Archive for November 19th, 2008

What Are The Odds?

Being in the life insurance business and having been on the business end of passing on checks for death benefits, I have a real sense of just how much life insurance is needed by the families that receive it and a real passion for helping others understand that buying life insurance isn’t about expense, it’s about peace of mind.

In the years that I have been posting this blog, the world according to Ed, I’ve been a bit rough on men. Maybe not rough enough though. Men have this real thing about life insurance. They seem to think it’s all about them and the money that they will have to spend to ensure that, even if they don’t, their spouse will make it to retirement financially OK. They think it’s betting against themselves. They think they would be better off just putting that money in investments so that they can enjoy it, never considering that there are significant odds against them seeing retirement.

When I say significant, let’s put that into betting context. I know people who buy multiple lottery tickets every month with a 1 in a bazillion chance of winning, or those who buy scratch tickets every payday with a 1 in 250,000 chance of winning anything other than the money you’ve blown through the years on all the losing ticket. So, what are the chances that life insurance will be needed between young adulthood and your mid sixties, what we used to fondly think of as retirement time.

Well guys, if you knew that those fairly small life insurance premiums were covering a 1 in 6 chance would it become something worth thinking about? 1 in 6 men who make it to 25 in our country don’t make it to 64. For women it is 1 in 9. That isn’t betting against yourself but rather doing the prudent thing to cover a very real risk for those who are dependent on you.

And the cost! I know everyone is rethinking how they spend money these days. Is there any chance that we have an inordinate amount of our income going to play and toys? Is it possible that with just a little creative thinking we could divert a bit of that play money to peace of mind money?

Bottom line. All of us know someone who has died far too young in a car accident. You are in a serious minority if you don’t have a family member who has died prematurely from cancer or a heart attack. And consider all those around you for who obesity is an ingrained part of life and that with that lifestyle comes the risk of diabetes and so much more. What part of life insurance doesn’t make sense?

Add comment November 19th, 2008

When All Else Fails, Consider A Surrogate Insured??

Impaired risk, an industry term that refers to life insurance on people with significant health issues, cancer, diabetes, heart disease and such, is an area that we have focused on for some time. While the masses and the giant internet agencies flock to the healthiest clients they can find in a feeding frenzy on the easily insured, some of us have found a niche that most agents would prefer to steer away from.

Because of the path we’ve chosen I often get solicitations from different large agencies to help handle our impaired risk shopping and administration. While I have used Special Risk Services out of Denver for as long as I can remember because they really are the best, like any other business we still get offers.

Most blow right through my desk and on to the trash can. One today caught my eye and because it was so bizarre I thought I would share it. This came from a series of six ideas about how to handle impaired risk cases, a lot of industry mumbo jumbo for the most part until you come to idea number six.

Number six has to do with what we should suggest if we find a client who truly is not insurable. It suggests, seriously, that you find a surrogate insurable person to take out insurance in your client’s place. So, you’re too sick to get insurance and therefore your beneficiary won’t get anything when you die, but you talk someone else into taking out insurance with, for instance, your wife as beneficiary, and when they die your wife finally gets the insurance you weren’t able to provide her.

So, I’m explaining this to my wife. “It’s like this Pam. I’m too sick to get the $1,000,000 of insurance we need to replace the income you will lose if I die, so we turn to my nephew who is healthy and get him to take out $1,000,000 with you as beneficiary. There is a downside though. He is younger and very healthy and will likely outlive me by 20 or 30 years. So, in order to make this work, my last act as a devoted husband will need to be to shoot my nephew so you can collect the money you need to get on with life.”

Bottom line. Good chuckle. The good news is that with proper preparation and shopping, very few cases are uninsurable. Call an independent agent to work on quotes for you today, but steer away from idea number six.

Add comment November 19th, 2008

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