Last week was awkward. It was the first of several meetings with a lady who had suddenly lost her husband, and she’s looking for help and guidance. The harsh reality is that he died with no life insurance coverage in place.
That same week I had a meeting with another lady who had also lost her husband but was fortunate enough to have been the beneficiary of a large life insurance policy. Even in her case, that policy was scheduled to lapse less than 30 days from when her husband suddenly died.
I’ve seen it over and over again – widows left to deal with the unexpected passing of their husbands. They can be put into two camps: those who had a husband who loved them enough to make sure there was adequate life insurance in place, and those whose husbands, for some reason, didn’t have life insurance coverage.
As you know, I like to share with you practical tips regarding life, business, asset protection and investing. If you are a business owner, real estate investor or agent, or entrepreneur, you live in a world where if you don’t build it, sell it or run it, you don’t get paid. Well, life insurance is pretty much the same. You need to have it in place.
If you don’t have life insurance, you need to get it NOW! If you do have life insurance in place, you need to evaluate whether you have enough coverage. I don’t sell life insurance, so I’m not going to make any money from promoting this, but I recently increased the amount of 10-year level term insurance that I carry for several reasons: the cost of living continues to go up; I have one or more elderly parents who depend on me; I have employees who depend on me to have a functional, viable business or a transition plan if something happens to me; I have a spouse and I have children.
Those same reasons may apply to you. It may also be that you have accumulated a lot of real-estate-related debt, and you may be the person who is best at managing those assets. Your survivors and heirs might not be, so leaving behind a life insurance policy with adequate cash in order to reduce or eliminate that debt so your heirs can manage it would be a prudent way to continue your legacy.
In the current economic environment, certain types of life insurance are as cheap as they’ve ever been, especially level term life insurance like what I have. This isn’t a campaign in favor of one type of insurance over another, and I’m not interested in getting into long debates with anyone about that. The important thing is that everyone needs to have enough life insurance in place NOW.
I paused just now to replay the two scenes from last week. One lady looked at me and said, “What do I do with this money?” The other looked at me and said, “What do I do now? I have nothing.” Neither conversation was easy, but one was certainly much more difficult than the other.