Posts Tagged ‘Education’

Vote for Life Insurance

Posted: August 31, 2012 in By Patrick Bet-David
Tags: , , , , , , , , , , , , , ,
0

By Patrick Bet-David, Author of The Next Perfect Storm

We have hired a team of actuaries, underwriters and scientists from some of the most well known universities in America to conduct a study on the need for life insurance. After years of intense research, the task force collective came up with a conclusion: 100% of us WILL die, therefore we ALL need life insurance.

All jokes aside, every year in September we celebrate Life Insurance Awareness Month. This year has been one of the best years with agents from competing companies coming together to show the importance of insurance for American families.

With the presidential election only a few weeks away, I wanted to take a different approach to life insurance awareness. The goal is to have one of our major political leaders, from our current President, to republican candidate Mitt Romney, their Vice Presidents, or other influential political leaders, to recognize the role the insurance industry plays in the US economy. Life Insurance agents serve our nation in a similar fashion to how our military does in protecting our great nation. Very little attention is given to both honorable professions during the good times, but we see the important role they play when crisis hits.

Here are 10 key areas in the life insurance industry that I would to like draw attention to: 

1. The Need for More Life Insurance Agents

This is my first point because with a record breaking high of 35 million uninsured households in America, the industry needs to attract new agents. According to LIMRA, “six in ten consumers don’t recall being approached to buy life insurance in the last two years.” A reason for this is because we no longer have as many agents as we once use to have. In a Wall Street Journal article, it showed that the total number of licensed agents from 1974 to today has declined from over 500,000 agents to only 174,000. Furthermore, the average age of an agent is 56 years old and therefore they are on their way out of the industry. This is one of the main reasons why I decided to write a book called “The Next Perfect Storm” to illustrate how 5 current conditions have combined to create the best timing to get involved in the insurance industry.

2.       How the Life Insurance Industry Affects U.S. Unemployment

With unemployment rates being one of the hot topics during our presidential election campaigns, I wanted to offer another viewpoint on unemployment in regards to the life insurance industry. According to the U.S. Bureau of Labor Statistics, the insurance industry currently employs 5.7 million people, which makes it 3.7% of our total work force in America. Therefore, without the life insurance industry our current unemployment rate of 8.3% would actually be 12%. The impact the industry has on our economy is a message that is rarely told. I’m curious to see if our political leaders fully understand the important role a life insurance agent plays. Everyone in America is directly or indirectly protected from tragedies because of what many heroic agents in the industry do.

3.    Annuities and Retirement

Another hot talking point during the electoral debates revolves around retirement for seniors and the 76 million baby boomers. Does Social Security replace an individuals income for a retiree to live comfortably? According to the Social Security website, ”The program was designed to only replace about 40% of an average wage earner’s income after retiring, and most financial advisors say retirees will need 70% or more of pre-retirement earnings to live comfortably. Therefore, to have a comfortable retirement, Americans need more than just Social Security. They need private pensions, savings and investments.” So the real question is, where does the other 30% of income come from? With most private pension plans disappearing, retirees are looking elsewhere for alternatives. Annuities are one of the vehicles that many retirees are turning to. One in five (19%) retirees receive income from individually purchased annuities. Of these retirees, 37% receive regular monthly payments guaranteed for life.  What most people do not know is that Social Security pays about $1.9 billion every day while the life insurance industry pays out on average of $1.4 billion every day. (ACLI)

4.       Continuing Education:

Consumers’ lack of knowledge about life insurance is keeping some shoppers from buying. 12% cannot decide what type or how much to buy, while 10% are afraid to make the wrong decision, and 8% admit to not knowing enough about life insurance. Life Insurance Awareness Month is not only about spreading the importance of life insurance but as agents and employees of the life insurance industry, we need to educate everyone, starting with our own friends and family. Although consumer education is important, having a life insurance agent who is well informed about the products the industry has to offer will take all the guessing out of buying life insurance.

5.       The Life Insurance Formula

As a consumer who may not have a life insurance agent or may be hesitant to buy insurance today, you still want to determine how much life insurance you really need. Well, there is a simple formula for that that we like to call DIME. And to simplify it even further, let’s use an example of Bob & Mary Jones to illustrate the formula in action.

How much life insurance does Bob need?

Financial information:

1. Income: $60,000 a year

2. Debt: $20,000 of credit card & auto loan

3. Mortgage: $200,000

4. Education: $200,000 for 2 daughters ages 4 & 6

Formula: DIME

Debt ($20,000)

+

Income ($60,000) X number of years for Mary to replace Bob’s income (8 years) = $480,000

+

Mortgage ($200,000)

+

Education ($200,000)

=

Total of $900,000

The DIME method is the most simple and effective way to determine your life insurance needs.

6.     Time to go Shopping

41% of life insurance shoppers said life events – getting married, having or adopting a child, or buying a home – prompted them to shop for life insurance. Although these are great times to buy life insurance, I can’t help but think about the number of young children who are forced to drop out of playing organized sports in school to help support the family by getting a job due to a loss of the breadwinner. More specifically, the story of Lamar Odom comes to mind on how fortunate he was to have the opportunity to continue his dream of making it to the NBA after a sudden loss of his mother, simply because his mother had a life insurance policy that kept Lamar in school. The Life Foundation created a video to tell Lamar’s inspiring story. There is really never a perfect time to buy life insurance because no one has yet found the technology to predict the day we, or a loved one, meet our maker.

7.       Life Insurance is on Sale

Interestingly, a recent LIMRA/LIFE study found that consumers overestimate the cost of life insurance by as much as three-fold. Most consumers think that life insurance is increasingly expensive, but the reality is actually the complete opposite. Life insurance is cheaper than it has ever been in the history of life insurance due to longer life expectancy. The cost of life insurance is based on life expectancy, meaning the longer you and I live lowers the cost of life insurance. LIMRA also found that, like others, the main reason Hispanics do not purchase more life insurance, is because it is too expensive (64%). Take advantage of the sale by meeting with an insurance agent.

8.    Some of the Biggest Advocates for Life Insurance are Women

Seven in ten women agree that life insurance is a necessity and all people should have it. While only 62% of men believe this to be true. It seems that most men providing for their families, don’t spend the time to sit down and discuss the importance of life insurance with an agent. While mothers on the other hand, including working wives, seem to understand that life is about calling “time outs” to take time to do the important things instead of procrastinating. One-third of wives own no life insurance at all – despite the fact that 7 in 10 households are dual-income households, and nearly 30% of wives earn more than their husbands.

9. Life Insurance Decreases Taxes

Taxes are another topic that presidential candidates always debate over. My argument here is that life insurance indirectly prevents taxes from going up. Imagine a homemaker raising three children, experiences a sudden loss of her husband who is the only income earner.  Now picture the husband not having a life insurance policy in place with only $20,000 in total savings.  How quickly do you think the mourning wife will go through that $20,000? Funeral expenses, burial, mortgage, day care, car payment, credit card debt, car insurance, food, clothing, schooling, utilities, etc. Now the wife needs to figure out how quickly can she replace that income. These are all issues that come up with a loss of a breadwinner in a family. But where does she go from here? Government assistance programs? Who pays for that? You and I do through taxes. What happens to taxes if this case is multiplied by thousands of similar cases?  The burden is left on us – taxpayers.  So instead of increasing taxes to support more government assistance programs, we need to increase awareness about the importance of families protecting themselves against a loss.

10. The Silent Flag Carrier of the U.S. Economy

Did you know that life insurers have $4.5 trillion invested in the U.S. economy, making it one of the largest sources of capital in the nation? How often do we hear about this fact? To put this in perspective that would be the equivalent of 300 million Americans (approximate population) invested $15,000 per person in to the economy. And that’s just the beginning. The life insurance industry is still on the cusp of a boom, or as I like to call it, The Next Perfect Storm.

We need your help to create awareness.  With the presidential election going on I would like to create an initiative to hear some of our politicians and presidential nominees recognize what the life insurance industry has done for our country and economy. Lets create a trend on Twitter & Facebook with this blog by reposting it to any of our leaders that you may admire on either side of the party. Left or right, Democrat or Republican, Liberal of Conservative. Lets get our leaders to recognize Life Insurance Awareness Month.

On Twitter, use: #Vote4LIAM #LifeAware #TheNextPerfectStorm


Here are some key political leaders on twitter: @paulryanvp @mittromney @senjohnmccain @ericantor @johnboehner @GOP @karlrove @foxnews @barackobama @michelleobama @marcorubio @repronpaul @clintontweet  @ricksantorum @glennbeck @seanhannity @andersoncooper @cnn @nytimes @reuters_biz @wsj @latimes @msnbc @cbsnews @abc @michelebachman @thehermancain @newtgingrich

Please share any personal stories you may have on how life insurance has affected your life in the comments below.

Is a four-year degree too slow for today’s speed?

Posted: March 27, 2012 in Uncategorized
Tags: , , , , , ,
0

This past week, I had the opportunity to speak to students from Mark Keppel Magnet School and Toll Middle School on the topic of ”Doing the Impossible,” and I walked away so impressed with both programs. Loreta Noubarentz introduced me to the audience of students, parents, and teachers, and Principal Mary Mason of the magnet school finished by talking about the importance of imagination. I was deeply inspired by Principal Mason’s encouragement to kids to constantly use their gift of imagination to create things that we have not yet seen.

At the end, several of the students and parents told me about Principal Bill Card of Toll Middle School and how he runs the school. They shared a variety of stories about him, from his firmness with the students to his sense of humor that has helped him connect with the students to create a movement called 850. One of his students told me how Principal Card came to her class one day and pointed at her to follow him to his office. (I can only speak for myself, but anytime I was invited to the principal’s office it wasn’t for doing something right!) He than asked this student to make a big smile while holding a sign with the number 850 on it. A few days later the students saw that the entire entrance and the walls of the school were filled with pictures of students holding the 850 sign and smiling. Eventually the students figured out what 850 stood for: It was the average score Principal Card wanted the entire school to have on their California School Test, also known as the CST. I was so impressed that a principal so creatively brought the students together in the cause of increasing the average score. Too many times the media is only focused on teachers who don’t do a good job; and while I’m sure there are plenty who don’t, instead I would like to applaud those teachers who do an outstanding job raising the future of America.

This blog isn’t just about that, though. I want to know if self-education is actually moving people along faster in their lives and careers than a four-year degree. Just recently I was hosting our Vistage group meeting at our headquarters, where some of my friends who are CEOs and presidents of their own companies come to have our monthly meeting. In that meeting the conversation turned to what it took to be a software engineer in today’s world.  It was interesting to hear that a student, after two years of working on his four-year degree to be a software engineer, needs to start all over again because everything he learned in the first two years has already changed. The reason for that is that things are changing so quickly today. You’ve heard the commercials that joke about new computers coming out more and more quickly; well, they are no longer just joking. I just bought my iPad 2, and the iPad 3 just came out last week. I just bought my iPhone 4s, and now the iPhone 5 is coming out. Software and tools are changing so quickly, as are methods of communication. In light of all this, it may be time to question our method of providing a degree for students nowadays.  Do they really need to go to school for four years, or can the same things be accomplished in two years or even one intense year? More and more students are starting to drop out before the four-year marker because they are in a hurry to get their careers started, not necessarily because they’re bums and drop outs.

Another issue with the four-year degree is that it’s putting many parents in a tough situation financially to have to cough up anywhere from $15,000 to $80,000 per year for school. Many of them are taking out money from their own retirement account to pay for a four-year degree. Our current system is creating an environment of dependency to kids. I understand there’s a certain level of prestige in earning a degree with from a good school, but we’re not living in the same time as we did thirty years ago or even ten years ago.

I hope this blog gets read by the right people in the educational system who have the courage to start considering innovating the current system. I’m a firm believer that the kids are much smarter than we think they are. I predict that very soon we will have a thirty-six-year-old President of United States. After all, multi-billion dollar companies are being run by twenty-five year olds, and it has become very common for baby boomers to take advice from twenty year olds in technology. Age is slowly but surely becoming a non-factor.  But I think our educational system can speed up the process of transferring the most updated knowledge to students at a level that matches today’s speed. Any of us with today’s tools on the internet can learn how to use Adobe Illustrator CS5.5 and call ourselves a graphic designer. We simply didn’t have access to that kind of information when the four-year degree was created. In response to these changes, our educational system needs to undergo major innovation; if it doesn’t, we will see a surge of private universities that provide four-year degrees in a twelve month period. We’re sitting on a goldmine with these young kids who are just waiting to create things that you and I thought we would only see in movies. We think of the internet as one of the greatest inventions, yet it is nothing close to what these kids can create with today’s conditions.

My challenge to you is to start having these conversations with the principals at your schools and with your children. I do believe there are people who are willing to listen and do something about it. Let’s make the future bright