I have been in the insurance business for almost 30 years. I have written thousands of insurance policies for homes, cars, businesses, and more. I have also written hundreds of life insurance policies. They say that you aren’t a real-life insurance agent until one of your insureds passes away, and you have to deliver a check to a beneficiary. I have had to do this four times now. Delivering a life insurance check is the definition of bittersweet.
On the one hand, you are hurting for the family and their loss. On the other hand, you are providing more than “thoughts and prayers” as you are giving them the money that they need to replace income, pay for funerals, college educations, and so much more.
Here is a story about a recent experience:
One of our agents asked her sister if she had any life insurance. Her sister didn’t have any life insurance for her husband. Our agent was not life-insurance licensed, so I was happy to help her. I had the family complete a needs analysis to determine that she needed $200,000 of coverage on her healthy husband. The premium was only $20 per month. He was 50 years old and healthy. The life insurance company puts prospective clients through a paramedic exam and looks at all of your medical records to determine eligibility. Everything checked out fine.
Two years later, I received a text on a Saturday from my agent. “John, I hate to bother you on a Saturday, but can you check to see if my brother-in-law’s life insurance is in effect? He just passed away from a heart attack last night.” My heart sunk. I immediately stopped what I was doing and pulled up our system on my phone. Everything looked good, so the policy was in force. Thank goodness!
I felt awful for my client and their family as he was only 52 years old. Life can be so short. I filed the claim with the carrier, and they assigned an adjuster. The adjuster called the wife and gathered some information. The funeral home provided the death certificate, and the insurance company sent an overnight check for $200,000. She was paid within 48 hours of the insurance company receiving the death certificate. I have found this to be a typical experience, with insurance companies paying out verified claims promptly.
This story isn’t over, however, because the widow now has $200,000 in her checking account and doesn’t know how to best invest it, protect it, or grow it. Her husband handled all the finances for the family. She needs to make sure it is safe and provides income for her. She needs it to provide as much peace of mind for her as possible. She cannot afford to lose this money.
I asked her if she would like my help protecting that money; she said absolutely. Aside from paying the funeral home, the only other item she requested was a new car, as she drives 35 miles each way to work and her 10-year-old vehicle was beginning to wear down. A new vehicle would indeed bring peace of mind in safely getting to and from work.
After funeral expenses, a new car, and some other minor bills, she had about $125,000 left to invest and protect. She isn’t rich, but her kids are grown, and although this nest egg won’t replace her husband, it gives her peace of mind. She needs income from this money for the rest of her life, which is another area where I can provide help to clients in the form of an annuity.
In this scenario, if the widow invests $125,000, the insurance company will pay her a minimum of $6,567 per year, every year, for the rest of her life, even if the annuity returns 0% interest. If the annuity returns any positive gains, her annual payout will increase. If she were to pass away, whatever she doesn’t use is passed down to her kids.
Her husband is gone, but his legacy will live on in many ways, including through financial peace of mind for his wife and children. Thank you for taking the time to read this article. I hope it helps you and your family take action to protect the ones you love.
By John Darr