Remember the “dress for success” thing that started back in the 70’s? I think it was probably a reaction to the way most people my age decided to dress in the 60’s. It never really worked for me. Every time I dressed for success, even if I got the job I didn’t like it. I wear very successful blue jeans now and they sure are comfortable.
Having admitted that, I realize that I have just blown off those people who believe that a life insurance professional shouldn’t wear blue jeans. OK, I’ve wandered far enough. This is about life insurance planning and how planning ahead can be the key to having what you need when you need it.
Every week I talk to someone who wishes they would have bought their insurance when they were younger, healthier, not about to go to work in Afghanistan, or before they took up skydiving or mountain climbing. Part of planning for success or just planning for the future is coming to grips with the fact that life insurance is a good thing to have in place before you reach certain plateaus in life. And because of the two year contestability clause, if you buy insurance and take up some dangerous hobby or take a dangerous job like working in Afghanistan, you’re already covered and don’t have to scramble to Lloyds of London for insurance.
Whether it is as simple as having long term life insurance in force before you get married and for sure before you have children, or as complex as realizing that as a professional, say a physician, there is going to be a point not too far into your career where carrying somewhere between $2-$5 million of life insurance is just prudent financial planning. And purchased young you will find yourself quite brilliant one day when you are protecting your $350,000 a year income and using your life insurance as collateral to to build a new office or using it to fund a partnership buy/sell agreement.
Having planned ahead you don’t have to worry about whether you can get a good rate. If your health has changed it’s OK because the life insurance is already in force. If you bought it 10 years before it really became essential in your life, well, take a peek at what people are paying for insurance at your age now. You’ll be paying peanuts for coverage that people are barely able to afford just because of age.
So, as soon as you turn 18 go out and apply for $10 million worth of life insurance! Just kidding. But think ahead. When you are in your 20’s or whenever it hits you that you might like to get married and have children, go buy an easy to budget amount of life insurance and keep it in force. When you’ve chosen your professional path and have a good idea what your future is going to bring financially, apply for life insurance and have it in place.
There are some restrictions about how much a person can buy based on need and income, but those factors are very high at younger ages allowing larger amounts of insurance than most people would think. A good agent can always help you put together a proposal based on future need. Let’s face it. Even if a medical student could buy 30-40 times their annual income, while they’re in school that doesn’t amount to much. But a serious professional to be has a plan. They aren’t just flitting through med or law school and waiting until they graduate to plan their direction and know what they are financial potential is going to be.
If you’re starting a business, consider the fact that when you are successful, at the very least you will need life insurance for income replacement and debt repayment, and at best, if the income is there you might want to consider setting up a life insurance infinite banking system for your business, so you aren’t bound to the whims of banks and loan officers.
Bottom line. Just like our teachers and our parents told us, planning ahead is a good idea. I never suggest over insuring or busting a budget, but prudent forethought can save a ton of money down the road. If you have any questions, give me a call or email me directly. Let’s talk.