like having peace of mind.
Do you need to supplement your retirement? Then an IUL (Indexed Universal Life) is a great product to own. One of these policies can supplement retirement, provide a death benefit, tax free loans and come with living benefits – which is being able to access up to 100% of your face value if you should become critically, chronically or terminally ill.
Most people don’t know that an annuity is an insurance product which comes with guarantees. A FIA (Fixed Index Annuity) is where you’re able to take advantage of the stock market without actually “being in“ the market and making “guaranteed income.”
2. It’s a Morbid and Boring Topic and I Just Don’t Have Time to Think About It: You’re right, I didn’t want to think about or talk about or get life insurance for most of MY life. If you really don’t like to think about death, you’re not alone. Death is an unpleasant subject and life insurance raises issues of our own mortality.
STAT: 3 in 10 people have ZERO life insurance while ½ of these are under-insured. So if that’s you, obviously, you’re not alone.
Some people say that the very thought of starting the life insurance buying process makes them feel stressed-out.
However, people that do act on learning more and act upon their life insurance needs tend to focus on the positive aspects like meeting their financial responsibilities to provide for their loved ones. They recognize that life insurance is really about life and love and about helping to ensure a positive quality of life for their spouse and/or children if they should die prematurely.
3. There are too Many Options: Yes, there’s a policy out there for every person. You bet the carriers have made certain of that! There’s 10, 20 and 30 year term insurance and permanent insurance; there are indexed products and variable products, whole life, universal life, long term care insurance, disability insurance. There are a large number of riders one can get, for children, return of premium, no lapse, 20 pay, living benefits, there’s level, graded and modified, accidental death, flexible premiums, guaranteed premiums, critical illness riders, so on and so on…
Here’s some BASICs:
Term insurance provides protection for a certain period of time (a term). If you die during the coverage period, your beneficiary receives the policy amount. If you live to end of the term, the policy simply terminates unless you opt for conversion to a “permanent” policy.
Permanent insurance offers protection for your entire life, regardless of future health changes, provided you pay the premium to keep the policy in force.
4. Life Insurance is too Complicated: Yes, life insurance is complicated. That’s why you talk with an insurance professional. Find an agent that you’re comfortable with, one that knows the products and has access to more than one or 2 choices to offer you. There are over 60 companies and probably close to a thousand products!
First you’ll need to know how much insurance you should have, or perhaps it’s about what you can afford. Maybe your income will rise so you could get a smallish term policy that costs less now and then later convert into a permanent product.
You should be thinking about:
- Debt – look at long term like a mortgage. If you should die, would you want to pay off debt or leave more for a certain number of years for your family to survive without your income?
- Do you want to leave a legacy or contribute to your favorite charity?
- What about the children? What about college – want to make provisions for that?
- Do you or will you have other long term income such as a pension or social security?
- Would you like to work on a permanent product that could provide you and your family with long term income?
5. Life insurance takes too long to underwrite: Yes it can. Fully underwritten products can take quite awhile. I’ve had cases take up to 10 weeks. If you’re pulling an APS (attending physicians statement) from your doctor and the request gets stuck under a bunch of paperwork, I would advise you to contact your doctor and have staff look for that.
On the other hand, now there are companies that have products (mostly term) that don’t require underwriting. This is called simplified issue. That’s right, no stabbing, jabbing or peeing in a cup. There’s the application (which can even be taken online), if you answer the few questions correctly, you’re qualified right away and 3-5 days later, you get your policy in the mail. Waalaa, you’re protected and have peace of mind!
Now, I must say that usually this type of coverage costs a bit more. But, for a simple term policy, which is generally inexpensive anyway, it’s a great way to go! I have one of these!
6. Life Insurance costs too much: It’s hard to put a dollar amount on peace of mind and certainly when you’re talking about your family. But there are products that can cost as little as $25 a month. Yes, I can get most younger people $100,000 of term life insurance coverage almost overnight for only $25/monthly. This can be simplified issue – no doctor visit, no poking, prodding and no complicated approval process. It’s simply a $100,000 – 20 year term policy where your rates are guaranteed to stay the same for the next 20 years!
For instance, I have a $50,000 -20 year term policy that was simplified issue (I don’t like needles) and it costs me just over $26 monthly. Life insurance can be affordable. The costs of insurance goes up as does our age and therefore the risk increases. Having a permanent policy in place is important too for end of life expenses.
Today it’s estimated that the average North American funeral which would include service at a funeral home, casket, burial at a cemetery and a no frills headstone, costs $7-10,000. You don’t get an obituary listing or flowers for that either.
Buying life insurance you can’t afford benefits no one. If it causes your family hardship or requires you to make choices that seem ridiculous, like sorry kids, we can’t take a vacation this year because we have to pay our insurance premiums… everyone loses. That’s why it’s important to purchase what meets all your needs – including your budget.
Rather than just selling insurance, I like to consider myself to be more of a risk manager. Sitting down and discussing your needs and expectations is how I like to start. If you’d like to start an online quote, some of the carriers I work with do offer simplified issue. Feel free to fill out the form to your right to begin the process. Then, call me. I’ll ask many questions as this helps me discern what type or types of insurance to discuss and teach about. Needs change so expect for me to stay in touch with you. Have questions? Want to know more? Drop a line or give me a call. AND, sign up for my news and tips – you’ll be glad you did!
Remember: The younger and healthier you are, the less insurance costs. It’s all about transferring risk… that’s what insurance is. Allow me to be service.
(c) 2014 D.C.Brown