Aaron Clark, a Sales Executive at OCI, is a strategic partner for Farmers Union Agency. Aaron is an expert in life insurance and works closely with FUA agents and clients that are interested in life insurance coverage.
Sandy Shapiro, Director of Sales – Health & Life at Farmers Union Agency, sat down with Aaron to discuss the most common questions people have about life insurance:
I have life insurance through my work, why should I purchase more?
Aaron: The average person switches jobs about 7 times in their working life. Some companies don’t offer benefits so if you switch jobs, you may lose benefits as often, they are not portable (meaning you can’t take them with you). When it comes to life insurance there is one thing that we always need to keep in mind and that is our “insurability”. In other words, how healthy are we? The healthier we are, the less we pay for life insurance. If you are unhealthy, you may not even be able to qualify for it. So, you go out and try and buy more from an agent and learn that you cannot because your health change made you unable to qualify. This is the #1 reason I believe you should never count on your group life insurance through work. Get coverage outside of work and you will have tremendous peace of mind, you will have your insurability protected!
I don’t know where to start in determining how much life insurance I should own. What’s the best way to decide this?
Aaron: An experienced life insurance professional will help you determine how much you need/should own by taking you through a discovery process. This is simply analyzing your current situation and needs. He/she will look at your assets and liabilities, goals and objectives and from there help you determine how much you need. Having said that, I’ve always have the mindset of, “don’t buy how much you need, buy how much you can afford”. We don’t know what our health will be like tomorrow and nobody has a lease on life. Therefore, I have always been a big believer in over insuring when it comes to life insurance simply because I know the way it works and the financial leverage it creates. Not to mention the peace of mind it creates for the family. I’ve always slept good knowing that if I don’t wake up tomorrow, my family will be just fine, financially.
Does my spouse need coverage?
Aaron: Yes. I believe in all circumstances, yes. If you are a dual income family then it is extremely important because if one spouse should die, their income would be gone. At the same time, my wife is a stay-at-home mom. There is no income that can replace what she does for our household. If something had happened to her while our kids were young, I would have to take time off work and would lose income due to that. Changes would have to be made, day care, etc. Even as the kids have gotten older, I still have value in life insurance for my spouse because for both of us (and many others like minded), it is important to me to leave a legacy to our kids and grandchildren. Life insurance is exchanging pennies for dollars, and it is very financially justifiable if you look at it through the right lens.
I’ve heard it’s a hassle applying for life insurance. What’s the process like?
Aaron: Times have changed! I recently had a client apply for life insurance and was approved within 4 hours through automated underwriting. This does not happen every day, but it should help dispel the myth of buying life insurance is a hassle! Ever since COVID, the insurance industry has made significant changes to streamline the process and make it easier. For example, there are some carriers today that will issue up to $1.5M in coverage with no medical underwriting (if you are relatively healthy). For people who are not as healthy the only hassle is sometimes getting medical records. The good news is most carriers have found ways to be more efficient at this and speed this process up as well.
Life insurance is confusing. So many kinds of coverage. How do I know what’s right for my family situation?
Aaron: Coming home from the funeral, nobody is going to ask what type of life insurance you had. There are several different types and ways to buy life insurance but the most important thing to do is buy it when you are young and healthy. But even if you’re not young, it’s not too late if you are still in relatively good health, just may cost a little more than it would for a 25-year-old. It is crucial that you work with the right agent that can not only provide you with different options as well as different carriers, but also help provide you with guidance. A good life insurance trusted advisor will know what questions to ask you to determine what he/she will recommend. At the end of the day, it will normally come down to your budget. Having said that, having any kind of life insurance is better than having no life insurance.
For more information on life insurance please contact your local Farmers Union Agency agent today!