3 Secrets About Life Insurance That Will Shock Millennials!
Insurance: Not Only For Auto And Home
L I F E…I N S U R A N C E…
What visuals comes into your head when you hear those two words?
I am sure it’s nothing that will cause you to jump out of your seat to enthusiastically call your local insurance agent about your premiums and how much you love it!
In fact, It’ll probably be the opposite. Why is that?
I mean, we understand the importance of it. We all can agree that driving without auto insurance or not having home insurance can not only cause us to run into issues with the law, but can also expose us to accidental risks that are out of our control…
And if there can be accidental risks that can happen to our home or car, don’t you think there also can be accidental risks that can happen to our health?
Do Millennials Need Life Insurance?
Don’t get me wrong, I also thought like most millennials about life insurance. “Life insurance seems like a responsibility for the future,” I would say to myself. “Plus I’m young, healthy, and don’t have any kids, so I don’t need it now, I can just wait ‘till I get older.” It wasn’t until I began to notice that it was brought up everytime I sat down with financial advisors that my view began to change about life insurance.
So being a finance junky I became curious about figuring out why life insurance was so important!
Life Insurance Is A Game Of Offense And Defense
I began to discover many good reasons why I should consider life insurance. Reasons such as:
- Life insurance can help protect co-signers of loans. Many Millennials have student loans and although federal student loans are discharged upon death, that isn’t always the case with private loans. If a parent or spouse co-signed the loan, they may be held accountable for the remaining balance.
- If you own a home, the insurance proceeds can help pay for home expenses.
- Life insurance can help your family replace lost income.
- It’s cheaper! Because you are younger and (hopefully) healthier then you will be in the future, life insurance may be cheapest now.
These findings among others really had me finally interested in life insurance; however, what had me sold on life insurance was when I heard it can be used to play offense and defense with my money.
All this time I thought life insurance was just a financial product that was useful when I died, but when I learned about the concept that you can also use life insurance to build wealth while alive, that was the game changer for me.
In fact, I reached out to a life insurance and living benefits specialist by the name of Trevor Mickelson to help me breakdown what life insurance is all about and how to play offense and defense with it.
Here are the top three secrets that I got from him:
3 Secrets About Life Insurance:
Secret #1: Build Cash Value
Offensive Strategy: Cash Value
In our interview, Trevor stresses the importance of building cash value. He states that Life Insurance, although NOT an investment, it’s an asset which, for pennies on the dollar, creates an immediate estate and can accrue an actual Cash Value.
Additionally, the cash value within a Life Insurance policy may be used for large expenses without applying for credit. Cash Value can serve as a down payment on a home for you, your children or grandchildren, as a business investment, or even cover expansion costs of your empire. It’s payout is limited only to the value within your policy.
Secret #2 : Guaranteed, Tax-Free, Lifetime Income
Offensive Strategy: Tax-Free Wealth Building
One of the things that really bothers Trevor, is that so many people focus on investing their money in the market or with banks where there’s so much at risk. “They put up 100% of their money with 100% of the risk and have to pay taxes and fees,” he says.
Whereas with life insurance, you could put as much money away as you want tax preferred, grow it tax deferred, create liquidity without paying taxes, fees or penalties, while creating a Guaranteed, Tax-Free, Lifetime Income! Wow!
Secret #3: Living Benefits
Defensive Strategy: Living Benefits
Trevor is really passionate about this secret of life insurance. In fact, in a blog he wrote, he said that 99% of Life Insurance companies do not offer True Living Benefits within their policies.
What is Living Benefits?
Living Benefits allows policyholders the ability to access up to 75-90% of their Term or Permanent Policy’s death benefit in the event you LIVE through a major medical event (think heart attack, cancer, or stroke).
The common thought about life insurance is that it’s a great product to help a family or take care of burial expenses if you die, but what if you had a life threatening incident but still lived? What if you’re in critical condition and cannot perform the basic tasks that are required for you to pay for your living expenses?
This was the case for Trevor. In the interview he talks about how his wife encountered a life threatening issue at the age of 26 and survived. But because he had a death only policy(which is a policy that pays out only when you die), his insurance company did not cover her living expenses. As a result, he underwent a very difficult and trying financial time that almost caused a divorce due to mountain medical bills and living expenses. However, if they had known about living benefits, they would have received up to $7,500 dollars a month for 50 months!
Life Insurance Is A Multifaceted Financial Tool
Having this interview with Trevor truly gave me an inside scoop into the world of Life Insurance. From the outside looking in it’s known to be a very unsexy and complicated financial product. But once you become an insider and truly understand how it works, its a financial product that can help you both build wealth and prevent financial hardship in the event of a death or life-threatening situation.
Liked this Blog?
Then stay tuned for the podcast release this week, where I have a great conversation with Trevor on how to play offense and defense with Life Insurance.
Curious for more insurance tips? Check out our previous blog titled, 4 Insurance Hacking Tips That Can Boost Your Insurance Score And Lower Your Premiums.
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