Monday, August 11, 2008

He rises!!!!! 
Yes, it's been some time! So to the few people who still check in regularly, thanks very much for your patience! All is very well here. Here's what's up in my world:

Longtime readers know of my longstanding interest in financial planning and financial services. And most readers who've been reading lately know that I have been appointed as an insurance agent. Here's the deal:

I love it.

I love the freedom. I love being my own boss. I love solving problems for families. I love sitting down at kitchen tables and at closely held businesses and solving problems for families. I love the feeling I'm building a practice. The people I work with have been fantastic. The support I get is out of this world, as is the quality of the training I've been getting, both in terms of planning knowledge and expertise, product knowledge, and sales techniques. And let me tell you, sitting at a table with a young couple with no insurance, and looking across the room at two happy children, and working with parents to make sure they're protected against death or disability of one or both parents is truly a labor of love.

I didn't realize how much of one it is until I had brought a couple on board with two young girls, and I was going through the tedious process of preparing the paperwork the next day, and I wanted to get everything right, because all I could think of was the faces of those two girls. This is truly a noble profession, I think, and my only regret is that I didn't do this sooner - some friends have recently become uninsurable because of medical problems such as cancer and a car wreck. One former colleague from the marketing/pr world, is in a nursing home at the age of 32, right now, following a car wreck over memorial day weekend. (I didn't find out till I called him to invite him to get a beer.)

Another friend's brother had a stroke at the age of 29. That was last February. Knocked him out of work for months, and even now he's at a reduced capacity. My own sister, 22, was hit by a car, and injured last month, and knocked out of work for weeks and perhaps months. If I were already working, I would have been able to get a disability plan in place for her.

As another friend put it, I'm in a race against the devil.

So I've been putting in a prodigious amount of hours lately. Between the National Guard and the insurance practice, I've just been going flat out. And so the blog life has suffered.

On the other hand, I'm building a practice, and that's pretty exciting. But like anyone else launching a business from scratch, the time commitment to do it right is extreme. And because I'm with a major company, a lot of marketing support and logistics is already there for me to tap. I don't have to reinvent the wheel. And it's STILL overwhelming. Exciting, but overwhelming.

Anyway, all is well, and as I have time to post, I will. When I do post, though, I start feeling guilty. Because I should probably be working.

That's not a bad thing for a first year agent, though. It's a tough slog just starting out, and the only thing that will get me over the hurdle will be hustling.

My clients aren't rich. But I don't need rich clients to be successful. I do, however, need a rich schedule!

All the best, and thanks for reading!

Splash, out


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As they say in my neighborhood, mabrouk!

You know, the thing that finally drove me to get the hell out of First Command was when the guy (straight out of retirement, did his training during terminal leave, yeah they know their way around military) tried to push hard to do life insurance on a new kid.

Waitaminit. Kids are financial liabilities, not assets. He was not even trying long term care or something.

So, yeah. Good to have a good one out there. Fight the good fight.
Good luck!
Hmmm. You are correct: Unless your kid is Milie Cyrus, most of them represent liabilities, not assets.

But the First Command guy wasn't neccessarily all wet. Here's why you might want to get insurance on a child:

1.) To lock in insurability. A child may be healthy now, but unable to get insurance later in life because of late onset health problems, or an interest in a dangerous job, such as private aviation. If there is a family history of hereditary medical problems that could affect insurability later, I'd suggest locking in some coverage, with a rider that guarantees the ability to purchase insurance later. I'm no expert on that particular subject, but I'm thinking diabetes and things like ovarian or cervical cancer, which frequently affect women in their 20s, and could affect insurability for good.

Since kids might not have to go through underwriting if parents are insured, you might want to lock that in. It's very cheap. Some companies - mine included - include a basic amount for children at no additional cost, if mom and dad are insured together. (The more kids you have, the better this deal might be.)

2.) A whole life plan for a young child is dirt cheap. If you're in a position to overfund a life insurance policy and get some cash value built up, that's better than a sharp stick in the eye, for a couple of reasons:

a. After 18-24 years, there will be a nice little sum of cash built up that can be accessed tax free for school, wedding costs, or a down payment on a home. Technically, it's a loan - that's why you can get at it tax free. But it's a loan that doesn't have to be paid back: You are borrowing against your death benefit. Since the insurance company knows death is a certainty, it's the safest loan anybody can make!

b. I don't have illustrations to look at right now (I'm reinstalling a POS operating system called Vista on the PC I had to get to run the proprietary illustration software). But a 3% IRR on life insurance in a par policy, TAX FREE, is more than competitive with other conservative investments in taxable accounts. Remember, we're talking fixed income instruments. A lot of people got stupid, illustrating 10% and even 12% in a side fund. That was ridiculous. It's a solid return for risk free money...and anything over $100,000, I'd rather have a solid life insurance company with strong ratings than in a bank operating on a flimsy 4% capitalization ratio, upside down on its recent real estate loans, + FDIC. FDIC only covers the first 100k of principal, anyway).

Compare and contrast, for example, the number of banks which have gone belly up over the last 50 years, compared to the number of life insurance companies. Then stop to consider that even the life insurance companies that got shut down paid all their death claims.

c. Here's a corner most people don't see around: When it comes to making calculations for federal need-based financial aid for colleges, assets in Coverdell accounts and assets in 529 plans count against you.

Cash value in life insurance policies (and in tax-deferred annuities) are NOT counted as available assets for the purposes of determining eligibility for need-based financial aid. (State and individual schools may have different criteria, but the FAF rules still apply for Perkins loans and the like!)

3.) A family just wouldn't be able to scrape up whatever it would cost to bury a child. This is a tough thing to talk about... and I get upset just sitting here writing this. But it's my job to think of these things - and give the parents the option to make an educated decision.

Can I go through this and explain EVERYTHING in the time available in an appointment? No. But I if I can do it without spending any additional money, I do my best to configure things so that my clients have OPTIONS later.

Is it likely the First Command rep fully understood all this, as a brand new guy? Dunno. Depends how much time he spent doing his homework!

But depending on the circumstances, I would also consider suggesting a policy on a child. But except maybe in special cases, only AFTER the proper amount of protection was secured to replace the incomes of the parents.

It's not a one-size fits all answer. Your family's going to be different than the one next door. And the financial media is worse than useless at understanding it.
Oh, yeah...I would probably prioritize LTC ahead of life insurance on a child, most of the time (depending on what's already in place, or available at cut rates through an employer, existing health conditions, family history, etc.).

Probably not all the time, though. The media is fond of "one-sized fits all solutions," like "buy-term-and-invest-the-difference" X is always better than Y. That's retarded.

What's best is an experienced and thoughtful agent whom you trust, who asks the right questions, and has access to a reasonably broad array of products, who takes time to understand your needs.
True indeed. This guy didn't know us from Adam, didn't know our medical history, but did know we've got enough petty cash to deal with mildly expensive contingencies.

Friend of mine decided to hang out a shingle as a CFP after retiring from the Nav; he was aghast at the quality of the advice he was hearing people were getting.
i'm just really glad there are people like you in this world looking out for the rest of us. :)
Wishing you lots of luck in this endeaver, but i know for a fact that you'll do quite fine Sir, after all, your reasons for this line of work is a noble one... out of love, and i'm sure that God is quite happy with you. May he bless you and help you to reach many, to change their lives for the better. :D
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