Die to Win?
BY THOMAS P. SMITH JR.
EXECUTIVE VICE
PRESIDENT
(AGENCIES AND MARKETING)
S
omeone recently said to me, "Why should I buy life insurance? It only has
value if I'm dead." I thought I would use my column this month to share my
answer to him with you: "Hold on a minute, big fella," I said. "Did you
just say that it only has value if you die? I know we are both in a hurry,
but take just a moment to listen to me. |
"First of all, that's simply not true. You see,
we suggest that every member of the Knights of Columbus own permanent,
cash value life insurance. Unlike term insurance, which carries an
expiration date and is meant to cover a temporary need, permanent
insurance lasts a lifetime. I can see in your eyes that you're thinking
that somewhere, somebody told you something bad about permanent insurance.
Look at me. I wouldn't lie to you.
Permanent life insurance,
in addition to
providing a
death benefit, builds value. "There is nothing bad
about permanent insurance. There is nothing bad about it being there and
having value when you die. To be brutally honest, that's the whole point.
I enter into the sale of life insurance based on an assumption that the
person I am dealing with loves his family. That assumption leads me to the
conclusion that you don't want your final act on earth to be leaving them
in a difficult financial position. I hope I'm right about that. |
"But to your point: Permanent life insurance, in addition to providing
a death benefit, builds value. In your case - as a 45-year-old man in
excellent health - you could buy a $100,000 whole life policy with a
disability waiver rider. When you are 70, for example, this policy, as
illustrated today, including non-guaranteed dividends, would have a cash
value of nearly $76,000. You would have paid in premium a total of
$43,486... and we would have available to you nearly $76,000. Nice, huh?
And you're alive! "So, you decide to take these values and provide
yourself with a retirement income. The policy will pay you, guaranteed
every month, $542. While you're alive. And this is what we would call a
'ten year certain,' meaning that if you do die, we'll continue to pay your
beneficiary that amount until 10 years has passed."
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