The 3 Hidden Costs of Life Insurance Never Disclosed?
No matter if you turn on your computer, watch your television, listen to the radio, or read financial magazines and books regarding the subject of Life Insurance and the costs of Life Insurance, you will get dizzy and confused by all the different opinions that are out there.
Just for fun, I recently Googled “How much Life Insurance do I need?” and I was amazed to get over 39 Million responses/links. One website’s Life Insurance calculator gave me a Life Insurance need of $275,176 and another’s calculator gave me a $1,750,000 Life Insurance shortfall using the same set of facts and date.
How is a consumer supposed to decide what the correct Life Insurance amount is for them?!
No wonder there is so much confusion?! People just want the truth as it relates to Life Insurance?!
Due to these findings. The following considerations will provide you the truth and education to help you make Life Insurance decisions easier to understand and believe in.
1. Your Economic Life Value
This may be a new term to you when it comes to calculating the costs of Life Insurance. But it is one of the most important. There is no amount of money that will replace a husband or a father, a wife or a mother in the event of their death. However, their “Economic Life Value” to the family can be easily calculated. It is simple math:
ELV = Retirement Age – Current Age x Current Income
Look at it this way. If you want to retire at age 65 and you are currently 45 and have an annual income of $100,000 = Your Economic Life Value is $2,000,000.
Everyone deserves to understand their “Economic Life Value!”
2. True Costs of Term Life Insurance
After you’ve waded through all the opinions regarding the amount of Life Insurance you should own, you’re bombarded with just as many conflicting opinions about the right type of Life Insurance you should buy. Term Life Insurance seems to be the product of choice because it provides a large benefit at a low cost. However, is the “low cost” of Term Life Insurance really true?
“The bitterness of poor quality remains long after the sweetness of low price is forgotten”Benijim Franklin
As I share with my clients in our Term Life Insurance discussions, “Why would you want to own something where if you get what you want (you live and don’t die), you lose?!”
- You lose the Term Life Premiums.
- You lose the interest you could have earned on those Term Life Premiums.
- You lose the Death Benefit.
When you apply the math to the lost Term Life Premiums + lost % + losing the Death Benefit, you have a potential mistake/cost in the Millions of $$’s!
3. The Living Benefits of Whole Life Insurance
Obviously, everyone wants to live! Well, if they get what they want, shouldn’t their Life Insurance provide them with “Living Benefits.” Whole Life Insurance provides the opportunity for your clients to enjoy the following “Living Benefits”:
- Liability Protection (which is state-specific)
- Disability Waiver of Premium
- Accelerated Death Benefit Provisions
- Source of Liquidity in Estate Planning
- Avoid losing Term Life Premiums and Interest
- Liquidity of Cash Value
- Tax-Deferred Growth of Cash Value
It’s never explained that Permanent Death Benefit can be used with Pension Max, Paydowns, and/or Reverse Mortgages to help your clients maximize their Retirement Income.
I’m sure you have discovered by now, there are many calculations and considerations regarding Life Insurance. I believe that our clients deserve our time, our knowledge and our education in helping you to purchase the correct amount and the correct type of Life Insurance that best fits your situation.
There is no article or calculator that can be “Googled” that will provide the truth you deserve as it relates to the true costs of Life Insurance.
That’s why I hope content like this and our Podcast “The Wealth in Overdrive Podcast” helps provide the truth and education you want and deserve!
If you would like to learn more, contact me to schedule a complimentary one-on-one coaching call. Thanks and I look forward to speaking with you soon.