One sad Day!

You know this business is great!  Everyday I get to help people protect themselves from disaster.  Insurance is there to stop a loss from being total.  Everyone wants maximum coverage for the minimum premium but, in general we all know that insurance is a necessary part of life that will someday help us out.  However, one type of policy is more important than any other. 

Here's a quick story about a man named William Pettry, who flew to Jacksonville Florida Friday, October 5th to watch his favorite team play, the Bears.  That Sunday at a local bar in Jacksonville William was murdered in an unthinkable way.  He was stabbed to death right in the middle of the bar.  Now they caught the guy right away and have a confession but that won't help Mrs. Pettry.

You see William leaves behind a wife and three young children and no income.  Mrs. Pettry will struggle to pay the funeral costs but that is just he beginning because William's contractor business will not continue to make money without him there and they had no life insurance on William.  Mrs. Pettry is a stay at home mom that takes care of 3 young kids, so now she has to leave her kids, get a job, and pay child care to make ends meet, because he husband's income will no longer be there.  Not only will he not be there to see his kids grow up, take them to the doctor, play baseball with them, hug his wife when she has had a bad day, fix the toilet, and all the other things he did but his current and future income is all gone!

If William had just spent a couple of dollars a day on a term life policy, his family would not have to worry where next week's mortgage payment was coming from.  Don't put your family in this position!  Life insurance is cheap!  It's important! and you need to get some!  Call an agent that you trust and buy a policy today! 

J

Ask me for a quote!

Never, Never, Never, Never, Never Give up!

Sometimes taking a stand is painful ... no scratch that, it is always painful!  Everyone (even those that stand with you) seem to have a ax to grind with how it is handled.  Some thing you are too strong, some think you are too weak.  Some say don't be so gruff, some say don't be a wimp.

The bottom line is that when you find an issue meaningful enough for you to take a stand on ... you know drawing a line in the sand and saying everything on this side is okay but when you cross this "we've got a problem" ... don't expect that the crowd will rally around you and praise your eloquent handling of those that have an opposing view.

People are often afraid of how the world will judge them if they stand too firm.  They're afraid that someone will "call them out" and make fun of them or argue better than they do.  In short they are afraid of being made a fool of, and that is a powerful deterrent for most folks.

As I age I'm less likely to take a stand on minor things but much less fearful of being made a fool of, in fact I could care less about people that know me thinking I'm being foolish.  The lack of fear is my best asset in a moral battle.  People can sense when you are are solid ground with your understanding and at peace with the consequences of your stance.

Your confidence will shake theirs, your fearlessness will instill fear in them, your calm attitude will shake their resolve.  When you are not worried about the pain of a moral stand ... truth and right will prevail!  So, don't be afraid if you are standing firmly on the side of right, the pain will fade and when the smoke clears the world will be better for your sacrifice!

Email me to see how inexpensive it is to protect you family's future!

Ever need something and not have it?

As an insurance agent, I often review client insurance policies to make sure they have the appropriate type of policies, amount of coverage and most cost effective policy. The most commonly overlooked protections is a personal umbrella policy.
An Umbrella or personal liability policy is usually an all risk, all peril policy with coverage limits that start at $1,000,000. There are some very specific reasons that you might want to consider purchasing an umbrella and there are also some adjustments that you will want to make to your homeowners and auto insurance if you do. How do you know if you need an Umbrella?
Well, do you have youthful drivers in the home? One of the most basic reasons to purchase a liability umbrella is if you have young children that are learning to drive or are under age 25. Young drivers are inexperienced, easily distracted (friends, cell phones, texting, etc.) and statistically are involved in more accidents than any other age group. An umbrella policy will cover them all and protect you from losing everything if one of your children happens to cause a serious accident.
Do you have assets to protect? Most homeowner and auto policies have liability coverage between $300,000 and $500,000. But if you have assets in excess of this amount, you are exposed to a potentially higher liability problem if someone decides to sue you. Maybe you were involved in a car accident or someone slipped on your property, etc. If they sue you for more than the $500,000 and win, the rest will come out of your pocket or you may have to sell some assets (usually at a loss). If your net worth is over this limit, (value of home, land, retirement, autos, investments and all other assets added together) consider purchasing an umbrella policy for the appropriate amount. Think about the last time you heard about a lawsuit for less than a million dollars, how many do you hear about that are below two million these days?
Another reason to consider is if you are in a profession where incomes are typically high. Someone may think that you are wealthier than you are just because of your title or profession and may be more inclined to sue for a larger amount.
Today we live in a sue happy society. Lawyers are suing for larger and larger amounts and if you bear any liability, they are winning. Even if you are not liable, the legal defense fees are expensive. Some say that having a million dollar umbrella causes attorney's to sue for more. This may be true, but if you need the protection, it is better to buy the policy and hope you never use it, than it is to need it and not have it.
For many families today, young drivers, increasing net worth and higher incomes make personal liability protection a necessity rather than an option. The additional cost is not extreme, and if you make increase your deductibles on other policies, you can possibly cut your extra out-of-pocket cost in half.

Email me if you want to discuss your Liability needs

What would happen ... ?

This week reminded me that my job is to ask the questions that no one wants to ask.  I'm here to say "what if?" and not in a good way most of the time.  What happens to a child if a single parent losses their life?  Would the estranged ex spouse take on raising the kids?  Would the Grand parents put off retirement to take in their grandchildren?  Would they have enough money to take care of them?

Not real fun stuff to talk about, in fact it is much like growing old (if you read my last post you know I think that getting old sucks).  But if you never talk about the possibility of your children losing their only source of income, they'll be in trouble if that day comes. 

I suggest that you call an insurance agent that you trust and talk to them, like I said our job is to ask the questions that you don't what to or even know to ask.  Many times just talking about the need is exhausting but getting protection in place for your children (or spouse) will give you piece of mind. 

Nope it's not fun but just like getting a cavity filled, it may not be fun right now but you'll feel better when you get it done.  There are lots of options but remember the best option gives you all the coverage you need!  If you can't afford what you need, something is WAY better than nothing!

The Goose that Lays the Golden Eggs!

You insure you home because it is worth $100,000 or more ... you insure new cars because they are worth $10,000 or $20,000 ... so if something happens to these investments you would lose a lot of money. So you insure things that help you live like you want to and things that are worth a lot of money.

Lets imagine that you have a goose in the basement of your house that lays golden eggs. Everyday you go to the goose and get an egg worth hundreds of dollars. Year in and year out that goose is popping out golden eggs just for you and your family.

What would you insure that goose for? $100,000, $250,000, a million dollars? Would you say that a golden egg laying goose is nearly priceless and it's loss would hurt your family's standard of living? Of course it's priceless, it's worth more than the house you house it in ... you can always get another house but money everyday, that's priceless.

Okay, so the goose is "YOU"! You bring home a paycheck that your family depends on and you do that everyday month after month, year after year. You are priceless to your family so what do you have in life insurance? Is it enough to replace all the income you would have brought home during your working years? No one wants to think about it but if you died tonight how would your family live? Would they be able to stay in the house they know as home? Would they be able to maintain the same standard of living? Would your spouse have to get a second job and send the children to daycare while they struggled to make ends meet?

Think about that ... then tell me what you think is the most important type of insurance. Life insurance is the difference between a sad day and an unbearable lifetime of loss. If your family loses one of the most important people in their lives it is devastating, but if they lose their income in the same day it would be horrific. So don't EVER go without life insurance. It is more important than any other form of insurance.

Now having said that, the question is how much insurance and what type should you have, and that is a very personal question. I'll give you a quick overview of how to figure what you need and what type would work best for you but, you need to see a professional that you trust and talk through your needs.

Okay ... much do you need? Well, the basic formula is based on 4 basic needs;

1. Final expenses (which is about $10,000 average).

2. Pay off debt (home, autos, credit cards).

3. Provide for the children's higher education (some folks want to pay for it all and some say they need to pay for it themselves and still others say they want to pay half).

4. Provide for the lose of income (some experts say 10 years some say 5 years but this is the big one).

The first two are easy, ten grand for the final expenses unless you have a more extravagant funeral planned for yourself. Cremation can be a little cheaper but will still run you $7,000 in our neck of the woods. Of course if you have a huge memorial made from imported Indian marble or a deluxe plot next to your favorite movie star you'll need to add that to the cost. Debt is a personal question but it has a definite answer as well, how much do you owe? Add that amount to the final expense. The average family in America owes $8,400 in credit card debt, $14,000 in car loans or educational loans, and $85,000 in mortgage debt. So most families will put somewhere in the neighbor hood of $108,000 in total debt.

Number three is a huge question mark for most families, if you have more than one child and you are in the middle to upper middle class you may have plans to pay for their school 100% but more than one or a lower income may indicate that you need to plan to plan only part of their college costs. Or perhaps you paid for your own education and you feel that they should too ... there is no right or wrong answer here only a choice that reflects your personal values and needs. On average a bachelor degree will take 5 years to complete and tuition will cost about $12,000 a year so lets say the average household would want to pay half of their two children's' education so we'll put $60,000 in this example.

Finally, how much income do you need to replace? I like the five year rule. No science here I just think that it is an easy number to come up with and easy to wrap your head around. Five years of income is enough to support the family while your spouse returns to school to get new training and a better job, or it is a big enough stake to invest and draw a reduced income for a longer period of time, supplementing the family income until the children leave the house and are on their own. The average income for an individual in the US regardless of age, education or gender is (depending on who you ask) about $37,000, so that is what we will assume for our example. Which means we will plug $185,000 in the formula.

1. Final Expense = $10,000

2. Debt = $108,000

3. Child's Education = $60,000

4. Income replacement = $185,000

Total = $363,000 in needed death benefit

Most people have some life insurance at work is two times your salary so you can subtract $74,000 from the total need, which leaves $289,000 that our imaginary family provider needs to protect his family.

So, what type does he (or she) need? Term? Level Term? Return of Premium Term? Whole life? Universal Life? Again, I have some ideas but you have to discuss your situation with a professional you trust, to decide which you need.

Quickly ... here is my opinion, "coverage is the most important thing!" Some of these types of insurance have great benefits over the others but first and foremost you need to secure the amount that you need.

Term is the cheapest but if you stop paying on it before you die, you get nothing, plus the price is based on your current age so it will increase in cost each year that you own it.

Level Term is more expensive but it doesn't increase for 10, 20 or 30 years ... at the end of the 10, 20, or 30 years, the cost will increase dramatically. If you stop paying on this before you die you get nothing.

Return of Premium Term is more expensive still and is just like the Level Term except that you get all the premium back at the end of the 10, 20, or 30 year term if you don't die.

Universal Life is a whole life policy based on interest rates the cost never increases and the value is tied to the interest rates of the day. So the cash value available at retirement age will be great if interest rates where high during the time you held this product or not so great if they were low during the time you held it. It is generally more expensive than the Return of Premium Term, but the values are not guaranteed.

Whole life is the most expensive type of life insurance but it gains value based on dividends and that is the most consistent and rapid way to gain cash value in a life insurance policy. Values are not guaranteed but, you can judge the likely hood of success by the longevity of the company in your community.

This is important stuff so call your agent today to talk about it.

J