What Are Your Greatest Risks? One Family's Story

by Jeff C. Johnson

Young couple

Everyone has risks, some that cannot be avoided and some that can be offset. Sometimes financial risk is expensive to minimize, but sometimes it’s a bargain.

A financial professional for over 35 years, I continue to accept new clients when I know I can make a difference for that person or family. I use my “Eight Points” mental checklist when I meet with clients.

A decade or so ago, I met with a young couple, both of whom were working. They had young kids and were doing OK financially, but certainly not “rolling in the dough.” Not long before we met, they had both changed jobs, and they transferred retirement plan balances with their old employers to IRAs with my office. As I went through my mental “Eight Points” checklist, I asked them about and discovered their lack of life insurance. They really didn’t want to buy any life insurance but were willing to listen to my suggestions.

Among other recommendations, I connected them with a life insurance sales professional. Patiently and persistently, he explained why they needed life insurance. Ugh! Who wants to spend money on life insurance when you’re young and healthy?

Eventually they realized that, due to their age and health status, they could both buy one million dollars of low-cost, term life insurance for a small amount of premium compared to the total benefit payable if either of them were to die prematurely.

When the still-young wife discovered a terminal illness, they battled as long as possible. Eventually she had to leave the workforce, still trying treatments but unable to work. Cash was running low. When they called me needing money, I remembered they had added life insurance to their financial portfolio. But what good would that do them now?

Well, the agent had added an “accelerated claim” option to their policy that permitted them to access a big chunk of the total future death benefit in cash right away. They would not have to sell the family home or spend down retirement or education funding accounts, adding financial woes to their already heartbreaking situation.

Have you assessed your greatest risks? It’s point number three of The Eight Points of Financial Confidence.

Young families should know that there are few excuses for not having enough term life insurance in place to care for family and surviving spouses and to pay off loans and expenses. Why not find out how much it would cost (actually, find out how little it may cost!) to adequately insure your family against your premature death?