Monday, April 30, 2012

Why 20-30 year olds NEED life insurance - written by Daniel Harper


Why 20-30 year old's NEED life insurance:
 written by Daniel Harper:
4/30/12

I took a lot of time when creating this blog article. (My first by the way).
 I have learned a lot in my journey towards bettering my knowledge of insurance & the products that I deliver & work with on a daily basis.
Let’s stop right here and just get it out there…
Insurance is NOT the most fun topic around the dinner table. A lot of insurance can be considered to be a lot like the boogeyman. I talk daily about the “what if’s” and all of the different possibilities that COULD happen to us. In most cases, we will hopefully never experience any of the purposed situations, but what if… it DID happen?

I wish I could say that I have never experienced a client calling me back and letting me know about an unfortunate situation while being an Allstate agent.
The truth is, it does happen. I know first hand the financial hardship that it can cause. (Small example:  I hit a deer last November on my way home from work and racked up over $3,000 in damage to my beloved Nissan Altima). Fortunately my dad has been an Allstate agent for 30 years and had the proper protection in place to take care of everything.

My focus in this article is something much larger. How much larger? How about a million dollars…. Do I have your attention now?


I have this conversation daily… "Why do I need life insurance?".
On the surface, I suppose this question holds some merit. What is there to protect? Who are we saving from heartbreaking financial tragedy? There's no spouse, no mortgage, no kids, no large bills to leave behind, should you die.
 Many 20-somethings find themselves thinking that retirement is a long way off. So far off that they think that they shouldn’t have to think about it now. Some of them even believe that they are invincible. They graduate from college, get a good paying job, and with no family to take care of, they tend to think that the only person they have to worry about is themselves. This is where they do not use good judgment. Although it may sound morbid, the fact of the matter is whether you have a spouse and/or children there is ALWAYS someone to worry about. What happens if you get into an accident tomorrow and die? Who is going to repay the $50,000 you borrowed to get your education? Who is going to pay for that $40,000 car you bought when you got that good job? What about all of the credit cards you ran up in college? Your parents or someone from your family is always left to take care of those things. Do your family a favor and get a life insurance policy now while the rates are excellent for you.

There is a concept in the insurance industry called "Adverse Selection". It means that a person waits to purchase insurance until they really need it. Imagine only buying health insurance once
you've been diagnosed with a terrible disease. Of course, that is the least desirable time for an insurance company to take you on as a client. If you're fortunate enough to even find a company that will insure you at that, you can believe that your premiums will reflect this fact. Expect to easily pay 3, 4 even 5 times the amount than if you were in better health.

A major problem with most of us is that we are constantly planning for the next big thing, but we fail to prepare first. We live in what they like to call the “microwave age,” or the “fast food age.” We want everything quick, fast, and in a hurry. Sometimes even fast is too slow because we want everything NOW. (How many times have you sat in a drive thru line when you can look inside and see an empty counter?) We’re constantly on the go, and we do not slow down enough to think about the consequences of what we are doing. So, the main reason why you should get life insurance is so you can be prepared for the unexpected.

You need life insurance to protect your loved ones. Life insurance is actually not for you but for them. Think about it this way. The term “life insurance” is misnamed because you are not actually insuring your life. You cannot “insure” your family that you are going to live until you can afford to leave them something behind. I think it should be called “Family Protection.”

Unless you have lived a privileged lifestyle, you will have debt when you die. Your family will already be hurting because you are gone, so you do not want to add more burdens on them by leaving your debts. Life insurance is one of those things that only matters when you need it. In fact, most of my friends don’t have any type of life or disability insurance outside of basic plans offered where they work.

In my experience I’ve had two friends who have been diagnosed (and luckily recovered) from life threatening diseases. Neither of them had life insurance; creating a lot of anxiety about what would happen to their families’ finances if they passed away.

So the Million dollar answer is this; you can eliminate all of these worries. What if I told you it was possible to have a policy that offered a $1,000,000 check straight up to your loved ones if you passed away?

 What if I told you that same policy was in your price range, and well under $100 every month? (talk about leaving a legacy... and YES you can purchase a policy that isn't quite so large I.E $10,000 death benefits and up, find what works for you.)

 In my life, I can't afford to NOT have life insurance. With two small children to put through college, & an entire life left to live.
Question- "How much life insurance does a 25-year-old need?"
Answer- "As much as you can afford".

- Daniel Harper - 4/30/12 danielharper@allstate.com 434-974-9762

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