Protection Products

How to Overcome 5 Life Insurance Myths


Protection

Sometimes, helping my advisors sell life insurance is an uphill battle – with them and their clients. I know it’s not the sexy choice, and it’s not an exciting solution that’s going to help people make a million bucks. But, it does enable peace of mind, which can be more valuable in and of itself. 

With many years behind the scenes and out in the field, I’ve heard a lot of excuses. But, many of them just aren’t true. Advisors and clients are relying on myths, not facts, when considering life insurance.  

 

1) Employer-provided life insurance is enough

Ask your clients: Is the amount really enough to cover your needs? Can you keep your policy when you retire or change jobs? 

Many employers provide life insurance equal to one to two times the employee’s annual salary, and they may be able to purchase up to four to six times their salary. First of all, to replace a client’s income for their dependents, they typically need five to eight times their annual income – some experts even recommend 10 to 12 times. Second, their calculated “salary” doesn’t typically include commissions, bonuses, and second incomes. A needs analysis calculator can help you determine the amount of coverage your clients need. 

Even if they do have enough insurance through their job, you’re clients will likely lose their coverage when they leave. That’s they should only include their employer’s policy in covering their needs if they can take it with them at affordable rates. Otherwise, consider it a bonus. Plus, they may be able to get a better deal on their own, especially if they’re young and/or in above average health.

 

2) Only the breadwinner needs life insurance

Ask your clients: If your spouse works, how would you replace their income in your household budget? If your spouse stays at home, how would you replace their value in child care, cleaning and other household operations? What’s that add up to over several years? 

Are you kidding me?! Spouses who earn less or are non-working are extremely important, and their contribution to your household needs to be protected. If you haven’t already, you should read my colleague Sharlene Woerther’s blog for more information on why spouses need life insurance. 

This is yet another reason why it’s so important to do a needs analysis with your clients. Once it’s been put to paper, it’s amazing how many people see the value in their spouse’s contributions. Insuring a spouse also gives the remaining parent the opportunity to take time off work and help the family adjust to their loss.

 

3) Life insurance is really expensive

Ask your clients: What do you spend on soda and snacks in a month? Could you give that up to protect the ones you love? 

I use to tell clients that often times you can get life insurance for what amounts to a bag of chips and pop a day. Since then I’ve changed my diet, so I no longer buy those things anyway … but I wasn’t too far off with my estimates. You should run a quick quote for your clients and show them the real costs!

A study conducted by Life Happens and LIMRA found that 30 percent of Americans acknowledge their need for more life insurance, but only 10 percent planned to purchase it within the next year. The main reason given was cost, with 65 percent saying that it’s too expensive. However, 80 percent of them overestimated the cost. While the cost for a health 30-year-old would be about $160 a year, the average estimate was nearly twice as high. 

 

4) Only healthy people can get coverage

Ask your clients: Are your conditions under control? When was the last time you looked into coverage? 

Don’t worry if your clients aren’t able to run a marathon or keep up with a fitness video on TV – they don’t have to be perfectly fit to qualify. Yes, the healthiest people pay the lowest premiums, but the life insurance industry has come a long way I just a few years. Many who were deemed uninsurable in the past can now receive coverage. 

A lot of companies cover a range of health conditions, and some even specialize in high-risk cases. Clients can also purchase a policy that is not medically underwritten at all – just be aware that they tend to be more expensive and have lower coverage limits.

 

5) Young people don’t need life insurance

Ask your clients: Do you know of someone who died too young? Have you ever seen a Go Fund Me page to raise money for a person’s family after they’ve died? 

Social media is littered with examples of young families who’ve been impacted by the loss of a spouse or loved one under the age of 40. Accidents and illnesses can happen to anyone at any age. 

The bottom line? If your clients have anyone who depends on them financially, they should have live insurance. Help debunk the myths and make sure they’re covered. 

 

Learn More

 

About the Author

As a relationship manager at Ash Brokerage, Jason O’Barr is a teammate for advisors – identifying new sales opportunities, providing consultative and comprehensive insurance support services, and effectively helping advisors grow their businesses. With experience as a producer, a marketer and an internal wholesaler, he understands the process from the ground up.

life insurance myths needs analysis

Ask an Underwriter: Cervical Cancer


Protection

Know the impact on health and underwriting

Cervical cancer may be one of the most treatable and preventable cancers out there, but that doesn’t mean we shouldn’t worry about it. Education is important – not only for prevention and early detection, but also for underwriting. 

According to the National Cervical Cancer Coalition (NCCC), each year, an estimated 12,000 women are diagnosed with cervical cancer and one-third will die as a result. So even though the overall risk of cervical cancer has declined over the last few decades, it’s still a serious issue. 

Causes of cervical cancer

The human papillomavirus (HPV) is the most common infection known to cause cell changes on the cervix that can lead to cervical cancer. HPV is the most common sexually transmitted infection in the United States – so common, in fact, nearly all sexually active men and women will get it at some point in their lives, according to the Centers for Disease Control

Cervical cancer is preventable

Insuring Cervical Cancer

When it comes to insurance, your clients’ participation in regular Pap screenings not only helps reduce the risk of advanced cancer, it may also be viewed as a credit during the underwriting process. 

Earlier detection and successful treatment rates have also increased the insurability of individuals with a history of cervical cancer. Someone with a low-grade diagnosis can potentially secure a non-rated offer, and someone with a high-grade/early stage diagnosis could qualify for rated offers within a year, and possibly standard rates after three years. 

With so many variables involved – from the diagnosis/treatment details to carrier risk assessment – we’ve created a comprehensive questionnaire to assist you in your fact-finding efforts. 

No matter the situation, we encourage you to ask questions and get all the facts. Have a specific question? Check out the resources below or drop me a line and we'll be happy to help.

 

Learn More


About the Author

Dianne Leidigh has earned an unwavering reputation, among customers and constituents alike, as a respected partner and trusted resource. Through her personal commitment to continuous professional growth, she’s become an Associate of the Life Management Institute, Associate of Customer Service with LOMA, and an Associate of the Academy of Life Underwriting. As Dianne approaches her second decade in the brokerage life insurance industry, much of which dedicated to advocating risk, her passion for helping others, commitment to personal growth, and perseverance truly yield winning solutions!  

 

life insurance underwriting ask an underwriter cancer cervical cancer

Plants and Policies: A little care goes a long way


Protection

 

Editor’s Note: Because the need for regular insurance policy reviews never goes away, we decided to re-publish this post from 2015. When you’re done reading, be sure to water your plants – then go review your clients’ coverage. 

 

It’s that time of year again! Houseplant Appreciation Day (celebrated Jan. 10) is finally upon us. It’s hard to believe it’s already been a year since we last took the time to celebrate the bond between man and shrub.

Houseplants offer many benefits: They filter our air, look great and can even reduce stress. As we all know, constant time, attention and care are all required to successfully tend to our green friends. Many of us are more than up to the task. 

Why then, do we neglect to care for one of our clients’ most important financial instruments: their life insurance?

Most financial professionals agree that a client’s life insurance holding should be reviewed every couple of years, or after any major life event (marriage, birth of a child, new job, retirement, etc.) If your clients own any form of cash value life insurance, reviewing the coverage regularly is even more important. Unfortunately, this rarely happens. 

Maybe it’s lack of insurance knowledge that keeps us from contacting our clients. Maybe we want to avoid the image of the “salesman.” Maybe we don’t even know who to ask for help. Whatever the reason, our Life Insurance Portfolio Analysis (LIPA) team can help you care for your clients’ policies and keep them from “wilting.” 

The Ash LIPA team is a dedicated group of people who specialize in the review of in-force life insurance. With a signed authorization from the policy owner or trustee, and a couple other items, they can order information from the issuing insurance company to “stress test” the health and viability of any insurance policy. 

After the in-force policy performance has been reviewed, the team can look at the marketplace today and determine if there are any potential improvements to be made. The life insurance industry is a fluid marketplace; products are constantly changing and evolving, just as your houseplants are constantly growing!

All joking aside, as financial professionals, life insurance review is critical for our clients. The consequences of a poorly managed policy can be devastating.  

So, on this Houseplant Appreciation Day, as you take time to celebrate the indoor flora in your life (or not) at least remember this: Your clients’ policies are like your houseplants – they don’t require a lot of upkeep, but they do require regular attention if you want them to thrive. 


About the Author

As part of the LIPA team at Ash Brokerage, Scott Behrendsen’s goal is to not only ensure clients have the best possible protection, but to also present the planning strategies and concepts in a concise format that’s easy to understand. He’s been in the insurance industry for 10 years, working in annuities, broker-dealer operations, and health insurance before joining Ash Brokerage. He has an extensive background in life insurance case design and advanced strategies. He’s currently pursuing an MBA in marketing.

 

LIPA portfolio analysis policy review life insurance

The Truth About Insurance for the Military


Protection

In honor of all the men and women who protect our land of the free, we’re sending out a #RedWhiteAndBlue salute the month of July, dedicated to our active military and veterans. We are eternally grateful for their selfless service!

In the life insurance industry, do you realize just how far we’ve come in providing viable coverage for our military? I bet several of you reading this have held on to some rather dated misconceptions you adopted over the years, possibly overlooking not only viable opportunities in this market, but more importantly, the potential to humbly serve those who have served us. 

In effort to help you retool your thoughts, let’s cover a few key topics we frequently see at Ash Brokerage:

Active Military/Reservist/Special Forces*

  • FALSE: Not insurable due to the risk of their duties and travel to hazardous areas  
  • TRUE: An increasing number of life insurance companies now give consideration with review of rank, grade, duties, etc., if they have not been alerted for active duty and/or do not have deployment orders; a smaller number of companies will even give case-by case consideration for those with current deployment orders and certain special forces personnel, who may qualify for coverage with an additional flat extra rating

Exclusion of Benefits Due to Military Ties

  • FALSE: All policies are issued with a war or military service exclusion clause, limiting the benefits of the life insurance contract
  • TRUE: Today, insurance companies address additional risk considerations and cost during the underwriting process, prior to granting coverage, unlike in past when the exclusionary clause was used to eliminated the insurance companies’ legal obligation to pay proceeds to the beneficiary in effort to control cost/manage risk exposure

Post-Traumatic Stress Disorder (PTSD) Diagnosis

  • FALSE: PTSD diagnosis will result in a decline for coverage
  • TRUE: PTSD diagnosis may be insurable with favorable features, such as a single medication/low-dose treatment, long duration/mild symptoms, no drug/alcohol habits, stable environment/occupation, family/social support, regular medical care and follow-up

Put it in Practice: Let Ash Brokerage assist you with your next military case. We leverage our experience, carrier relationships and resources to identify viable solutions based on your client’s individual circumstances and insurance needs. 

*Subject to formal underwriting to establish insurability along with all parts of the contract/process completed in the United States

 

military underwriting life insurance

The Gift of Life Insurance


Protection

Your client may want to provide a meaningful gift for their favorite church or charitable organization, but they don’t want to take a large portion of your estate away from their heirs. Life insurance may allow you to leverage their current gift so they can leave a sizeable benefit for an organization and potentially gain some valuable tax advantages in the process. A donor has three basic choices in making a charitable gift with life insurance.

  1. Gift of an existing policy – Your client may give an existing policy to a charity, in which case all ownership rights should be assigned to the charity, and the charity is named as the policy’s beneficiary. They can then take an income tax deduction for the lesser of premiums paid or the value of the policy. If they continue to pay the premiums, those can also be taken as a deduction.

  2. Purchase of a new policy – The charity may apply for a new policy on your client’s life, with the charity as the original applicant, policy owner and beneficiary. Your client should transfer the funds to pay the premium to the charity, and those funds will then be income tax deductible. The death proceeds will not be in their estate, because no incidents of ownership were ever held by them. In this instance, it is important to understand insurable interest laws persisting to the purchase of life insurance for charitable planning.

  3. Naming the charity as a beneficiary of a new or existing policy – Your client may designate a charity as the sole or partial beneficiary of a policy that they continue to own. This will not produce an income tax charitable deduction at the time the beneficiary designation is made, but it will result in an estate tax charitable deduction for the death proceeds passing to the charity at their death. 

Put It In Practice: Making lifetime charitable gifts allows a donor to see how his or her generosity contributes to the mission of a favored charitable organization. However, the use of life insurance can leave a legacy for generations.

 

philanthropy charitable giving life insurance