The reason most agents, advisors and planners aren't selling more life assurance is that they don't truly understand the advantages of owning life assurance themselves. Yes, they'll know that they have the benefit protection for his or her family and spouse. But, like most of their clients they do not see the worth of owning a policy themselves. So, like their clients, they rent their life assurance protection. (Buy Term Life Insurance)
If i'll ask, how long will you would like your life assurance protection?
If you hear Primerica and therefore the remainder of the "Buy Term and Invest the Difference" advocates, they might like us to believe that we'll only need the protection until we've accumulated enough cash to measure comfortably on. And, on the surface that seems to form sense.
However, let's check out the truth of most peoples' financial situation. Will most of the people save enough money to measure comfortably on, before retirement?
When we say enough money to measure comfortably on, what are we talking about? Aren't we talking about having the ability to get enough income annually to hide our normal living expenses, our current standard of living, income taxes, emergencies and final expenses? So, if we were to die today, and our family needs a minimum of $50,000 annually to hide their current expenses, then what proportion money can we got to have accumulated? At a modest 5% annual rate of return, don't we'd like to possess accumulated a minimum of $1,000,000? However, that does not take under consideration annual inflation! in only 10 years, at 4% inflation, won't we'd like about $75,000 per annum to take care of our same standard of living? Now, what proportion money can we need in our accounts? what proportion money will we'd like in 20 or 30 years from now?
Now let's consider, what percentage of the population actually has $1,000,000 or more of assets? consistent with Capgemini and Merrill Lynch & Co. in 2005, "Only 1 in 125 Americans have quite $1 million in financial assets like stocks, bonds, bank accounts, land and businesses they own." that's but 1% of the whole U.S. population, including retirees!
And, here's the important problem... "The Department of Commerce reported that in 2005, the savings rate fell into negative territory at minus 0.5 percent, meaning Americans not only spent all of their after-tax income but also had to borrow money or plunder their savings. this is often the primary time the savings ratio has gone negative for a whole year since 1932 and 1933, when the US was struggling to deal with the good Depression."
How much money have you ever saved so far?
What's the chance of you, or your clients, accumulating enough money to measure comfortably on, before retirement? Would you agree that it isn't very likely? If most folks won't have accumulated enough money to measure comfortably on before retirement, then how long will we'd like life insurance? supported the above, it appears that we'll need our life assurance a minimum of until we retire!
Will we'd like life assurance in our retirement years?
If but 1% of the population will have accumulated enough money to measure on, before retirement, then where will we get the extra income we'd like in retirement, to take care of our current life style? is not the additional income we'd like getting to come from our Company Pension Plans and Social Security?
What happens to the income from our Company Pension Plans and Social Security once we eventually die? There are a myriad of 'survivor options' in company pension plans, and that they all boil right down to the surviving spouse receiving less income. And, with Social Security won't the surviving spouse lose the smaller of the 2 Social Security payments?
Plus, at death, isn't there getting to be additional expenses for burial, hospital, probate, etc. If we pay those expenses out of our savings, doesn't that mean there's less money to get an income for our surviving spouse?
How will the surviving spouse maintain their current standard of living, with this reduced income?
If the surviving spouse only loses $1,050 of income per month, from the reduction in pensions, Social Security and assets, that's $12,600 per annum . to exchange that lost income, supported a 5% return, won't they have $250,000 of extra money , from a insurance policy? (Note: We are conserving the investment principal to account for effects of inflation and extra taxes over subsequent ten, twenty or more years of retirement.)
Let's return to the most question... How long will you would like your life assurance protection? is not the Answer? Until you die!
If most folks will need insurance for our entire lives, until we die, then is insurance the proper answer?
In theory, insurance would seem to be the smallest amount expensive thanks to get the protection we'd like fort our family and spouse. However, that assumes that we are in excellent health until the day we die, which we are ready to qualify for rock bottom premiums during our entire lives. And, that's an enormous assumption!
The reality is, as we get older , most folks gain weight, develop minor health issues and that we won't qualify for rock bottom insurance premiums. And, for those folks that develop major health problems, we might not qualify for insurance in the least . Then, consider that nearly every insurance policy ends by age 85.
If at age 65, you're lucky enough to qualify for absolutely the lowest rates on a minimal $250,000 twenty-year term policy, it'll cost you $3,500 per annum . However, if you've got some minor health issues and only qualify for normal rates, an equivalent $250,000 twenty-year term policy, will cost you over $5,000 per annum . Now consider, if you're in healthiness at age 65, then don't you've got a really good chance of living well past age 85? And, if you reside past age 85 you will have no life assurance . You've just spent $70,000 to $100,000, during those 20 years, with nothing to point out for it! And, we aren't even adding within the cost of the term life assurance , for the 40 years before retirement.
The Advantages Of Permanent Cash Value Insurance!
The primary advantage of Permanent, Cash Value, life assurance is that it's designed to supply your family with the protection they have , for as long as you reside . (As long as you properly fund the life assurance policy.) For example; a typical, a middle of the road, $250,000 permanent, cash value life assurance policy, purchased at age 25, and properly funded will cost you about $1,700 per annum . (Assuming you're just in healthiness .)
At age 65, that $250,000 policy will have a cash value of roughly $185,000, and you'll have paid in just $68,000 during those 40 years. That's a mean annual return of 4.39% for the 40 years, and you have had $250,000 of life assurance protection for your family and spouse for the whole 40 years.
Now, at age 65 you'll stop paying the premiums, and you'll have a minimum of $250,000 of life assurance protection for the remainder of your life. Remember, Permanent, Cash Value life assurance policy doesn't end at age 85, like insurance does!
What's the biggest objection to buying cash value insurance? "I can't afford it!" "Cash value life assurance is simply too expensive!"
Where are you able to 'Find the Money' for permanent, cash value life assurance !
Are the extra premiums you're paying for low deductibles and riders on your Homeowners, Auto, Disability, future Care, Health and life assurance policies more important that having the proper amount and sort of life assurance protection for your family and spouse? are you able to release $400, $500 or more per annum by increasing deductibles and removing unnecessary riders? what's the upper priority?
How much money are you spending everyday, on the thanks to work, for coffee and donuts? Or, going bent lunch together with your associates? Or, drinks after work? If you average spending just $4 per day, 5 days per week, 50 weeks per annum , that's $1,000 dollars per year!
How much debt are you carrying on charge cards? what proportion interest are you paying annually on those charge cards?
These are just a couple of of the various places where you and your prospects can 'Find the Money' to afford the premiums for permanent, cash value life insurance, without dramatically changing your current life style!
You need to ask yourself, and obtain your prospects to ask themselves... "What will happen to my family and spouse, if I die without enough life insurance?" "Will my family be ready to keep their home, put food on the table, afford college, take vacations, and put braces on Mary's teeth, etc., if they lose my income?"
If you would like to guard your family, then you would like to 'Find the Money' to urge this invaluable permanent protection!