In a single day I came across two articles that seemed completely unrelated until I reflected on what I had read. The first was entitled “The Top 10 Things Americans Waste Money On.” That article was fun to read—a guilty foray into the luxuries that many people take for granted, spending hundreds of dollars a month on take-out coffee drinks, hundreds a year on tobacco products, and $2,619 dollars a year on food eaten away from home! With the limited amout of savings that most Americans have accumulated by the time they reach retirement age, it is easy to see that we have become our own worst enemies.
The second article was entitled “Life Insurance Coverage at All-Time Low,” and it had a more serious tone. It covered the fact that a third of American families have no life insurance and nearly two thirds admit they should have more. So, why don’t they have more? Because nobody is telling them to get more… period. They know they need it, they know they waste money every month buying the luxury items mentioned above, but nobody is telling them to be responsible and get coverage or get more of it. So they continue to have inadequate life insurance coverage or none at all, despite the fact that it is easier than ever to obtain life insurance and less expensive than it has ever been.
Right now, as I write this sentence, a father is dying prematurely somewhere in the United States without coverage. His family will suffer unimaginable emotional devastation after he dies. While they are coping with the loss of their father or husband, the family will also have to deal with the fact that a major income stream is gone. In addition to losing a family member, they lost the income stream that paid for the house they live in, the car they drive, and the college they had always dreamed of attending.
Here’s something to consider: today a relatively healthy 35-year-old man can get $500,000 of life insurance coverage for less than $15 per month. You read that right—a measly $15 per month. That’s the same amount he might pay for two of those ridiculous drinks at Starbucks. With a $500,000 death benefit, that suffering family could have paid off their $175,000 mortgage so that the kids could continue living in their home. They could have paid off their $30,000 car debt and eliminated those stressful monthly payments. They could have banked $100,000 to ensure that both kids would be able to attend college in a few years. And they could have had another $195,000 to pay bills as they try to get past this awful event. Instead, they will have nothing.
This article isn’t a scare tactic. It’s an accurate description of an event that just happened and will happen several more times today alone. If you are an advisor, you have chosen an incredibly important career. It is your responsibility to ensure that no family suffers this loss while you are their advisor. Take time to touch base with every family that you serve and ensure they have protected themselves. If you don’t do this, who will? The sad part is that many of the advisors reading this article haven’t even done the same thing for their own families. Brokers Clearing House is here to help if you need us.