It’s been interesting over the years to see the amount of money that is thrown away because a life insurance client, not knowing any better, simply buys from the wrong company. When you couple that with the agents, especially in impaired risk life insurance, who don’t know how to find the best rates and therefore convince their customers that what they are able to come through with is, well, as good as it gets. And that is topped by the number of life insurance customers every year who are told that they can’t get life insurance when it is actually the ignorance of the agent that is keeping that from happening. So, money and opportunity wasted because of bad life insurance underwriting and poorly trained life insurance agents, is probably way more the norm than an exception.

Then there are the life insurance companies who train their agents and present their images as something more akin to a country club than a company dedicated to the proposition of protecting families in the most prudent manner possible. Let me be clear that this isn’t about envy or some desire to be looked at as more prestigious, but really gets down to the core of how families can maintain life insurance without messing up their budget. Let me be clear that there are plenty of life insurance clients who care more about the name of the life insurance company than the cost of the product and everyone with money to waste absolutely has the right to waste it. They want, just like their father and their grandfather, to own a life insurance policy from NW Mutual, New York Life or Mass Mutual. They live in a community with a name, drive a car with a name and send their children to a school with a name and I don’t say these things because they’re bad people. We all have values and draw our own lines in the sand of life based on those.

So, the point is that what we all really need from our life insurance company, whether it’s NW Mutual or Symetra is for them to be there when they’re needed and generally that’s when a loved one dies. We want fair and expedient processing of the claim and a death benefit check and if all of that is done correctly then the name of the life insurance really didn’t matter. That’s it, right? If it was I wouldn’t need to write this post to remind people that what you pay for your life insurance, and the budget that the premium dollars flow from may make a huge difference in just how far that death benefit check goes.

I worked with a couple a few years back who bought life insurance through a brother who was a new NW Mutual agent. He sold this mid 30’s couple with 4 kids $150,000 of whole life insurance each, because that was all they could afford. They didn’t say it was even comfortable in their budget, but that it was “all they could afford”. The wife was the one who contacted me after reading some hysterical rant of mine about doing the responsible thing to make sure your loss due to a premature death wasn’t just the start of the snowball rolling downhill. She was concerned that they were under insured. If the person insured makes $75,000 a year, as in this case, then their beneficiaries are going to need to adjust their lives very quickly because that income will only be replaced for two years.

She wanted to know my opinion and when I presented the idea of $1 million of 30 year term for each of them that actually fit comfortably in their budget, and explained that the term would outlive her real needs for life insurance, children, income and debt, she was interested. I didn’t need to sell her on the idea. As a Mom or a Dad that is left behind unexpectedly with four children to raise, $1 million just makes more sense than $150,000. They had bought a membership in a country club because their brother (in law) said it was the best way to spend their money.

Bottom line. Think about the needs before you look for life insurance. If a life insurance agent puts more emphasis on the name of the company and the bells and whistles of the policy than they do in lining up that death benefit with your real life needs, get another agent. If your brother is handing out that kind of advice he’s not going to be in the business long enough to advise you down the road any way. Term versus whole life insurance? Almost always term if the agent is watching your budget and your needs and not their own. If you have any questions or need to see what kind of protection those whole life dollars can really buy, call or email me directly. My name is Ed Hinerman. Let’s talk.

 

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