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Our futures are so unpredictable. When you’re fit and healthy and in your 30’s with a spouse and children, it’s easy to switch on tunnel vision, and just focus on what’s in front of you.
In January we just had our third child together, so we now have five kids between us (and three under three). We decided that I wouldn’t go back to work for now as full-time daycare would cost more than what I would make. So now we live (or survive) off of one income.
Our kids are the only reason we decided it would be smart to get life insurance. If something were to happen to my husband, then the kids and I would be totally screwed. We consider it protection of our family income, should the unthinkable happen. An “at-home mom”, although not necessarily providing an income, provides tremendous value to the household considering how expensive and time-consuming taking care of kids is.
There are many different options available, and selecting one that suits your needs, requirements and what you can afford is what is important here.
We have started the process, and are now waiting on medical results which will determine our final premiums before we commit to a 30-year plan. If something should ever happen we will be grateful and thankful that we went down this track.
I asked Emily Lewis, a fellow mom and local life insurance agent to explain a bit more from a professional point of view.
Tell us a bit about yourself – I’ve worn many hats over the years and of all of them my favorite is being a mom. I’m also a wife, insurance broker and lover of music, the beach and cooking.
How long have you been in insurance and how did you get into that field? I have been working in insurance for about three years, selling life insurance for about one and a half years. My husband, Jimmi, has sold insurance for almost 15 years, and owned his own agency, Voi Insurance Solutions, since 2009. I got involved after his relentless peer pressuring for about a decade. Persistency pays off I guess! I always found insurance to be boring and assumed it was just about a lot of paperwork. “I’m a creative, I’m no good at paper pushing!” I would argue..It wasn’t until my son Oliver was born, and Jimmi showed me a YouTube commercial for a specific life insurance product that it hit me. As Oprah would put it, it was my ‘aha moment.’ I realized that life insurance didn’t have to be about death, dying and the fear factor of the unknown, but that it was actually about living and protecting this precious life. My decision was made, I was going to get my license to sell life insurance…and with a 2, then 3 then 5 month old baby boy in a bouncy chair on my desk, I did!
Why is life insurance important? Life insurance is important because it protects our loved ones from the “what if’s” in life. There is no magical elixir we can take or prayer we can make to save us from the evil scariness of life. But there is life insurance to offer financial protection and save our loved ones from the potential catastrophic hardships that a death could bring to a family. I’ve been told too many awful stories of how not only did we have to lose our father/mother, but we had to leave our schools/move to another side of town/leave our country because we could no longer afford it with this missing income. Honestly I get so frustrated seeing Go Fund Me’s asking for outsiders to pay for funeral expenses from the sudden loss of a loved one, when this could have been handled at hardly any cost ahead of time. Not only could your funeral expenses have been handled, but your family could be financially set while they grow up if only you had handled business ahead of time.
Aside from a death benefit, life insurance can also work to plan a great retirement. Life insurance offers many investment options in which, with a little bit of homework, you can actually make your money work for you and produce more money over time…simply by saving it and putting those contributions into a specific account. Needless to say I’m a huge proponent.
What options are there? Life insurance options are quite endless but in the simplest of explanations and so not to bore you to death (ha get it? Life insurance humor I guess?) there are 3 specific options and it can get broken up a hundred different ways from there depending on your wants, needs and budget:
1.) Term Life Insurance: This is the simplest, most black and white and most cost effective type of life insurance. You purchase for a term say 20 or 30 years. This is intended for young families when your children are young and your debts are high. It covers you if you die and that is it. The intention is, that god forbid, the unthinkable happens and you die, your family can maintain the standard of living they have become accustomed to for a minimum of 7 – 10 years after the fact.
2.) Permanent Insurance (often times referred to as Whole Life): This is where I take off my insurance cap and put on my finance cap. The options here are endless but in short, you invest your money and regardless of what age you die, your beneficiary’s get paid out. Often times, you can also accumulate a cash value over time as well, and use that money either to cash out and party, live on in old age, or reinvest entirely.
3.) Whole Life: Whole life exists for adults. Kind of like a combination of the two mentioned above. It’s permanent, but accrues no cash value. I sell more of this type for children. It’s an incredible way to save money for your kiddos rather than just tucking it away into a savings account at the bank. In a children’s whole life policy your money works for you, and then at a certain age, say 25 or 35, your child has this nice little nest egg to start their adult life out with. I always recommend to parents they don’t tell their children about this until much later in life because once an 18 year old knows there is money sitting in account, they’ll want to cash it out. But if they wait another 10 years or so, that money will grow exponentially. Compounded interest is a beautiful thing. Children’s whole life is similar to a 529, which you may have heard of before; however, a 529 savings account is tax free only if used for college…a whole life policy, and any other cash accumulating life insurance policy, is always tax free because it is paid for with post tax dollars…cha ching!
Will we be able to afford it? Yes!!! Only, if I had a dollar every time a client said, “What, that’s it?! I thought it was going to be way more than that!” I would have a nice little nest egg myself. Look, life insurance CAN be expensive, if you want it to be. The more you spend, the more you get back. But that’s not a rule. It doesn’t have to be expensive to protect your family with a term life policy, or even a permanent policy. In fact the younger and healthier you are, the less it costs, so don’t play the waiting game: “I’ll wait until we’re better off,” “I’ll wait until next year when I’ve lost 20 lbs,” etc. Just buy what you can reasonably afford today, and when things get better, layer on top of what you’ve already got. Tomorrow may never come. Don’t be that guy, or gal.
What is the process to getting the insurance? A.) We start the conversation. You share with me your wants and needs so I have a better idea of your goals. B.) I give you some proposals and illustrations, which we discuss in a follow up conversation. C.) You decide on the right products for you and your family D.) We start the application process which consists of: 1.) a paper application (done with me, or your agent), 2.) a phone interview with the carrier and then 3.) a medical exam which takes place at your home, office or wherever is convenient for you. Which by the way, this exam is complimentary and a $120 – $150 value…so even if you’re not sure you want the policy, at least start the process for the free exam! E.) Underwriting commences and an offer is made! F.) I deliver the policy to you.
This sounds like a lot and it is! It’s like I always tell my clients, look this isn’t an overnight process, but I do everything I can on my end to make it as pain and hassle free on your end. You just maintain patience and I’ll see to it we get you insured.
What advice do you give to families without insurance? It’s not good to have a family and be without insurance. You protect your home and car because it’s the law to do so. But before you go out and buy the latest fashion trend, eat in that delicious restaurant, buy yourself one more needless trinket or take that extra family vacation, make sure you’ve got some sort of coverage. It’s the responsible thing to do and your family will thank you.
How can people get in contact with you to ask more questions? For now you can find me on Facebook: @LivingWithEm Living With Em – Life Health Disability
Email me at Emily@voiinsurance.com or Just call/text me! 818.216.1170
Anything else? The last thing I’d like to add is, if you are considering life insurance, good on you. It doesn’t have to be through me, I’m just happy as heck you’re making this important decision. BUT I will say this, any broker or agent can quote you whatever sounds pretty, and looks good on paper, but it’s underwriting that ultimately determines your cost. I do a lot of homework before I ever offer a proposal, in order to give you the most accurate quote possible. Besides that, I’m a broker which means I work with literally dozens of companies, to find not only the best price, but the best product to suit your needs.
Next steps…write a will, set up a family trust.