By Yolie Aleman-Rodriguez
More often than not clients and policyholders will let me know during our initial meeting that they already have their life insurance needs covered through work.
They feel confident and secure that they have checked the correct box of life insurance during their initial human resources meeting.
An essential practice of our discovery process is reviewing any and all insurance our clients possess, which opens up the conversation about the importance of owning permanent insurance outside of work instead of only owning term insurance through an employer.
The average American will hold at least eight jobs during their lifetime and the term life insurance benefit provided will most likely also terminate when the decision to part ways is made. Because of this, it is important to separate the employment insurance from personal insurance. It makes sense to view an employer life insurance benefit as a bonus gift, not the main source of protection for beneficiaries.
Some of the key benefits of owning a Whole Life insurance policy early in life is that premiums will always remain the same - even as clients move into their golden years. The younger and healthier a person is, the better locked and permanent rate they’ll receive.
Guaranteed For Life
Equally as important, the death benefit is guaranteed for life. This type of policy also provides its owner the flexibility to access the accumulated cash values at a tax-free rate. It’s an excellent feature to count on when unforeseen expenses or emergencies threaten our financial stability.
In essence, one can borrow money from their own policy with an option to pay back at a low interest rate. The dividends, which are considered “living benefits” for the owner, are an added advantage.
The Term Life policy is just that – a promise to provide benefits to your beneficiaries upon death if it occurs during the contract’s time frame. None of the other added benefits discussed above are included within the Term Policy.
Most of our retired clients express frustration when they confide that they were paying on a term life insurance (contracted term) policy for many years and terminated that policy due to the unaffordable renewal rates.
Others find themselves in their late 60s without their employer life insurance benefits. It’s costly to secure a permanent life insurance policy during the golden years, especially when health issues are involved, as we are closer to the end of the life insurance mortality tables.
One of the best and most important questions to ask your clients when deciding upon life insurance is, “Do you want protection for your family for as long as you live, or for as long as they live?”
If the answer is to protect both, then Whole Life insurance or a combination of the two will be their answer.
Yolie Aleman-Rodriguez has been with State Farm for 26 years. She is a qualifying MDRT member and currently leads as MDRT Client Acquisition Chair. In 2006, Yolie co-founded and became president of the National Hispanic Agents Network (NHAN) at State Farm Insurance, which now consists of over 500+ members nationally.