Life Insurance AWARENESS
I woke up this morning upset about a conversation I had with my Renters Insurance client yesterday. It was not the client that upset me but rather the situation that she is currently in. This client was referred to me by my husband, as she is High School classmate. So she is around my husband’s age…approaching the big 5-0!!! She had contacted me last week to discuss alternative Life Insurance options. After discussing what her ultimate goal was and how she wanted to be protected, I asked her to send me the current policy that she has so I can see if she is already in a good position, thus not requiring her to spend anymore money.
On Sunday, I received texted pictures of her policy and at first glance I was impressed. She had coverage at $150,000 for over 45 Years!!! And she was only paying about $65.00/month for this Term Policy. I was going to tell her to stick with this policy for sure and maybe add another one so she would have more coverage in the short term, as I often advise my clients to have higher death benefits during their earning years and as they have established retirement funds, paid off their homes, and gotten children through college they are fine with lower death benefits if they chose and/or budget requires. But then I saw it…there it was in small print a disclaimer that the premium she was paying was set only for the first 15 years. I became a bit concerned and just advised her to find the “premium schedule” page, as this suggested that it will ultimately go up. Needless to say she was not aware of the change and when she found that page in her policy contract…she was very upset! But she was mostly saddened by the fact that this was not disclosed and the policy was sold to her by a family friend. I am definitely a strong proponent of having life insurance and some is always better than none. So if this was all she could get, I would have advised her to keep it as long as she could.
But when she sent me the premium schedule, I soon realized that this policy was not designed to really protect the client, but rather the insurance company. While the death benefit remains the same after 15 years, my client will be 63y (close to retirement age) and she will all of a sudden receive a monthly bill of $252.94, when she is 68y it will be $357.11, at 70y $408 and it then steadily increases each year resulting in a MONTHLY payment of $1,075 at 80y and $2,037 at 87y. So in the years when a client is retired, on a fixed income, and most likely to pass away the premiums become too expensive to carry. This absolutely infuriates me and makes me sick to my stomach. A life insurance policy is supposed to give you a piece of mind, NOT a false sense of security. I know for a fact that there are MANY policies out there that actually provide great protection in the event the worst happens to a family. It is a matter of knowing what you are buying, asking the important questions and trusting the insurance agent you are getting advice from. Then remember that old saying “trust then verify”, it absolutely applies here too!!!
The month of September is Life Insurance Awareness Month, so your Facebook Timelines will be filled with Life Insurance Agents trying to bring awareness to all their Friends and Family about the importance of Life insurance and protecting your loved ones. If you have someone you trust posting about life insurance, please contact them. Ask them these questions:
1. How much should I have?
2. What should my long term and short term life insurance plan be?
3. If you have children, ask them to refer you to a great Living Trust Attorney.
4. When they propose a plan and policy, ask what the premium will be long term, what is guaranteed and what is not.
5. When they deliver the policy to you, sit down and review it with them to make sure everything is as you discussed.
6. If you already have a policy, go find it and ask them to review it with you!!!
And if I am your trusted person, call me to make an appointment. I will come to you, you can come to my office and/or we can discuss via phone.
