I wrote this post 8 years ago and now we are in a pandemic and life insurance is starting to come into focus for a lot of people, so thank you for accepting this update. All the best.
The Way It Was!
My Dad died 11 years ago this month at age 84 and had a total of $7500 worth of life insurance. My Mom had a $2500 burial policy and is still when she died at age 89. They were typical for middle-income America from the generation born in the 1920s. They didn’t carry any more than that during their working and family raising years. I wouldn’t think of being in that kind of position at this point in my life, so what’s the difference?
Even though my Dad was a fireman, he had a pension provided by the city that was, well, to die for. When he died my Mom received his pension in full, equal to his salary at the time of death and guaranteed for her life. While that was awesome at the age my Dad passed away, it would have been a struggle if he had died when the children were still dependent.
Things have changed so much. The kind of financial situation that my parents had is the rare luxury of higher-income occupations now and isn’t exactly stock with most companies. For so many of us who have taken the self-employed road in life, life insurance is the replacement for the kind of security that big company, union, and government jobs used to dole out.
These days the only way most of us can provide that level of comfort and security is to make sure we have sufficient life insurance to get to the point where our assets take over that financial role. Retirement is another part of the picture that is changing rapidly. It used to be 60 and out, then 65. Now couples are making decisions to keep on working. I know for me that is a decision I made several years ago, not because we will have to but because I love what I do. Business is great and my customers appreciate the help I can provide. For my wife and I retirement will hopefully be more vacations, more exploring, but what it won’t be, at least for me is a stop to wage earning.
So enough about my family. There are so many families out there that are still avoiding the discussion about the role life insurance could play in their lives. When I first wrote this post we were just starting to see the light of day from the 2008 collapse. Looking back at LIMRA studies, about the same percentage of adults who say they should have had life insurance when the economy was robust, still didn’t have life insurance. So, fast forward to now. The pandemic has finally made a big change in how people feel about life insurance. LIMRA now reports 1. 29% of potential clients report that they are more likely to buy life insurance in the next 12 months. 2. 68% of recent life insurance buyers (last 24 months) indicate that Covid-19 makes them more likely to buy additional life insurance in the next 12 months. 3. 22% of those who haven’t purchased life insurance report that Covid-19 has increased their likelihood to buy life insurance.
I know I expressed in the past some dismay about how people can be in denial about the importance of life insurance even when almost all of us have known someone close who died prematurely. And my dismay has spilled over on to how GoFundMe has become kind of an after the fact way for people to get something to help get by. GoFundMe might help with a burial but it will never create enough for a family to financially move on with life. It isn’t life insurance!, So if you don’t have life insurance, why not?
There is something very freeing about having life insurance in force. And doubly so for the person that would have to pick up the pieces if you died prematurely. What is true for me has been echoed by so many of my clients. “I am grateful that someone has my back if I don’t get to where my plan is aimed.” “I’m ecstatic that my wife’s future is guaranteed by my hard work and/or my life insurance.” If you have any questions about why or just want to find out how to work life insurance into your financial picture, call or email me directly. My name is Ed Hinerman. Let’s talk.