25 Reasons to Love Life Insurance - Insurance Selling mag

Brian Anderson

Executive Editor
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OK, could definitely use some help here! September is Life Insurance Awareness Month, and the upcoming third issue of Insurance Selling magazine will focus on that as a main theme. One component of our coverage is a piece tentatively titled "25 Reasons to Love Life Insurance" - which is loosely based on something People magazine did at Fourth of July when they did a "100 Reasons to Love America."

While it's pretty easy to cover the basic/traditional reasons - protect loved ones, pay off mortgage, part of sound financial plan, surprisingly affordable, pays out quickly, tax advantages, living benefits, etc. - what I’m hoping Forum members can contribute are some more specific or unconventional reasons why people should love life insurance. Can be actual (but briefly described) case studies/examples of how coverage helped families; maybe some unusual cases or uses you have come across? Or even your own take on some of the more conventional reasons people love life insurance.

Please share examples you can think of on this thread, and if you would like we can credit you (by real name and city/state) as the source of the "reason" in the article in the September issue. Might even use your image if you email me a hi-res picture. In addition to helping with the magazine piece, hope it will make an interesting thread here on its own as well.

If you haven't seen the magazine yet, here's a link to the second (June) issue:

https://insurancesellingmag.com/wp-content/uploads/2018/06/IS_Issue-2-2018_-LR.pdf

Thanks for your help with this and feel free to PM me if you want more info.
-Brian Anderson
Editor
Insurance Forums
Insurance Selling Magazine
 
One of my favorite reasons to 'love' life insurance is that policies can now come with living benefit riders, that a person may be able to use due to a chronic, critical, or terminal illness. Hopefully that doesn't happen, but knowing I could access my life insurance policy to help run my business, or cover medical expenses is a nice feeling.
 
@Brian Anderson - you know how to credit me. :)

1) Life insurance loans and payments are NOT reported to credit bureaus!
This allows the "debt" to be hidden and improve your debt to income ratios whenever you are applying for loans. This also helps should you be unemployed for a period of time that your life insurance loans and payments (or lack of payments) won't affect your ability to get your next job. Many jobs do credit checks and being on-time on all your payments certainly helps to secure the next job. In short, in the event of unemployment, cash value life insurance buys you time. Also, unlike with qualified retirement plans, there are no limits to the number or the size of the loans you can take out against a life policy (unlike a 401(k) with a $50,000 maximum size loan regardless of your balance). Of course, if you became unemployed with a 401(k) loan, you still have to pay it back by October of the following year under Trump's new tax plan... but if you can't pay it back, it's taxes and penalties.

2) In the event you become disabled and cannot work, premiums can be made for you - including cash contributions - if you have the Disability Waiver of Premium rider. This helps your plan to continue forward, even if you can't earn the money yourself to contribute to the plan.

3) If using life insurance loans in retirement as an income source, this cash flow is not only tax-free, but it doesn't affect your social security retirement benefits from taxation (taxable income limits haven't changed since 1993, but inflation certainly has. I believe more and more people will have their benefits included in their taxable income). In addition, cash flow from life insurance will not be included in Obamacare Medicare IRMAA limits. And your asset can continue to grow while you take out loans against it. Plus, to avoid a phantom income tax, many policies have overloan protection riders that keep the policy inforce to prevent a large tax-bill.
 
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Off to a great start here - thanks guys
1) It is a full cup of milk... A story I heard when I first started concerned a mother who had her two little boys in the ER because one of them had a bad cut... As the Dr. treated the injured brother, the nurse gave the one in the waiting room a carton of milk. He drank half of it but no matter how much the nurse urged he would not drink the rest. When the mother came out to the waiting room, the nurse told her that she had tried to get him to drink all of the milks but he wouldn't.. The mother explained that their father had died a few months earlier and that money was really tight at their house. So much so, that she often did not have enough money for groceries.. including milk. The little boy had developed the habit that he always saved half of what he got for his little brother.

2) it allows family to live in their own world with dignity.
 
Sure pays when you die. However, also protects future insurability, Pays as you are dying, and can even pay itself.

A couple examples:

Conversions and purchase options -

Years ago I AOR'd an orphan 'to age 25 term' $20,000 policy. The parents had taken it out on their son when he was a child. In his late teens he OD'd and went into a permanent vegetative state. The mother and father divorced over the tremendous amount of work and stress. The mother left. The father lost his job and became the full time caregiver. At age 25 I help the father convert the $20,000 to 6 times the face, $120,000. This young man died a year later. Conversion, so no contestability period.

This week we are exercising the last GPO on a Whole Life policy with WP for a young man the is now completely uninsurable outside a guaranteed issue policy. Which would be tough due to his young age. I believe this is his 5th and final option. This was a person that asked for help on this forum years ago.

Last year I converted another $20,000 child rider on another 25 year old that is in a vegetative state. 5 times the face to $100,000.

Just converted another child rider to 5 times face. A deployed combat Marine.

ABR -

I got a call that a client needed to surrender their policy. After speaking with them I find that the husband has terminal liver cancer and they were going into foreclosure. I explain the ABR, They borrowed enough money to hold off the foreclosure until the company sent them the $100,000.

Another client calls me to borrow some money from his policy. I find out his wife has inoperable brain cancer. She is terminal. He has used all of his vacation time as well as all the time his coworkers donated. He has to go back to work to pay the bills. He was going to borrow from the policy to pay the daughter to care for mom as she died. Daughter was going to quit her job but also has bills to pay. We sent him $30,000. That kept them good until she died. Dying can be expensive

Waiver of premium -

Cadillac mechanic - Diabetic blindness. Union Pipefitter - Back injury. Graphic Editor (Power Rangers) - MS.

Newer agents will find these stories a little far fetched. agents that have been doing this a while will have similar stories.
 
I have been diagnosed and treated for cancer twice.
Both times I thought I was going to die.
I can tell you what did not go through my mind.
Cash Value
Premium Offset
Dividends
The only thing that concerned me was the death benefit and would my family be ok.
So all this stuff is great but to me the number one benefit is that when i was looking at crunchtime....I took care of my loved ones.
Everything else came in second.
Now I am ten years cancer free and I get to look at all these other benefits.
Everybody ( me too) loves the cash values, tax deferred growth and all that other stuff but having a db no matter what age you die to me is number 1.
 
There are no consumers who "love" life insurance.

The people who probably appreciate it the most are the beneficiaries who get that check at a very dark time in their life, after they have lost a loved one. But most would trade the check to have their loved one back (unless it was a family member suffering from a dreadful disease).

Life insurance is a "grudge sale/purchase". No one wants to buy it, except those who have a very serious health condition from which they will die. They are now too late except for overpriced GI products; and they better hang on for another 2 or 3 years.

It's the hardest financial product to sell.

Because no one wants to buy it, and because it is hard to sell, companies have to pay enormous commissions (compared to anything else) to have an agent sell the product. Most people who enter the business and try to sell life insurance fail, because it isn't easy.

In the end it is the successful agent who loves the product. When that agent makes the sale it's a great payday. And the consumer, who doesn't love the product, will have a beneficiary who is in much better financial shape because that agent succeeded.
 
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