Life Insurance - Not A Do It Yourself Project
“If you can’t send it to me in the mail, I don’t need it.” Those were the words I heard from 62 year old about to lose his group term life insurance. He knows he needs to get life insurance, but doesn’t want to take the time to talk to a real person.
The gentleman isn’t alone. Nor is he the only person who will probably buy something he doesn’t fully understand and then blame the company later on.
It is partly the company’s fault, after all. Companies know that it is human nature to pay the most attention to the simplest elements of something—to the parts that are clear and easy to understand and to simply block out the rest. It’s pretty easy to get away with flashing a deceptively low premium on a glossy sheet of paper and explaining the not so attractive features in small print and confusing jargon on the back or, worse yet, on a plain sheet inserted in the envelope. Too many people buy based on the pretty stuff and completely miss the things they most need to know. Nevertheless, if the information is in there, it’s legal. You can beat them at their own game by simply having a qualified and caring agent explain what you are getting.
Most people know they need life insurance, but haven’t spent five minutes thinking about what they will actually need to do with it. They know whether they are still paying a mortgage, and they know the approximate cost of a funeral. Beyond that, the average person has no conception that life insurance gives a way for heirs to pay taxes on an estate, supports a family or spouse who must learn to survive on half the former income, pays off unexpected bills such as credit card bills, car or house repairs, or a million other things. Even people who have their homes paid for and no longer use credit cards very rarely die completely debt free. If a person has been ill, there will be outstanding doctor and hospital bills. Someone who dies unexpectedly in an accident will leave bills associated with daily living. The correctly designed life insurance plan can accommodate all that. Life insurance shows someone else that you cared enough about them to avoid leaving them with your responsibilities.
However, the intricacies of a life insurance policy are often concealed in perfectly legal jargon—it just happens to be language the average person doesn’t understand. For example, by far the majority of mail order offerings of life insurance are either for term, for a graded benefit (a policy with a waiting period), or for modified whole life (which has a level benefit but a premium that gets adjusted periodically. For some people, and in some circumstances, a term policy is the ideal choice. Most people, however, who truly understand what life insurance can do, want to have something to show for 20 years of premium. They want either a Whole Life or a Universal.
When you work with a licensed and sensitive agent—one who will take the time to figure out exactly what you need and what you can afford—you will be much more likely to purchase something that will take care of you for life. An agent who is worth the price of a good suit will not simply shove something at you in order to get you to put your name on the application. She will analyze your situation, explain the different life insurance options available, and make sure you understand your options. She will explain any fine print, letting you know about riders that may be included for free or for a price, about options to increase or decrease your policy or convert it to an annuity at a later date, and about the importance of a policy that builds a cash value. Most likely, you would not completely understand even the three basic life insurance choices without someone who can interpret the insurance language.
Life insurance is an important decision and one that many people in their 30s and 40s are putting off—much to their own harm. It’s worth spending a couple hours with a real person to know you have something you won’t be trying to fix in a few years when your age and health may be against you.
Karen Ruff, D.A. is a freelance writer and insurance agent for a 128 year old nationwide company. Licensed in South Carolina, she specializes in life insurance, is certified in long term care and also provides cancer insurance and alternatives for protecting senior savings and investments
Dr. Ruff is the owner of a quarterly newsletter “Senior Sword” which is available in print or as a PDF email attachment. For additional information, email silverscribler@aol.com
Tags: agents, benefits, life, life insurance, modified life, protection, term whole life, universal life
