The 30 day war!
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You either have poor clients or you are doing them a disservice. Do your clients want their families to just get by or do they want them to thrive? I'm guessing that you don't have kids. Nobody wants their family to struggle. You will have clients who die prematurely. For a few extra dollars, they wouldn't have to struggle.Here’s a fun fact about me: I’ve never sold a policy of over $1,000,000. Only twice have I recommended anything over $1,000,000 to a client. I personally think that if one of my clients died, the spouse/children/heirs would get by on a million bucks. They don’t need to pay the mortgage off right away, they don’t need to max fund retirement right away. I think they’ll get by. My thing is, I can see how having that additional insurance would reduce ALL of the burden that a family does not need, but will face, at a difficult time like that. The last thing a new widow/widower needs is to all of a sudden be stuck w/a $750,000 mortgage, two kids and $100,000 less income coming into the house. A half million bucks isn’t going to eliminate that burden. A million bucks may not even be sufficient long term.
This is totally off the topic but would you mind sharing how much life insurance you personally carry and the type, anon? (Just curious, this is not an attempt to insult or anything)
You either have poor clients or you are doing them a disservice. Do your clients want their families to just get by or do they want them to thrive? I'm guessing that you don't have kids. Nobody wants their family to struggle. You will have clients who die prematurely. For a few extra dollars, they wouldn't have to struggle.[/quote] One thing I do quite often actually is recommend them buying life insurance from other places if they need more than they should buy from me. My area of the country is heavily infiltrated with military people, so theres a 60% chance that someone in a client household of mine has the means to open a USAA account, and their term insurance destroys ours. Several of my clients have bought insurance of over $1,000,000 from them. It's not a huge priority of mine to have a client buy insurance through me if its not permanent (Too much of a headache w/underwriting follow-up and very rarely does the process go smoothly), and clients appreciate me outsourcing some of the stuff so they know I'm not out to get ALL the commission. I've had zero complaints about this type of strategy from any of my clients.[quote=3rdyrp2]Here’s a fun fact about me: I’ve never sold a policy of over $1,000,000. Only twice have I recommended anything over $1,000,000 to a client. I personally think that if one of my clients died, the spouse/children/heirs would get by on a million bucks. They don’t need to pay the mortgage off right away, they don’t need to max fund retirement right away. I think they’ll get by. My thing is, I can see how having that additional insurance would reduce ALL of the burden that a family does not need, but will face, at a difficult time like that. The last thing a new widow/widower needs is to all of a sudden be stuck w/a $750,000 mortgage, two kids and $100,000 less income coming into the house. A half million bucks isn’t going to eliminate that burden. A million bucks may not even be sufficient long term.
Every insurance guy I’ve ever met has a horror story of the perfect non-insurance storm. Problem is they are all living to tell it and so are their clients…
I carry several million dollars worth of coverage. (More than $3,000,000 and less than $10,000,000.) I have some whole life. I have some annually renewable term coverage that will ultimately get converted. I have some cheap 20 year level term insurance that will ultimately get dropped.This is totally off the topic but would you mind sharing how much life insurance you personally carry and the type, anon? (Just curious, this is not an attempt to insult or anything)
My dead clients aren't alive to tell about it. Someone's health changing is not a perfect storm. It doesn't take a perfect storm for someone to die. Look at the obits today. Someone with young children will be listed. One of my clients is uninsurable and although he is currently pretty healthy (from a feeling perspective), he has very little chance to live 5 years. His wife recently had a baby. He's very scared about the fact that he won't be able to provide for them. The one thing that most of the people who can't get insurance at decent rates have in common was that in their 20's, they were usually still insurable. We can all agree that insurance is important. When something so important is so inexpensive, it doesn't make lots of sense to not buy it.Every insurance guy I’ve ever met has a horror story of the perfect non-insurance storm. Problem is they are all living to tell it and so are their clients…
What am I missing here? Plenty of companies are less expensive than USAA for term insurance. For any age, for any amount, there are usually 10+ companies that are less expensive than USAA.your right about the USAA thing. Insane cheap. Insane.
Also, are you talking about the insurance for the military spouse? Because SGLI should cover the servicemember, unless they are field grade officer or above.
And if we’re talking veterans VGLI works almost as well.
Maybe slightly off topic, but one of the things I do with couples (this is for non-estate planning life insurance purposes only - IOW income replacement), is have a serious and honest discussion with them about “what would you do if YOU died” and point to the husband, then to the wife, and then to both of them. Since they have usually never ponered this, I talk them through the options. They think 500K is enough. I tell them “OK, YOU have a 150K a year job”, how is 500K going to replace that? “Well, we would pay off our morgtage…and our credit cards…and our cars…and our student loans…”. Well, OK, so that leaves, hmmmm, about 50K in your pocket. You’re a stay at home mom with 2 kids under 10. Are you going to go back to work and make 60K a year? NO? Really? Because that 3000Sq ft house costs something to run. As does the food, the clothes for Johny and Jane, the piano lessons, little league, the 32 birthay parties they go to each year, the private tutor you have for Jane. And oh crap, what about college? Don’t worry, that will only be about 200K for both of them. But hey, at least you have the mortgage paid off.
By now, they are starting to get it. They have built a 250K lifestyle on a 150K income, and now that 150K income is gone. On to the wife. So what do YOU do (pointing to the husband) if she dies? Who watches the kids? Yeah, your boss will understand for a few months. Then it's back to the grind, 11 hour days, business trips to Phoenix and Chicago, 7:30am meetings with the boss's bosses. Man, I hope Johnny and Jane never get sick. Or have a dance recital. Or have soccer practice. Or have teacher conferences. Or have to do homework before bed. Or want to eat breakfast at 8:00 before the bus comes at 8:30 (oh crap, that 7:30am meeting!!). How's that working out for you? A full time nanny or babysitter might be nice. Or maybe a less taxing job. Oh, scientists don't get "less taxing jobs making 150K a year at age 36?" Wow. That stinks. Hmmmm. Scratch my chin. "what to do, what to do." So now they understand why the wife needs life insurance. This is real sh!t. A good acquaintance of ours in town just lost her 36 year-old husband. Freak accident (I'm not joking about this). They have 3 kids under 10. Now she has to go back to work. It's not as extreme as the scenario above, but they are going to be seriously stretched. For life. And an extra, I don't know, $100 a month would have solved all of their (financial) problems for life. Never say never. Prepare for the worst.This is something that I have done when a client says that they have enough insurance when I know that they don’t.
Ex. John makes $100,000 and has $500,000 of life insurance and thinks that his family would be just fine on that amount of money. Me: "John, if I gave you $500,000 and in exchange you could never earn another dime would you accept the money?" John: "No. It's not enough. I'll run out of money." More often, I'll just run them through a little exercise. Me: "Ok, you have $500,000 and you think that will be enough. It might be, but let's take a look to be sure. Since this money needs to last, Sally will need to invest it. What sort of rate of return do you think that she'll get?" (They'll either give a low number or if they give something high, I'll explain how they can really only safely withdraw about 4% of the money.) John: "Maybe 3-4%" Me: "Let's look at 4%. $500,000/ 4%/12 months = $1,666/month. Would your family live in the way that you would like with $1,666/month. John: "No way" Me: "Fortunately, it shouldn't be very expensive to get the insurance coverage that you need." John: "ok"[quote=anonymous]This is something that I have done when a client says that they have enough insurance when I know that they don’t.
Ex. John makes $100,000 and has $500,000 of life insurance and thinks that his family would be just fine on that amount of money. Me: "John, if I gave you $500,000 and in exchange you could never earn another dime would you accept the money?" John: "No. It's not enough. I'll run out of money." More often, I'll just run them through a little exercise. Me: "Ok, you have $500,000 and you think that will be enough. It might be, but let's take a look to be sure. Since this money needs to last, Sally will need to invest it. What sort of rate of return do you think that she'll get?" (They'll either give a low number or if they give something high, I'll explain how they can really only safely withdraw about 4% of the money.) John: "Maybe 3-4%" Me: "Let's look at 4%. $500,000/ 4%/12 months = $1,666/month. Would your family live in the way that you would like with $1,666/month. John: "No way" Me: "Fortunately, it shouldn't be very expensive to get the insurance coverage that you need." John: "ok"[/quote] Does that extra insurance that they'll probably never use cover them when they get to retirement and have not saved enough to travel to see those 2-3 kids and their grandchildren? j/k I think insurance guys will always look at the risk and investment guys will always look at the reward. I try to be both but probably under insure most people in most insurance guys minds. I go 10x take home pay and invest the rest. Perhaps my perspective will change when I have some clients die.I know insurance guys that will scare people about the market and economy to the point that the person buys a huge cash-value LI policy and then they put the rest of their money in fixed annuities. They will often have people cash out their 401k (if they're still working there) and take the hit to buy LI and fixed annuities with the money as well. I think there was someone here that was doing that for a while, his name escapes me though, Bobby it might have been.Every insurance guy I’ve ever met has a horror story of the perfect non-insurance storm. Problem is they are all living to tell it and so are their clients…
30 day war = No work all insurance what if’s is
Anyone at least sold a decent policy this week?
[quote=voltmoie][quote=anonymous]This is something that I have done when a client says that they have enough insurance when I know that they don’t.
Ex. John makes $100,000 and has $500,000 of life insurance and thinks that his family would be just fine on that amount of money. Me: "John, if I gave you $500,000 and in exchange you could never earn another dime would you accept the money?" John: "No. It's not enough. I'll run out of money." More often, I'll just run them through a little exercise. Me: "Ok, you have $500,000 and you think that will be enough. It might be, but let's take a look to be sure. Since this money needs to last, Sally will need to invest it. What sort of rate of return do you think that she'll get?" (They'll either give a low number or if they give something high, I'll explain how they can really only safely withdraw about 4% of the money.) John: "Maybe 3-4%" Me: "Let's look at 4%. $500,000/ 4%/12 months = $1,666/month. Would your family live in the way that you would like with $1,666/month. John: "No way" Me: "Fortunately, it shouldn't be very expensive to get the insurance coverage that you need." John: "ok"[/quote] Does that extra insurance that they'll probably never use cover them when they get to retirement and have not saved enough to travel to see those 2-3 kids and their grandchildren? j/k I think insurance guys will always look at the risk and investment guys will always look at the reward. I try to be both but probably under insure most people in most insurance guys minds. I go 10x take home pay and invest the rest. Perhaps my perspective will change when I have some clients die.[/quote] This kind of anti-insurance argument is so very silly. If the client in the above example is 30 and we increase his insurance from $500,000 to $1,500,000 by having him purchase a 10 year level $1,000,000 term policy, we have raised his insurance premium by $20/month. Is $20/month going to stop him from traveling and doing other things when he's older? Of course not. In fact, he's not going to invest less simply because he has added $20 more to his monthly expenses. Why are you having people purchase 10x their take home pay? Do your job and find out what your client wants to accomplish. Most want their families to maintain their standard of living. 6x take home pay typically won't do this. Ex. John is 30 and is making $100,000. He is married with 2 young kids. He takes home $60,000 and is contributing $6000 to his 401(k) and his employer is putting away $3,000. You have him buy a $600,000 20 year term policy for $270. If he dies today, his wife gets $600,000. Let's assume that John blows $1,000/month on himself. That would put the families need at $4,000/month instead of $5,000, but then they have added health insurance costs and $750/month is no longer being put away pre-tax for retirement. Anyway, how is $600,000 going to be enough to give the family $60,000 of after tax money? Instead of coming up with arguments of why this might be enough, first look at what would happen if they bought 10x gross income instead of 10x net. They would buy $1,000,000 of coverage. The premium would be $400 instead of $270. Why take the chance for a lousy $11/month difference. It's not as if because the insurance is $11/month more expensive, your client is going to change his roth contribution from $5000 down to $4870. Instead what will happen is that it will get eaten up in his budget. At the end of the year, his checking account balance will be $7,354.19 instead of $7,484.19. Trying to save a few dollars on insurance premiums is penny wise and pound foolish.I know insurance guys that will scare people about the market and economy to the point that the person buys a huge cash-value LI policy and then they put the rest of their money in fixed annuities. They will often have people cash out their 401k (if they're still working there) and take the hit to buy LI and fixed annuities with the money as well. I think there was someone here that was doing that for a while, his name escapes me though, Bobby it might have been.[/quote] You know some slime balls. I've never seen anybody cash out their 401(k) early to put the money into a life insurance policy. I've got to call B.S. on this one.[quote=voltmoie]Every insurance guy I’ve ever met has a horror story of the perfect non-insurance storm. Problem is they are all living to tell it and so are their clients…
[quote=voltmoie][quote=anonymous]This is something that I have done when a client says that they have enough insurance when I know that they don’t.
Ex. John makes $100,000 and has $500,000 of life insurance and thinks that his family would be just fine on that amount of money. Me: "John, if I gave you $500,000 and in exchange you could never earn another dime would you accept the money?" John: "No. It's not enough. I'll run out of money." More often, I'll just run them through a little exercise. Me: "Ok, you have $500,000 and you think that will be enough. It might be, but let's take a look to be sure. Since this money needs to last, Sally will need to invest it. What sort of rate of return do you think that she'll get?" (They'll either give a low number or if they give something high, I'll explain how they can really only safely withdraw about 4% of the money.) John: "Maybe 3-4%" Me: "Let's look at 4%. $500,000/ 4%/12 months = $1,666/month. Would your family live in the way that you would like with $1,666/month. John: "No way" Me: "Fortunately, it shouldn't be very expensive to get the insurance coverage that you need." John: "ok"[/quote] Does that extra insurance that they'll probably never use cover them when they get to retirement and have not saved enough to travel to see those 2-3 kids and their grandchildren? j/k I think insurance guys will always look at the risk and investment guys will always look at the reward. I try to be both but probably under insure most people in most insurance guys minds. I go 10x take home pay and invest the rest. Perhaps my perspective will change when I have some clients die.[/quote] You're wrong Volt. Our job is not to make people wealthy...it's to protect their wealth. Yes, part of protecting wealth is growing it. But if spending a hundred or two hundred a month is going to prevent someone from retiring, then they have other problems. Besides, it's all relative...the more money you earn, the more coverage you need, so the more you can afford to buy. Don't be penny wise and pound foolish, and try to wring every last dime of growth out of your assets. 10X isn't bad (not quite enough, but...), but I would look at 10X gross income, since much of the net difference goes to 401K contributions, health care, disability insurance, life insurance, etc. (unless you are simply talking net of taxes but gross of voluntary deductions).I sell insurance, see the value, and find it an easy sell. Use net of taxes, it’s a fair number for most of the people I’ve sold insurance. If my clients die will they be better off than they would have been if I had not knocked on their door, yes. If they don’t die will they be better off as well, hopefully. I can live with myself and they can sleep better at night. Win/Win for both of us. I’ll save the castle and moat building for more affluent clients.
and look here B24 … I’ll bore my clients rich, ok?
I hear you, voltmoie. I just don’t understand with insurance pricing being what it is why you wouldn’t have them buy slightly more when there is a huge upside to doing this if they die prematurely and no downside if they live a long happy life.
Because of the combination of breakpoints and policy fees, getting incrementally more insurance does not cost incrementally more in premium dollars. Do you ever give your client a choice? "Mr. Client, I think you need at least $600,000 of coverage. It will cost $270. If you want to play it safe for your family and get $1,000,000 for your family, it will cost $130 for the extra $400,000 of coverage. Would you prefer $270 fo $600,000 or $400 for $1,000,000." I think that what you'll find is that most of your clients would actually want more coverage if they knew the price differential. This seems like material information that should be disclosed to them.[quote=voltmoie] and look here B24 … I’ll bore my clients rich, ok?
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Nice!