Like most people, I recognize that I am going to die someday. Unlike most people, I have a lot of life insurance.
I've come to the conclusion that we really need more life insurance agents. Too many people need more insurance than they have.
I started my career in life insurance and annuities. All of the initials behind my name are related somehow to the insurance industry.
I am a true believer. I practice what I preach.
I have purchased a number of life insurance policies on myself to achieve different goals.
I have a policy that will help endow a law school scholarship and another that will support a scholarship fund at a college.
Few people think to purchase life insurance policies for their charitable donations, even though the concept has tremendous tax and planning benefits.
The concept of buying life insurance unnerves most people.
Life insurance forces people to deal with the idea that death may come and come in an untimely fashion.
It was impossible for some people to get their arms around dying. I had a medical professional spend hours explaining how he was sure he was going to live to 90. He died at age 50. I hope someone else convinced him to get insurance, but I suspect they never did.
Although I am going to help charities and do other things, the bulk of my insurance is designed to assist my family. Most people buy life insurance with their families in mind.
I don't think that as many think about the next step.
What will the family do with the money?
When you hear that 90% of people who receive a lump sum will blow it in five years, some people conclude that life insurance is futile.
Why give your family a lump sum and have them blow it?
Most insurance policies have options to pay out over time, but few people use them. It limits them to the terms, rates and restrictions of the insurance company.
Thus, I came up with a simple system. My life insurance is owned by a trust. When I die, the trustee will buy annuities for the beneficiaries. The annuities will pay monthly for the rest of the beneficiaries lives and increase at 3% a year.
When I die, I want to assure those people will have money for the rest of their lives. They won't be susceptible to quick-buck artists and outside pressures.
A lot of hasty decisions are made when a family member dies. Many of them are bad. There seems to be an army of vultures waiting to prey on the vulnerable.
As Glenn Frey once said, "The lure of easy money has a very strong appeal."
I don't want my family to be in a position where a "friend" can burn them after my death.
That is why the combination of life insurance, a trust and lifetime annuities works for me.
Don McNay, CLU, ChFC, MSFS, CSSC of Richmond Kentucky is an award winning, syndicated financial columnist and Huffington Post Contributor. He has Masters Degrees from Vanderbilt University and the American College and is in the Eastern Kentucky University Hall of Distinguished Alumni.
McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field.
Follow Don McNay on Twitter: www.twitter.com/Donmcnay
If one was worried about their family blowing through their life insurance policy, another alternative would be to get a plan that is tied to your mortgage, and when it pays out it pays off the mortgage. For an example many life insurance sites include options for that, http://free-life-quotes-now.com not just a regular life insurance policy. At that point depending on the time and amount of the policy the family may get a little, but it won't be enough to get themselves into trouble.
Ultimately I think the biggest expense a family will face is the mortgage payment anyway, so having that paid off will put them in a much better situation and they may not need the extra life insurance in the end.
So yes, we need more life insurance agents. Don't cringe, I said it. Beyond that, however, we need to create more awareness of the positive benefits of the coverage. The majority of people in a recent study thought that term insurance had more cash value than whole life.
Drugs, be they legal or not, have no trouble getting distributed. Even expensive ones. I guess it's a matter of priorities. Sure, poverty level folks may not be able to afford much if any insurance. For the majority, however, it does come down to priorities. Judging by retirement account values, living in the now is more of priority than delayed gratification.
Pass the mocha and creamer, while my coffee's hot would you?
I also like the lifetime payout concept the author mentions. Lifetime payouts with interest, however, can be directly arranged for your beneficiaries with the insurance company-just ask. Same holds true for you at your own retirement cash values.
While we're on the subject, this is Disability Insurance Awareness Month. If you don't own it, or have it through the job, do yourself a favor and do some research!
http://www.prospectmatch.com/insurancelead/insurance-sales/how-to-sell-insurance/
It depends on a person's situation. If a husband or wife died and the other couldn't otherwise afford the cost of a mortgage, they would need the money immediately -- not later. Which is why a lot of people get life insurance. Funeral costs are another reason a spouse might need funds immediately. Buying funeral plots now, rather than in a moment of shock, when you have time to shop around, is a good idea.
Insurance companies want to keep your money as long as they can so they can money off investing it. Annuities are a great deal for them. For some rich people, an annuity is a good secondary investment in addition to retirement fund accounts, stock portfolios, real estate, etc. Depending on the fund, retirement accounts generally pay more than annuities, but a person should shop around and see which promises a better return.