Monday, November 19, 2018

My Stories from the Field - Chapter 7

This is the seventh post in a long sequence where I want to share stories of real people I have met either while working with a life insurance company, or as an independent investment adviser. My goal is to share their stories so I can impart the lessons I learned in the hopes that these lessons will also serve others - this is for you, my readers!
*All my subjects will be either John or Mary, for privacy reasons.

We have been talking about situations where people had to come up with money to bury loved ones who didn't have life insurance, as well as instances when I met people who had left behind policies for the family. This time I would like to share 2 situations that come to mind as examples of people who had coverage in place when I met them but it was not the right type of coverage for their needs.

Before sharing their stories, I would like to take a moment to state that I don't advocate for permanent insurance instead of term, any more than I preach for term insurance instead of permanent. I believe that each situation is unique and therefore each person will need something a little different from the next. Rarely are there situations, when it comes to life insurance, where one size fits many - and never all. This is why I always recommend a talk with a licensed professional who can assess the situation and provide a tailored solution that best fits the family's circumstances.

I met John and Mary late one evening while I was in the field, working with life insurance company. They had policies on their grandchildren with the company where I worked - and this is why I met them. During our conversation, they said they were covered through a different company for an amount that they felt was good for them. This was good news for their family. I offered to take a look at their policies, so they would know what they have - usually the average person is not 100% sure of the type of life insurance, and many times they don't even know the exact amount.

Once I saw their policies, I had to tell them that their coverage would become too expensive (to the amount of many hundreds a month that they would not be able to pay over a long period of time). Plus the monthly payment would be higher every year. Mary started crying when she saw the numbers, because they were in their late 50's and John was the only one with an income. By mid-60's this family would have lost their life insurance because the policies they had would become too expensive for their budget. 

This turned into a moment that made me appreciate the position I was in, to be able to help middle-class families have the protection their loved ones need. It was one moment out of many but still over 10 years later, I remember it with a mix of happiness, satisfaction and pride, as well as gratitude for the opportunity I had.

The second situation that I want to share here is Mary's story. She had just turned 50 at the time we met and shared excitedly that she had joined AARP. One of the benefits they offered her was a life insurance policy for a good price - her perception - and she had taken advantage of the offer. We reviewed her policy together and she learned that every 5 years she would have to pay more, with coverage ending at age 85. This is not necessarily a bad thing in and of itself, and this policy can be good for certain situations. Mary's approaching retirement meant that she would lose the policy before 85 due to premiums too high to be affordable for a single woman living off social security and a little pension. Being able to get her into a better place for protection made me appreciate more the opportunity I had, and also reaffirm the responsibility that came with it.

Please remember this:
Having insurance to protect your family is better than having no insurance. The best kind of life insurance is the one that fits your needs. Nothing is set in stone, therefore it can and should be updated periodically, to keep up with what you need. 

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