I work in the life insurance industry and I am passionate about educating others about it. For many, life insurance is not the most appealing thing to talk about—go figure. And it’s never too early to plan ahead. Here’s what I recently wrote to my best friend.
Carol,
I am writing you this because:
You are my best friend and,
I will never forgive myself if something were to happen to you and I didn’t educate you about the importance of life insurance.
My entire family works in this industry and strives to help people see the importance of life insurance. Working in the life insurance industry, every day I talk to people about how important it is to protect the ones we care about. If you wanted to give me financial advice, I would listen because you work in finance and you know what you are talking about. I know what I am talking about, so please read this. I believe in life insurance for the protection it provides and because it can help you set a solid foundation for your financial future. I know you aren’t passionate about life insurance. I know you have other things you want to buy. But regardless of what life insurance you have at work, it’s important to have your own policy. Your work benefits may be great, but with the amount of job changing our generation does, and the fact that you specifically never stay in one place long, it is important to have your own life insurance coverage outside of work. That way you can take it with you, wherever you go. Your good health is an asset—All too often I talk to people who call in at 70 with health issues and want life insurance for a low price but they waited too long. Life insurance isn’t bought only with money, it is also bought with health. We will never be healthier than we are now. If you put it off until you’re older, the cost of insurance can become very expensive. I have a term life insurance policy for a million dollars of coverage. It costs $21.56 a month. That is barely two drinks a month in NYC—am I right? Plan for the unexpected—Yes, it’s easier and more affordable to get life insurance when you are young and healthy. But there are also benefits to having it in place in the event you get ill. With life insurance that has living benefits you could accelerate your policy to help pay for medical treatments, bills or other expenses.1 But that’s a worst case scenario, and hopefully you’ll stay healthy and you won’t need to pay for medical treatments. If that’s the case you still will have your life insurance coverage and you bought it at an affordable rate. It’s all about flexibility—Life changes fast. I expect in the next 8 years you will want to get married and have kids. If you get a term life insurance policy now, at your current health status, you can convert it to a permanent life insurance policy at your current healthy status down the road. Also, with a permanent life insurance policy there is cash value that grows over time. The better you fund the policy, the more options you have to use that cash value down the road. For example, at retirement you could access the cash value through loans and withdrawals to supplement your income.2 Or, you might access it earlier to pay off a house, use it as an emergency fund, whatever you want. Plus you have the living benefits in case you get sick. You are buying flexibility. You pay your renter’s insurance, you pay your rent. Why not pay for life insurance. It is an asset. It is important. Life insurance can be the foundation for your financial future. I am writing this to try to protect my best friend. If after reading this you still don’t think taking the time to talk to a financial professional is worth it, then let’s talk. But I have one question: If I lived in NYC would you buy me two drinks a month? Life insurance is not a gamble. This is something you should have for the rest of your life to protect the ones you love. I’m taking the time to write this simply because I love you. Jess This post was originally published in 2017. We thought it was worth re-sharing. 1.Living Benefits are provided by no additional premium Accelerated Benefit Riders, that allow you access the death benefit of the policy while you are living in the event of a qualifying illness or injury. Payment of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy. Receipt of Accelerated Benefits may be a taxable event, may affect your eligibility for public assistance programs, and may reduce or eliminate other policy and rider benefits. Please consult your personal tax advisor to determine the tax status of any benefits paid under this rider and with social service agencies concerning how receipt of such a payment will affect you. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional, may require additional premium and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy. 2. The ability of a life insurance contract to accumulate sufficient cash value to help pay expenses or meet accumulation goals will be dependent upon the amount of extra premium paid into the policy, and the performance of the policy, and is not guaranteed. Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event. If remaining policy values and scheduled premiums are insufficient, additional out-of-pocket payments may be needed to keep the policy in force. Surrender charges may reduce the policy’s cash value in early years.
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