18 June 2013 0 Comments

The Real Power Of Life Insurance

real benefitsWhen I started selling life insurance 50+ years ago I knew little about the product.  I had never planned to sell life insurance, but I was out of a job, having a tough time finding another position in my chosen field and was offered a guarantee of $500 a month—so—I figured I’d give it a try.  I needed the money!

I was given a three ring binder that contained all the information I needed to become a success… so I was told.  I consumed the information in that binder.  Life insurance was much more than I had ever thought it was.  One of the sales tracks I had to learn was called “You’ll Earn a Fortune.”  It discussed how, during a lifetime of work, most people would earn a fortune—as much as $1,000,000!  But, people who didn’t plan still end up with nothing.  A graphic I was to use showed the image of a dejected old man sitting on a dilapidated suitcase at the end of a pier watching a cruise ship sail away without him.  The caption was “He didn’t plan to fail.  He just failed to plan.  Don’t let the ship sail without you.

Now, as true as this statement might be, I soon determined that there was much more to life insurance other than this old man who missed the boat.  There were many ways to save for retirement, but there was only one way to provide for a family in the event of early death.  As I started to contact all my fellow UCLA graduates the one thing that my product had going for it that none other did was that it would immediately create an estate—before you earned it.  The cash value of any policies I sold became secondary to the importance of the protection provided for the spouse and children left behind as the result of an early death.

I was not married at the time and had no children, but I saw what was most important to my prospects who did have families.  So, I changed my approach and talked about supplementing the Survivor Benefits provided by Social Security, instead of the Retirement Benefits.  I found that people wanted to know how to care for their families.

The real power of life insurance is how those who care can add enough to government programs and employer-provided benefits to make a real difference…how a few dollars a month can assure dependent kids and the spouses left to care for them with enough additional money to guarantee financial security rather than minimum subsistence.   That’s the real power of life insurance!

Life Insurance can be a supplement to retirement with some unique tax advantages as I’ve discussed in previous entries, but creating an instant estate for the benefit of families is of the greatest importance.  Term insurance does not produce cash values, but it does produce the maximum protection and that should come first for young families!

Next…some comparisons of life insurance costs.

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