An estate planning attorney introduced me to a client of his who was the trustee of her parent’s irrevocable trust that owned a $4 million dollar second-to-die policy. As is typical in these scenarios, the trustee understood very little about the insurance and her father was the one “in charge” of the policy over the years but he didn’t under-stood it much better.
To anyone who does something every day, it may be bewildering that their respective specialty is so entirely misunderstood by others. So it is with life insurance. I understand it can be a mystery to many, and in some ways it is ridiculously complicated, but I am often reminded that I can take nothing for granted when working with consumers.
This case was as typical as an engagement can be. The $4,000,000 in death benefit was not projected to last as long and Mom & Dad were expected to last and they wanted and needed guidance. For full post, click here…
The real-life effects of making certain money-saving changes to your policy.
My last piece was about life insurance and pricing and hopefully left people thinking that cheaper isn’t always better. I want to expand on that. We’ll keep looking at the 50-year-old preferred non-smoking male and a $1 million indexed universal life policy run with $7,842, $8,115 and $11,360 premiums.
The Conundrum: A tiny additional bit of premium can hypothetically reduce policy expenses dramatically and subsequently allow the policy to last longer and be less susceptible to market forces. However, the lower funded policies may have a hard time actually staying alive longer than the insured individual, even if the sales ledgers suggests otherwise. For full post, click here…
Remember that cost and price are very different things.
Certainly, almost every industry deals with the same thing but the idea of saving a buck on insurance is an entrenched ideal. Independent agents who can bring multiple offerings from various insurance carriers are exceedingly valuable but only if they understand what they’re doing and aren’t playing the spreadsheet game.
Penny wise and pound foolish is an age old axiom but just because it’s been around for a long time doesn’t mean lessons are learned. For full post, click here…
At this point, I should really stop being surprised that consumers tend to focus more on issues that aren’t particularly consequential and often ignore the most important matters. This has been reinforced recently on a few engagements.
One of these issues is underwriting, maybe the least favorite part of the life insurance process. While it’s important to do business with a strong carrier—and no one wants to pay more for something than necessary—the details of the underwriting process are a mystery to most. For full post, click here…
