Whenever I speak to people, both current clients and prospects, one of the main deterrents to them either purchasing more insurance or buying their first insurance policies is the price. When we engage in a conversation about the face value of a policy that they may want to consider, I can always sense a little hesitancy when the issue inevitably turns to the monthly premium.
“That’s a little high”
“I don’t know if I can afford that”
“Why does it cost so much?”
These are some of the typical responses I get after quoting someone a monthly premium for a certain amount of life insurance. With such reactions, the natural question would be, are the rates really that high? Of course, this will depend greatly on which income bracket you fall under. What may be high for one person could be considered very affordable for another.
From my own perspective, I would say that it is highly probable that a large percentage of my clientele on the east side of Detroit lives paycheck to paycheck and, as such, missing just one paycheck could bring themselves or their families financial difficulties. But this only one possible reason why people may believe a certain insurance quote could be expensive.
Another reason is their age. In a recent request, one of my clients, ‘Katherine’, considered purchasing a life insurance policy because her younger brother had recently died. At that point, this client only had renter’s insurance which covered the contents of her home in the case of fire or burglary. Her brother was only 58 years old when he died. I didn’t delve his cause of death was, but as requested, I began to look into what type of premium she might be looking at if she decided to buy the insurance.
After playing around with the numbers of a few policies that I thought may benefit her, I shared my findings with her. Sharing these numbers with her on the phone, I was met with several seconds of silence. “Umph. Is that what I would be paying every month?”, she asked. “Do you think these quotes are high?”, I asked. “They’re higher than I expected,” she replied. I told her that I didn’t know what her budget was but that she must keep in mind that she was 61-years old. Had she purchased this same policy in her twenties, or if she were in her twenties now, the premiums would be significantly cheaper.
Considering her age, I already knew that there were certain policies I wouldn’t even try to look up because, at her age, there were certain policies that simply weren’t applicable. As she was already 61, I couldn’t offer her a Paid Up at 65 (years old) policy because 55 was the oldest a person could apply for this particular policy. She also didn’t qualify for a term to 65 because the maximum age for this policy was 44.
Even though both the Paid Up at 85 and the Whole Life options would most likely be policies she would be paying for the rest of her life, the Whole Life policy was actually slightly cheaper. One of my favorite insurance products, 20 Pay Life, was actually more expensive than both the Whole and Paid Up at 85 options.
20 Pay Life is actually one of our most popular policies as it is a mix of term and whole life policies. It has a 20-year term but covers the client for the rest of their lives. This is a policy that I recommend for many clients but its prices aren’t as advantageous once clients reach a certain age.
Once again the age factor.
A mentor of mine often says to clients that he recommends buying as much insurance as you can as young as you can. With age, our health can often be compromised by a number of debilitating ailments, injuries and diseases, the latter of which makes a large percentage of the population riskier clients for companies to cover. For black males and the black population as a whole, this becomes an even greater challenge.
As I pointed out in a previous post, in every age bracket, whether due to violence or health issues, black men and women are more likely to die than women and men in other racial groups. For this reason, black folks need to get beyond the idea that they don’t need life insurance because these statistics won’t apply to them. To be truthful, the numbers show that an early death won’t strike most black men or black women, but of the men and women with higher probabilities of passing away within each age range, males and females in this racial classification are more likely to be the ones that come to an early demise.
Of course, I wouldn’t wish an early death on any one, but I also believe in not leaving this burden on those we love who must deal with our untimely passing.
If any of this makes sense to you, don’t hesitate to contact me.