I have been in the insurance business for 25 years. I have written literally thousands of insurance policies for homes, cars, businesses, etc. I have also written hundreds of life insurance policies. They say that you aren’t a real life insurance agent until one of your insureds passes away and you have to deliver a check to a beneficiary. I have had to do this 4 times now. Delivering a life insurance check is the definition of bittersweet. On one hand, you are hurting for the family. On the other hand, you are providing way more than “thoughts and prayers” as you are giving them the money that they need to replace income, pay for funerals, college educations, etc. Here is the story on the most recent one:
One of our agents asked her sister is she had any life insurance. Her sister didn’t have any life insurance on her husband. Our agent was not life insurance licensed so I was happy to help her. I had the family complete a needs analysis to determine that she needed $200,000 of coverage on her healthy husband. The premium was only $20 per month. He was 50 years old and healthy. The life insurance company puts prospective clients through a paramedic exam and looks at all of your medical records to determine eligibility. Everything checked out fine.
2 years later, I get a text on a Saturday from my agent. “John, I hate to bother you on a Saturday, but, can you check to see if my brother in law’s life insurance is in effect? He just passed away from a heart attack last night.” My heart sunk.. I immediately stopped what I was doing and pulled up our system on my phone. Everything looked good so the policy was in force! Thank goodness!
I felt awful for my client and their family as he was only 52 years old. That is really young considering I am 48. Life can be so short. I filed the claim with the carrier and they assigned an adjuster. The adjuster called the wife and gathered some information. The funeral home provided the death certificate and the insurance company sent an overnight check for $200,000. She was paid within 48 hours of the insurance company receiving the death certificate!
I know the jokes about life insurance companies trying to deny paying claims, but, in the 4 times that I have filed a claim, the insurance companies haven’t hesitated paying the claim. The death benefit has been in the hands of the beneficiary within days.
Now, this story isn’t over because now she has $200,000 in her checking account and has no idea how to invest it, protect it, and/or grow it. Her husband did all of the finances for the family. She needs to make sure it is safe and provides income for her. She needs it to provide as much peace of mind for her as possible. She CAN’T afford to lose this money.
I asked her if she would like my help protecting that money. She said absolutely. She had to pay the funeral home and the only other thing she would like is a new car. She drives a long way (35 miles) each way to work and is worried about her 10 year old car starting to break down. Now that her husband isn’t around, who would she call if she breaks down on the side of the road? I totally agree that she needs a new car to provide her the peace of mind in getting to and from work. After funeral expenses, a new car, and some other minor bills, she has about $125,000 left to invest and protect. She isn’t rich, but, her kids are grown and although this nest egg won’t replace her husband, it gives her peace of mind.
She needs income from this money for the rest of her life. I can help clients with that. If she invests the $125,000, the insurance company will pay her a MINIMUM of $6567 per year, every year, for the rest of her life. She would get a minimum of $6567 if the annuity returns 0% every year for the next 5 years. 0% is the floor and it can’t do less than 0%. If it returns anything positive, her annual payout will only go up from there. $6567 is a 5.2% return on her investment, guaranteed by the insurance company, for the rest of her life. PLUS, if she were to pass away, whatever she doesn’t use goes to her kids. NO stock broker is going to guarantee an investment like that. Her husband is gone, but, his legacy will live on in many ways including a check that his wife will receive every year for the rest of her life.
Thank you for taking the time to read this article and I hope it helps you and your family take action to protect the ones you love.