Having been in the life insurance and financial industry for as long as I have, I’ve met with thousands of people, and with each meeting, I was so intrigued as to what the triggering event was that led them in wanting to purchase a life insurance policy.
Everyone has a story, each one as unique as the individual. And, as I would listen to each client, the one constant remained the same. And that one constant was that they didn’t want to pass whatever their financial liabilities were at death, onto their beneficiaries.
Of course, ego-wise I’d like to think that when I sold a life policy, it was due to my stellar selling ability — but even the best-of-the-best salesperson won’t be able to “sell” anyone on an idea until they feel the need is real.
Once the decision had been made, my next question would be, “Do know the difference between temporary and permanent life insurance?” And I have to tell you, most didn’t, and it never came as a surprise.
In our FREE resource library, I’ve created a comprehensive list of all the Life Event Triggers that should spur you to consider your life insurance coverage. I urge you to take a look to ensure you are securing the right coverage for your family.
Since both types of life insurance serve a specific purpose, I would know early on as to which type of policy made the most sense. Some of those factors being:
- Single or married
- Are there any existing individual life policies in place (not group life policies through your employer or professional organization)
- Are there any health issues
- Are there any minor children
- Is there a mortgage
- Is there any outstanding debt (personal or business)
- Has a will or trust been established
Of course, the list of questions goes on and one. But, it’s the answers to these questions (and many more) that help alleviate the guessing game as to the type and amount of life insurance you need.
Life Insurance is Not as Overwhelming as You May Think
Believe me, the thought of life insurance is nothing less than overwhelming, I get it… Adding the what-if scenarios, self-doubt, and the bonus that now we’re being forced at facing our own mortality; it’s no wonder that you avoid this topic-of-taboo altogether.
I say this with tongue-in-cheek, but I promise you, the process of looking into a life policy, and then actually applying for that policy is not nearly as scary as you might think. I’m here to help educate you, as well as help you understand the good, the bad and the downright fugly side of life insurance.
I will say upfront that I personally believe that there are only two reasons, I repeat — 2 reasons when life insurance is not needed, and those are:
- When you are able to self-insure
- You no longer have outstanding financial liabilities
Life insurance gets down to two types; it’s either Temporary insurance (Term), or it’s Permanent insurance (Whole Life, Universal Life, etc.) — that’s it! See! You already know more than the average joe! Do know this — one size does not fit all.
If you’d like a little more insight as to the various kinds of term (temporary) life insurance available, as well as just how expensive a term policy can become, I encourage you to do your research!
This same suggestion applies in the event you’re considering a universal life or whole life (permanent) life insurance. Always, always do your research!
When you hear the “experts” recommend that you should purchase only one particular type of life insurance policy — this is wrong. Again, this is my opinion only, and I’ll explain why.
The issue that I have with this kind of blanket-advice is that these experts don’t know YOU, or your particular situation. What may work well for one family, may make absolutely no sense for another family. You’ll see what I mean as we delve a little deeper into the life insurance abyss.
Of course, I’m biased, and extremely passionate, believing that everyone (yes, even children) should have some form of life insurance policy. I speak from personal experience, because my parents didn’t have life insurance, and worse yet, didn’t believe in life insurance.
Let me share with you a little story. I’m the youngest of 5, and my mother had not been in the greatest of health for some time. None of us really knew just how ill she was, until after being admitted to the hospital a few nights after we had celebrated Christmas Eve together several years ago.
Since my dad was in complete denial about the severity of her health (and had every intention of bringing her home) he said, “Karen, since I work at night and sleep all day, I’m going to have the doctors contact you instead of me.” Well, since it tends to be a bit “busy” in this head of mine, I’m thinking — DENIAL, DENIAL, but of course, I agreed.
When the doctor called me one afternoon, and after having just read through my mom’s most recent test results, I was told that her prognosis was 6 months; I was in shock. She passed away on January 9th, and I was devastated.
Again, those same thoughts were haunting me, my own parents didn’t believe in life insurance…
I know it may sound crazy, especially since selling life insurance was a significant part of what I did for a living, but I felt (and still do) very strongly about it.
Throughout the years, I would try and talk to my dad about what they had in place, and he would repeatedly tell me, “It’s taken care of,” — and then end up in a heated argument.
With the hope of talking myself off the ledge, I continually reminded myself that this was a very proud man, and there was no way he was going to discuss anything relating to their financial situation, and especially to of all people, me – his youngest child, and daughter.
It was definitely a generational thing, of which, I clearly understood. This continued on until the day he passed away, which was 13 years after my mom; and yes you guessed it, with no life insurance.
And, by-the-way, looping back to my mother’s passing, if you’re wondering who ended up paying for her funeral, it was me.
As I mentioned in my opening statement, I have always been intrigued by the actual triggering event that led someone to purchase life insurance.
In addition to not wanting to pass any financial liabilities onto their beneficiaries, here are the next Top Three Contenders:
- The first and most common reason is that someone has experienced a recent death in the family, and they were stuck with having to pay for the funeral. They personally felt the financial magnitude the death caused, though they haven’t yet started to experience the grieving process — and these are two very different things. The individual not only felt it financially, they are now are at the beginning stages of the psychological grief, followed shortly thereafter by experiencing physical pain. The latter usually follows after the funeral has taken place, and everyone has gone back to their lives, as the “new normal” without the deceased has now begun. I can say this with complete confidence because it’s these same people who don’t want to burden someone else; or have them endure this same kind of pain. The costs involved not only entail the funeral costs but final expenses as well, in addition to all of the little things that creep in after-the-fact. Funerals are not cheap — and I don’t care how simple they are.
- The second reason is that a close friend and/or acquaintance has passed away “far too young” or, it was “completely unexpected.” The story that usually accompanies this scenario is that this individual was “so young and healthy” that there was no need for life insurance, and therefore, no life insurance policy was in place. These are also the ones where you are more likely to see the GoFundMe accounts pop-up. If you don’t know what a GoFundMe account is, it’s an account that’s set up (usually by the family) on social media, asking for monetary donations, enabling the family to pay for the funeral.
- The third and final reason (this is my favorite) is when I would receive a call from someone who just “can’t wait” to get a life insurance policy. Trust me, this would always make for an interesting conversation; and of course, my red freak flag was flying high! I can just about guarantee (every time) that in this scenario, the person had either just been diagnosed with an illness and/or disease, and they were R-A-C-I-N-G to get to the life insurance carrier before their new and updated medical records did. Trust me on this one; NO ONE is ever excited about taking out a life insurance policy on themselves – ever.
I want to put your mind at ease regarding the topics we’ve covered, specifically, the last three. I’m sure it got you thinking about your personal situation; whether it relates to your current state of health/past disease/financial situation– or perhaps all three.
Thinking this way is totally normal, and again, I get it. In the event you either have a current medical condition or have had one in the past, that does not necessarily mean you are permanently barred from ever having a life insurance policy now, or in the future. There is always hope!
That said, clearly not everyone is going to be considered the “perfect specimen” in the world-of-life-insurance – and that’s OK! All it really means is that dependent on your health/family history, etc., your premiums will be more expensive than the average “standard” person out there. Not to worry, as I’ll be getting more in-depth about what “rated-policies” are in the future, and it’s not nearly as bad as it sounds!
The point is to know the type of life insurance you are purchasing, ask a lot of questions, don’t feel rushed into making a decision, and if something doesn’t feel right — wait until it does!
If you’re ready to get financially organized or take your finances to the next level, I’m happy to schedule a consultation with you. Click here to learn more about my financial consultation services. Together, we will help you get control of your finances so that they won’t control you!