Posts Tagged ‘life insurance’

Life Insurance

7 Life Insurance Myths That Should Die

NEW YORK (TheStreet)

Consumers view life insurance as a necessary evil. The joke among life insurance marketers is that under the term “necessary evil” in the dictionary is a photo of your life insurance policy.

Americans know they need life insurance — 85% of consumers say so — but the buying process can be confusing, and that causes hesitation in the market, flattening out life insurance policy purchases over the past three years

“Life insurance has never been as inexpensive or easy to buy — especially with the anticipated growth of online and nontraditional purchasing channels — yet, millions of consumers continue to put off the decision,” says Marvin H. Feldman, chief executive of the Life Foundation, which conducts an annual survey on consumers and life insurance. “Insurance professionals and our industry play a critical role in helping to educate the public on the wide range of options available and should continue to work together to help people get the life insurance coverage they know they need.

Still, even industry professionals know life insurance remains one of the most misunderstood areas of insurance.

“Who needs insurance, how much does it cost, and when should you get it?” asks Patrick Bet-David, chief executive of People Helping People, a Woodlands Hills, Calif., financial services company. “If you ask 10 different people on the street you’re likely to get 10 different answers — from ‘I’m too young’ to ‘It’s too expensive’ to ‘I’d rather invest the money.'”

Bet-David offers these responses to common myths on life insurance:

It’s not possible for a company to pay $500,000 in death benefits when I’m only paying $50 a month. If all policy holders kept their policies, life insurance companies would be in trouble, Bet-David says. “But they make their money because people tend to cancel their policies every seven to 10 years or so,” he says. “If you’re smart, you’ll keep the policy. They can afford to give $500,000 for $50 a month when they know that 98% of policyholders won’t keep their policy for the life of the policy.”

I’m young and don’t have a need for it. Most people eventually get married, Bet-David says. If you’re smart enough to buy it when you’re young and single with a low monthly cost, you’ll benefit in the long run. Also, you still have a need for final expenses, unpaid debts and medical bills.

Life insurance is more expensive today because of inflation. Life insurance cost is based mainly on your life expectancy. “If you live longer, your policy will be cheaper,” he says. “And today’s life expectancy is longer than ever, which means insurance is cheaper.”

Only breadwinners need coverage. Imagine what it costs to hire a homemaker raising kids, Bet-David says. Now multiply that times the amount of years your kids will be under your support financially — that’s how much insurance the homemaker needs.

Better to invest that money than buy coverage. You really can’t have too much life insurance. “The complaint is always, I wish I had more,” Bet-David says. “If you can’t afford a permanent policy the least you should do is protect yourself with a 30-year term” if age allows.

I won’t be dying anytime soon. I’ll get it later. “A very extensive study of roughly 113 billion people shows that 100% of people die,” Bet-David quips. “The only problem with that study is we don’t know when.”

My policy at the company I work at is plenty. It usually isn’t, since your life insurance value is normally two to three times your income. But even with that amount it’s very annoying when you get laid off from the company you’ve been with for 17 years, landing in your early 40s with no coverage and three dependents who count on your income. “Having your own policy outside of work protects you regardless of what your company decides to do,” he says.

As originally seen on http://www.thestreet.com/story/12441908/1/7-life-insurance-myths-that-should-die.html on 2/24/2014 by Brian O’Connell

Follow Patrick Bet David’s Weekly show on YouTube: Valuetainment Weekly

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.

A video expansion of our blog on “The Top 10 Most Honorable Professions“. These professions deserve our admiration and respect!

There’s honor in any job someone does well and with enthusiasm, but there are some professions that simply deserve our appreciation and respect.  These are professions that individuals choose because of their desire to serve and protect others. Some of the professions on the list may be ones that you don’t think of as particularly honorable; until the day that person is helping you. Some of these careers simply don’t get the credit they deserve, but they are full of real-life heroes.  They may not be the highest paid or the most recognized, but the world wouldn’t be the same without them. 

Here are the 10 Most Honorable Professions in no order of importance:

1.         Military Personnel
I’m partial in this area because I had the opportunity to serve in the U.S. Army and it was one of the most honorable experiences of my life. There’s nothing like knowing you could be called up anytime to go to battle and that your life could be on the line. In many cases, soldiers spend months, if not years, away from their loved ones. So while many of us complain about missing our favorite TV show or the Big Game, there are soldiers missing the birth of their newborn or the moment their toddler took his first steps. These are sacrifices that our armed forces make for a larger cause. Some make the ultimate sacrifice for a cause greater than their life; the cause of liberty, humanity or the defeat of evil.                

2.         Teachers
Most of us know that teachers are not the highest paid professionals out there, but the job is rewarding in other ways. If you think about some of the people who influenced you the most in life, odds are you would remember a teacher. It could’ve been 20 years ago but you still remember the teacher who inspired you, believed in you, or challenged you. I had a teacher of mine named Mrs. Sinclair from Glendale High School that made a big impact on my life.  She was a little shy of 5 feet tall and 110 pounds, but she walked around as if she was 6’5 and 240 pounds. She commanded the entire class with a word. She believed in her students and encouraged us, but she also pushed us to be better and reach higher.  She was a Major in the Army Reserve and a big part of the reason that I eventually joined the Army 101st Airborne division. 

Later in life, when I was invited to speak at my alma mater, I spent the first 15 minutes of my hour telling the students about Mrs. Sinclair and the impact she had on my life. I still see her as an angel that God put in my life. 

3.         Police Officers
When we see a cop in our rear view mirror, we don’t get a warm, fuzzy, feeling of appreciation for this professional. In fact, we can get pretty argumentative and rude about police – that is until someone breaks into your home or office, and they are there at 5:00 in the morning to make sure everyone is okay. How often do we hear stories about a police officer getting shot or injured on the job? That’s someone’s husband, daughter or brother who just took a bullet for their community. Most police officers have a strong desire to see justice and protect the innocent. Sure, you can find the occasional example of a cop who abuses their power; but we should focus on the thousands who do their job with honor and a desire “to serve and protect.”

Next time you get pulled over by a cop, tell them you appreciate them and give them a link to this blog.  (-;

4.         Firefighters
Unlike Police Officers, Firefighters actually get quite a bit of respect and recognition for what they do. 9/11 was a vivid reminder for all of us that firefighters run towards danger when any sane person would run away. I live in Southern California and the wild fires here can get pretty ferocious. Thousands here know that they owe their homes, possessions and sometimes their very lives to the brave men and women that stand between the flames and their world. Firefighters don’t do it for the money or glory; they do it because they are driven to save the lives and livelihoods of other people.

5.         Nurses
Other than the birth of a new baby, we rarely go to the hospital for a happy reason. Nurses see people at their most difficult, painful and stressful moments. Sick and hurting people look to their nurse to comfort them, listen to them and take of them. Nurses work long and demanding hours, sometimes dealing with tragedy and unavoidable death. Their reward is found in the moments where they see a patient get well and go home, in no small part because of the tireless efforts of their dedicated nurse. We may not always like that nurse poking us with a needle, but many of us will have days in our lives where a nurse will be the one getting us through.

6.         Life Insurance Agents
This choice may be a surprise to many of you because we don’t often think of a life insurance agent as a hero. When I left the military, I had a decision to make about a career. A mentor suggested life insurance. My mentor was ex-Navy Seal, living in a mansion in Newport Beach, so I valued his guidance. He told me that working in life insurance was one of the most rewarding jobs that you can choose. I didn’t understand what he meant by that until I started working in the field. The stories of those whose life insurance policies provided financial stability during a time of sorrow eventually showed me the honor in helping others to be prepared.

A few weeks ago I was giving a talk to a few hundred people on this topic of honorable professions. Afterwards, a lady approached me with tears in her eyes and told me that she agreed that being a soldier and life insurance advisor were both honorable and important. She then told me the story of her son, a soldier who had been killed in battle in Iraq. Her son had always wanted to be a soldier. He knew that it was dangerous. Before he died, her son had secretly purchased an additional life insurance policy for his family on top of what the military provides. This mom, who had lost so much, carried with her the pride in her son’s sacrifice for his country and in his effort to ensure that his family would be assisted in the event of his death.

7.         Parents
It’s a difficult task today to be a parent. There are more things to guard your kids from than there were 20 years ago. The Internet has become an amazing education tool and a dangerous rabbit hole for children. We also live in a culture today where kids are not taught to respect their parents, and parents are afraid to discipline their children. The good parents aren’t afraid to give the love, guidance and discipline that children and teenagers need. Moms and dads are responsible for raising the next generation of leaders and thinkers.

Being a parent is perhaps the most underappreciated job because it is often not even recognized as a job. As a society, we need to keep the standard of parenting high, and that starts by recognizing that being a parent is the most important job that we will ever do. Parents get a lot of criticism for what they do and at the end of the day they are responsible to answer for their children’s actions.  For every bad parent there are hundreds that are day to day heroes. Give them a break at times and tell them what a great job they are doing.

8.         Pilots
When is the last time you were on a flight where afterwards you thanked your pilot for doing a great job flying? For the time you were on that plane your life was literally in that pilot’s hands. The pilot’s job is one where perfect performance is required every single time. We don’t get off of the plane “high-fiving” our pilot for a successful flight, but maybe we should. Watch what happens the next time you give a thank you note to your pilot. It may be the first one he’s ever gotten in 20 years of flying! 

9.         Doctors
With the current controversial health care debate, many health providers have been criticized for making too much money or charging too much for services. I think if you’re willing to be in school for 20 years and spend hundreds of thousands of dollars for an education, you have earned the right to get compensated for it. Even though medicine is a decently compensated profession, most doctors do not get into it for the money. Most doctors I have met wanted to be a doctor since they were little. They have a powerful drive to help people, save lives and make a difference. When a tenacious doctor works to save your loved one, you realize that is what they do every day for so many families.

10.     Clergy
Talk about a “full time job” — being a pastor is a 24/7 job.  Pastors never truly have time off because they are always responsible for their congregation. The pastor must console and pray for the wife whose husband just left her and their three kids; or the church member who just lost their home and has nowhere to live. When the church is short on funds for charitable work, it is the pastor who must deliver the unpopular message to the congregation on the importance of tithing.

Perhaps most importantly, a clergyman or woman is the face of God’s love to so many people. Sure, there have been clergy that have not lived up to that responsibility. But one bad example can overshadow the good work of thousands of other pastors serving God and their communities with honor and grace. Don’t judge a church based on a prior bad experience. I was once very critical of churches and not at all open to the idea of anything to do with religion. It was only after several collisions with rock bottom that I realized that I couldn’t do it by myself and started seeking the truth.  Whether you belong to a small church or a large church, let your Pastor know how much you appreciate them.  Believe it or not, you could be the first person to do that.

In closing, I want you to know that there are many professions out there to choose from that have played a very important role in society. I chose these because of the lack of recognition they receive while serving their local communities. I would love to hear your feedback and comments about this blog.  If you believe there’s a profession that’s also inherently honorable, please share it.