A recent row with a web publisher got me to thinking about this. They all but accused me of being a spammer for including just two links in an article I submitted. Those two links were at the end of the article, in this single paragraph.
Learn more about protecting your and your family in my new book “Life Insurance “Dirty Little Secrets” for Consumers Revealed!”. Even if you already have life insurance, there are things you should know. For those still unprotected, this slim volume answers those questions that keep most people from securing a solid, affordable policy. You’ll learn what to look for in an insurance company and a good policy to provide financial security for you and your family. Rather than being “sold” a policy, “Life Insurance “Dirty Little Secrets” for Consumers Revealed!” empowers you to seek out and secure the coverage that best works for you.
We can debate whether two links to the same page were over the top. I won’t go the mat on this one. I’d rather remove one of the links than fuss too much about it. It detracts from what I feel should be a far more important issue.
How People Usually End Up with Life Insurance
When I say “end up with life insurance”, I’m talking about a policy someone agrees to pay for rather than “workplace insurance”. Far too many people stand pat on the false sense of security by this common employment benefit. Don’t get me wrong – workplace insurance is an excellent benefit. By all means, feel free to appreciate it, but also realize that, when the employment ends, the life insurance ends – unless you opt to port your coverage (if this is available) and pay the premiums yourself. When it comes to that, you may find this option is not as great as it sounds, but that is another topic.
Strangely enough a scene from an episode in MASH comes to mind. A private is wounded. His entire, total focus is on selling life insurance. What comes to mind is his catch phrase “People don’t plan to fail, they fail to plan.” Ironically, he’s absolutely correct. Where is the irony?
The fact that he says this as he is selling life insurance is rife with irony. Those who bought from him were not planning on buying life insurance, they were sold! From what I understand about that period in history, there is a very good chance, those that bought from someone in this era stood a much better chance of securing a decent policy. Today… not so much. What’s changed?
The life insurance industry has evolved. Surprisingly it has shrunk also. Not too long ago, there were more than twice as many life carriers than there are today. Most carriers sport several policies. With the options (riders) available and the types of policies they offer, consumers have a huge spectrum of products to choose from. The downside is, this means there are loads of opportunities to make bad choices. From what I’ve seen, if the policy reviews I’ve performed are any indication, bad choices proliferate.
Add to the above the mountains of information available. The end result is anybody who wants life insurance has few choices. They can do some research themselves or they can contact one or more sales agents. Note here, a good agent will spend at least an hour and likely more with a prospective insured. It’s safe to say, getting three quotes, in person, will likely blow three evenings. As I posted before, online quotes are all but worthless.
What nearly always happens is people do not buy insurance, they are sold insurance. This typically happens when they meet with an agent, either in person or remotely. The agent qualifies the prospect financially and medically, then presents what the agent sees as the best options. They may present just one or up to three in most cases. If the agent is confident and competent, the prospect will become a client. What is wrong with this? Several things.
First, the main focus is the prospect where the entire family should be considered. Granted the prospect may well be the primary wage earner but how would losing another member of the family affect the family’s financial picture? In most case such a loss would be a severe blow added to the already severe psychological impact of the loss. A strong argument can be made for providing enough of a death benefit to allow for some breathing room for the family. Sure, work can be an effective catharsis but how much better would this be if work were a choice rather than a must?
Second, during a sales presentation, emotions can run high. In such a state budget issues often take a back seat. The end result can be an obligation far exceeding the ability to meet it, especially should hard times fall. A better approach is to decide on a budget first, one reasonable enough to enable a family to maintain their insurance even when weathering rough spots.
To take this approach, life insurance should be bought rather than sold. While the issue can arise from any member, the decision should be a family decision and include all members who can contribute to the discussion. From here the process is simplified.
Once the family agrees on the need for protection, a reasonable budget figure is agreed on. In addition, the basic goals should also be within the consensus. For instance, I recommend the priority should be to secure a base amount to cover burial expenses first for every member of the family. The family should decide whether to consider a children’s rider on an adult policy or stand-alone children’s policies. (My research indicates stand-alone polices are actually more cost effective.)
Budget consideration will play a large part in how much coverage a family can afford. A final decision may not be viable until solid quotes are in hand. To obtain those quotes, one or more family members should do some research to find suitable insurance companies offering appropriate policies. I always advocate for mutual insurers that consistently pay top dividends offering basic “plain Jane” policies. This type of policy was far more common decades ago so there was an excellent chance someone who bought a policy from an agent like that private in MASH snagged a policy that paid dividends and built cash value.
Narrowing the field down to this level simplifies the process significantly. Once the appropriate policies are determined, quotes can be sought. In a nutshell, this is how insurance is bought, rather than sold.
Learn more about protecting your and your family in my new book “Life Insurance “Dirty Little Secrets” for Consumers Revealed!”. Even if you already have life insurance, there are things you should know. For those still unprotected, this slim volume answers those questions that keep most people from securing a solid, affordable policy. You’ll learn what to look for in an insurance company and a good policy to provide financial security for you and your family. Rather than being “sold” a policy, “Life Insurance “Dirty Little Secrets” for Consumers Revealed!” empowers you to seek out and secure the coverage that best works for you.
