Learning to Love: The Rising Desire for Life Insurance

Learning to Love: The Rising Desire for Life Insurance

It needs to be said, but I’ll soften the indecorous ‘I told you so’ with smoothly digestible Latin: Quod erat demonstrandum.

QED: ‘And so it is demonstrated’. I’ve hammered on this Romanism before, while the crisis keeps making my point: life insurance is invaluable; trusts are solid friends; steadily update your will. The year 2020: Q-E-D.

Insurance specialists and advisors report that last year, applications for life insurance and queries on trusts and wills rose to trend-busting proportions. Everyone knows you need a will. Life insurance is a must, particularly for breadwinners. Trusts are perceived as the fiefdom of the wealthy, but folks of moderate means often find them useful – parents with a special-needs child, for instance.

We’ve counseled the use of these products for years, reached many prospects who became our good customers, yet everything we did, from the study of statistics to chats with our families, indicated a tendency to put things off.

And then came a pandemic.

To that true-talking voice in our brains, we should listen. Not the fanciful one on the right or the stultifying one on the left – for me, ‘TTV’ is located near square in the middle, just slightly off-center left. It calmly warns me, implores. We listen or we don’t. Now, I’m the ‘don’t’ sort of fellah, so I feel for the laggards.

In January 1998, a party guest at my swinging Moscow pad told us exactly, precisely how the whole balloon would go ‘pop’. He knew about bonds, he’d heard about covenants; the largely corrupt, often drunk, incompetent phalanx of fools running the show, and this dude had it figured. A crash was coming soon, and though this was Russia, even granny couldn’t stop it. Did I do anything to get ready – husband my cash, carefully map the fire exits? Nah.

How much planning can one do, I ask you, while yes-I-can boogying on the bar at the feted, fated Hungry Duck, gyrating to an electro-beat in a Joker-purple sports jacket? It’s a no-brainer. In later years, a colleague observed: “After work, you’re really quite jolly [he may have said ‘goofy’] – it’s funny, because in the office, you’re scary.” I had reason to firm up.

Here’s what’s running right now: MIB Group, a not-for-profit providing fraud protection services to the 450 US and Canadian insurers who own it, reports that in 2020, the number of insurance applications from the age 44 and under group increased by 7%. That’s a lot, because the trend had been southward for quite a few years.

These relative youngsters are notoriously averse to preparing for the worst. That’s how insurers see them, anyway; but the pandemic drove them to face mortality. Dying is costly, which everyone knows, though many avoid pondering it deeply. Other issues – food on the table, kids in school, grief counseling and second-career training for a spouse – can stretch into six-figure territory. For uninsured millions, coronavirus inspired sleepless nights and resolutions to do something, now.

I’ve talked with friends and acquaintances who have life coverage through their jobs, yet haven’t a clue of its terms and conditions, potential for riders, or even the cost, if any. Last year, 22 million people lost their jobs, and for many families, this meant the loss of company-sponsored life policies. It was a terrifying time to find oneself vulnerable and a terrible way to experience it.

Normally, insurance is on many people’s pay-no-mind list, as if nothing can happen and we’ll all live forever. It’s a happy delusion and OK to a point, but that nexus is recognition of fallacy: things will go wrong; we will pass away; someone is counting on us.

Aging a bit, I feel aches and pains, and I know that eventually one of those pangs will kill me. Then I notice the beautiful day; consider the cake in the icebox; recall that Southampton, my Premier League team, is playing juggernaut Liverpool – we improbably won; down, blood pressure! I’m nonplussed by the inevitable and try to relax. Nevertheless, I do my stretches, take long walks, choke down my meds, update the old will, keep my executors informed. I take life easy, but keep up on the paperwork. My spirit won’t rest easy if I neglect to leave pin numbers.

Now imagine you’ve left children with no college fund. Those who lost insurance last year often landed in briars: they needed life coverage pronto, but found the process daunting, a real challenge. Internet searches, the panacea of problems, can turn into mudslides. Let’s consider some first-timer advice to get on the trail.

First, figure out what you need. Sounds simple – it’s not, but it’s done every day. Review your assets. The youngish crowd may hold little but debt, while middle-aged folks can own quite a bit – IRAs, home equity, an investment portfolio. Your assets may moderate the amount of life insurance needed, or equally point in the other direction: the less you have ‘in the bank’, the more coverage you need. Wealthier people may want larger policies, too – death benefits can cover estate taxes, provide tax-free legacies and so on.

Familiarize yourself with the insurance types: term and permanent, whole and universal (you can read some of my articles for assistance). Be careful with a product called indexed universal life, IUL. It’s currently popular and widely available, but don’t take it lightly: it’s a serious commitment and needs precise structuring. Top-flight advice is a sine qua non, to employ another Roman rule. IULs can generate significant retirement income if you can handle the volatility, risk and high fees. For those who can’t, there are plenty of alternatives.

Quality insurers provide online calculators to help you determine coverage. Start there and then contact a human agent, who’ll help uncover the fine points and customize your policy. Robot insurers work fine, but people will treat you as kindred – as individuals. That’s how to get what you really need.

Shop for best price, but always and ever rely on tested providers, the solid companies that have lasted. Some have been around for a century or more: they’re dependable, the name of the game in life insurance. Paying a few extra premium dollars to gain with their solidity is money properly spent.

When you apply, be clear-sky truthful in answering the provider’s many questions. They’ll require health records, bloodwork and fluid samples. These tests can be done at your home – insist on this point – it’s less stressful and safer these days.

The first time I had an insurance exam, I stopped for a latte beforehand. You’d be surprised how caffeine can make your heart flutter. This flummoxed my doctor and nearly derailed the whole process. There’s sound advice online, of all places, on how to make a health exam go well, or you can consult your family doctor. Try not to be – what was that word? – as goofy as me, and all should go well.

The Contrary Faces of Indexed Universal Life