Comprehensive Financial Planning

Can you keep a secret?  Here it is: I’m a financial planner who hates life insurance.  It’s true – I do!  I don’t like paying for it for myself; I don’t like talking to my customers about it.  I don’t like owning a product that I will never directly benefit from, and I don’t plan on dying just to make sure my family gets the benefit of the life insurance plan I’ve got set up.  I’m not going to burn down my house to get my money’s worth out of my homeowner’s policy.  I know life insurance is necessary, but that still doesn’t mean I have to like it.

To my chagrin, the demands of delivering comprehensive financial planning to my customers compel me to work with life insurance.  Just because I don’t like it doesn’t change the fact that my customers have it – and too often, what they have is bad.  I see the following situation over and over again: my client was sold an overpriced whole life insurance plan back when they were in their 20s.  They got sucked in by some family friend who was just trying out the insurance business and really needed a sale.  They know they got suckered, and now they are forever soured on the idea of having life insurance.  They hate it.  (Hey, we have something in common!)  They have one bad experience and they lose sight of the fact that life insurance is a tool.  And it needs to be used for specific purposes only.  It needs to be used to ensure your family is taken care of when you pass away.  It needs to be used for estate planning in many cases – it’s better to pay 10% of your nest egg to a life insurance company than to pay half to the federal government.  That’s just smart math.  Life insurance isn’t inherently evil, but it is necessary.

Comprehensive financial planning respects that fact that having an insurance plan is a responsibility issue.  Most life insurance salespeople view it strictly as a moneymaker for themselves – they want you to invest in life insurance for everything!  Lots of life insurance for lots of different things in your life – that’s the approach of a typical life insurance salesperson.  A lot of those plans are deliberately designed to maximize your costs while minimizing the death benefits to make the most money for the insurance company.  What you need is a coach who can recommend appropriate amounts of insurance in wise places.  And think about it – maybe it’s best to get it from somebody who doesn’t actually like selling it himself!