SATURDAY, MARCH 3, 2018
JIM: September is recognized as Life Insurance Awareness Month and in honor of that, we’re having the CEO, Marv Feldman, of lifehappens.org to share some perspectives that might change the way you think of life insurance. Welcome, Marv.
MARV: Thanks, Jim.
JIM: Hey, it’s great to have you on again and with September being Life Insurance Awareness Month, you’ve become a perennial guest as CEO of the LIFE Foundation, which is a life insurance foundation for education, and I think we just went through a name change where now it’s Life Happens. Is that right?
MARV: That is correct. What we found was most people, even though we were the LIFE Foundation, thought of it as Life Happens because that’s what our website says so we decided to rebrand and become Life Happens because that’s how people think of us.
JIM: That’s awesome. It wasn’t so long ago that LIMRA did a study of Americans and really Americans are in crisis. They talk about the amount of Americans a few years ago that don’t have proper health insurance, when you look at the people that don’t have proper life insurance, the numbers are even more staggering. A lot of people have a misconception that life insurance is too expensive, especially the younger people with the young families that really need it. How would you respond to that?
MARV: The statistics that LIMRA put together in conjunction with Life Happens in our barometer study indicate that there are some serious issues out there with the consumer. About 30% of the U.S. population has no life insurance of any type. That’s group insurance, personal insurance, term insurance, permanent. They have nothing. We also know that in the age group 25 to 64 that less than one-half of that age group have any life insurance at all. Those that have it only have about 3.6 times their salary in life insurance so the question becomes if something happened to them and they die, they’ve got enough to replace their salary for a little over three, three and a half years. What happens after that? Do they expect the family to go to work? What’s the plan? The problem is there is no plan in most situations so we try to educate the consumer about how life insurance works, about how cost effective it is and the fact that you can buy a reasonably sized life insurance policy for less than what it costs for one latte per day for a young person.
JIM: That’s amazing. I’ve been in the practice and I hate to admit this but over 30 years. As I look at the premiums, I think back to the first policy that I bought when I first got married and started having a family and we purchased the life insurance and I remember it was kind of a burden. I look at the premiums. It was almost like every time I’d quote somebody, there was a new readjustment of the rates and when we see everything else going up, the one thing that hasn’t gone up is premiums. Can you maybe explain to our audience why that is?
MARV: Once you buy the life insurance, if you’re buying permanent life insurance, you’ve locked in your premium for the rest of your life. If you’re buying term insurance, you’re locking it in for a specified period of time but what’s happening in our industry is that the mortality, which is the death rate, of the individuals is improving so the actual cost to provide the death benefit is going down because people are living longer. It’s going down because companies have become much more efficient in the design and in the administration and in their investment portfolios so all of those factors combine to drive the cost of life insurance down. I think – I could be wrong but I think – that I read somewhere or heard an executive somewhere say the cost of term life insurance today is less than half of what it was for the same policy 20 or 25 years ago.
JIM: I know my personal experience would find that to be true. I’m sure that it’s got to be somewhere in that ballpark. Let’s switch gears here a little bit and let’s talk about September is Life Insurance Awareness Month. A lot of times, people look at what it is. I’ve heard people refer to I don’t believe in life insurance and I had a friend tell me that’s good because life insurance isn’t a religion so let’s talk about what it does. This month’s spokesperson I think is somebody that everybody would be familiar with or this year’s spokesperson for Life Happens, very famous person. Who is that person?
MARV: That’s Boomer Esiason, who was a star quarterback for the Cincinnati Bengals, and he was our spokesperson last year. He did so well that we had many companies and people that came back to us and said is it possible to have Boomer as a spokesperson for a second year, something we’ve never done at the LIFE Foundation at Life Happens. We went back to him. We asked. He absolutely jumped at the opportunity to continue as our spokesperson because he is such a strong believer in the need to take personal financial responsibility and use the products and the planning that’s out there and available for people.
JIM: That’s awesome and he’s also, I think he’s one of the national broadcasters for the NFL to this day. I know all the people you’ve had as national spokespeople, they’re all people that the general public would recognize. I think what’s unique about the spokespeople you have, I see a lot of pitchmen, so to speak, that are selling products but what you have in your spokesperson is someone who has a real-life experience that makes it so much more powerful.
MARV: Absolutely correct. His mother died when he was very, very young so he grew up in the family with a father who worked very hard and had to commute back and forth into New York City so he spent a lot of time by himself or with siblings. It just became very apparent to him that if they had had life insurance, it would have been so much easier for his father to raise a family so he’s a strong believer. He owns substantial amounts of life insurance himself. He’s using the same planner agent that he’s been using since he started in the NFL 20 some years ago so he is a very, very strong believer in owning what he says other people should own. He does it himself. He’s just such a magnificent spokesperson. He’s so passionate about what he does and what he says.
JIM: What’s so interesting about that, being a practitioner myself, how many times I come across a family where one of the spouses and typically it’s the wife that stays at home to raise the kids and in Boomer’s case, his mom was raising the kids. A lot of times, families will look at that person and say well, they don’t have a job so what do we need life insurance for but I’ll tell you what, you ask a stay-at-home parent whether or not raising kids is a job or not and the economic impact that that can have to a family if that person were to pass away untimely, it’s huge. Share a little bit about that.
MARV: The government just this past week released some new statistics on what it costs to raise a child to age 18 and for a middle-income household, the current cost to raise a child without any college funding is $245,000 so when you have a child, you’re talking about spending a half a million dollars just to get them to age 18. Forget the fact that it costs another $100,000 or $200,000 or $300,000 to get them through college. When you look at that and you say well, if the spouse is not there even though he or she wasn’t generating an income, now you have to replace all the services and duties that that stay-at-home spouse was doing and there are some studies out there as to what that number is and it also is worth several hundred thousand dollars over that period of time so you’re talking about a substantial loss to a family for the loss of a stay-at-home mother or stay-at-home father. That has to be replaced. You start talking about somebody to drive people around. You talk about all the laundry, all the cooking, all the cleaning, all the services that a stay-at-home spouse provides and it’s a staggering amount of funding that’s required to replace that.
JIM: Now I understand Life has implemented a new strategy. How will that impact consumers for obtaining information from your website, www.lifehappens.org?
MARV: We did a new strategy this past year and implemented it through the year and in February of this year, we launched a brand new website, same URL www.lifehappens.org, but what we changed is we made it much more user friendly so when somebody goes onto our site, the first thing they see is something called Insurance 101 and if they click on Insurance 101, it will walk them through step-by-step to determine if they need life insurance and then take them to a calculator to determine how much life insurance. They can also study and learn about what type of life insurance and then work with an advisor or an agent to help them plan and put that into effect. It’ll give them all the numbers that they need and all the background information and there’s now digital downloads available for the consumer where they can go in and download brochures and fliers and other types of things that they might want to read and study that used to have to come to them through the mail by an agent. Now they can just download it directly. We’ve made it simple for everybody is what we’ve done, Jim.
JIM: Now with all these tools that are available and I’ve seen other online tools, I already have a strong opinion about working with an advisor but why does someone even need to use an advisor if all these tools are available?
MARV: Let me give you an example. I had somebody that called me the other day. They had gone online to do all their research, which was great, and then they went online to try to get the quotes and they got their quotes but then when they applied for the insurance, they couldn’t get what they thought they were going to get. They assumed that they were in good health but when the medical reports came in, they weren’t in good health. They were in good health compared to other people in their same situation but compared to the general population, they had high blood pressure and some other issues that had to be dealt with. When you’re working with an agent, a professional full-time career agent, they can look at these types of things, pre-evaluate and help the client walk through the scenarios of what may or may not be realistic and also help them in the underwriting process in choosing the company and working with the underwriters to make sure they get the best offer available. You don’t always get that if you try to just do it on your own. It’s really important to use somebody that can walk you through and help guide you through the decision-making process.
JIM: What I’ve found is when clients have done that, typically there’s really not a difference in the price. It’s just a matter of who’s getting paid so if you’re using an online service, they may be paying the person who built the website to do the purchasing of that and maybe kept some of the profits for the organization that’s doing that but you really can get the benefit of an agent without really adding any cost but people seem to have that preconceived notion they’re going to save money that way. Do you find that to be the same in your walk?
MARV: Yes, they feel that it’s cheaper to buy it online. That is not the case. The insurance products will pay out the same amount of commission whether it’s being purchased online or through an agent and if they don’t really want to see an agent face-to-face, there are lots of agents out there that would be happy to deal with them on the telephone and help walk them through the process so they don’t have to physically see somebody but I think it’s very important for them to talk with somebody. That’s where it’s important.
JIM: Alright, we need to take a short break. When we come back, we’re going to continue to visit with Marv Feldman, CEO of what used to be the Life and Health Insurance Foundation for Education, which is now just simply Life Happens.
JIM: Welcome back as we continue to visit with Marv Feldman, CEO of lifehappens.org, a nonprofit organization dedicated to the education of Americans on insurance and not just life insurance but being that it’s September and it’s Life Insurance Awareness Month, that’s what we’re focusing on today. Tell me how has Life changed its consumer research? Are you still doing the real-life stories?
MARV: We are still doing the real-life stories. What we have done is we have made sure that they are appropriate in today’s digital download formats for people to look at. All of these are now on YouTube so people can go straight to YouTube and look at them. If they want to send them to somebody else to look at, they can do that through a link and all of the resources that we now have on Life Happens are digitally available and downloadable so it makes it much easier for the client to do their research. It also makes it much easier for the agent or financial advisor to take that material and include it in an email for the client to review and study so that’s how people like to get their information so we’ve changed our whole format to make it into the digital format that people are expected today. We’re not doing any print advertising this year with the exception of one ad that one company wanted to use and they wanted us to cobrand it with them, which we did, but everything is digital. There is no print advertising of any type and by doing that, we’re much more cost-efficient in the utilization of the resources that we have available so we get a much better reach for the real-life stories and other types of videos that we produce.
JIM: The real-life stories, for those of you, if you haven’t lived through a circumstance – and, again, your education is for disability income, long-term care, life insurance – for those that may not have had an experience in your own family about what the impact might be, I always find I can learn more from seeing what others have gone through than reading a book and getting a chance to hear their story. Life does a fantastic job of interviewing real-life situations of people who’ve been through things, what planning they’ve done, how insurance can help the family go on. It’s just fantastic. The other thing that you’ve done in the past and I think you’re still doing it is the scholarships. For those listeners, if you have somebody that you know or care about, maybe one of the kids has lost a parent who wasn’t properly insured, you have a scholarship fund set up for people that can apply for scholarships in those circumstances, right?
MARV: Yes, the scholarship is a competitive program. They have to write a 500-word essay or they can do a short video and submit it on that basis. We had over 2000 scholarship applications within a 30-day period. We gave out roughly 46 scholarships and during the time that we’ve been doing this, we’ve now funded about $900,000 in scholarships. Next year, it’ll go over a million dollars. These are all for young people who have lost a parent or guardian that was providing significant financial resources to help raise them and get them through school and because of that loss, they’re no longer able to go to school or it severely impacted their ability to go to school so it’s a competitive basis. They compete against each other. We have about 140 some people from executives to insurance commissioners and all other kinds of people that go through these to help choose the people that are most deserving. The impact that we have on somebody’s life is just so amazing, just so amazing.
JIM: Yeah and if someone wants to see some of those stories, that’s also available on the website, right?
MARV: Correct, that’s on the website. It’s also on YouTube.
JIM: This has really been fantastic. Once again, why don’t you talk about how people can access the website, learn about life insurance, disability income, long-term care insurance. How do they do that?
MARV: The thing to do is to go to www.lifehappens.org. Click on that. It will bring up the main website. Then there’s a tab on there that says Insurance 101. They click on that. It will walk them through a funnel, which allows them to ask their questions and enter their answers and it will walk them right through all the steps that they have to have, to learn about the different insurance products, whether it’s life insurance, long-term care, disability, to help them calculate how much they need, to help them find the coverage, and then as you said, we have all the videos on that site for them to see how having these products has impacted other individuals or in the case of the scholarships, what happens when there is no life insurance or health insurance or disability and how that has severely impacted a young person’s ability to grow and go on in life so all of those items are there for the consumer to look at and use and, Jim, I might mention for financial advisors and the agents that are coming onto the site, there is a tab on the upper right-hand side that says Company and Agent Resources. If the agents or the financial advisors click on that, then they can register and create a password account and then they can access additional resources that can be used to help educate and make sure the consumers are aware how they can solve their issues.
JIM: I can’t emphasize enough, don’t go it alone. Use a professional when making these decisions. Another thing I tell clients, this is planning. We’re life insurance planning. We’re disability income planning. It’s not planned. Circumstances change. Family situations change. As we talked about, the pricing has changed to the advantage of the consumer. If you’re not reviewing this stuff on a regular basis, you might be finding your insurance coverages out of alignment with what’s available. One example I would give to that, just recently, companies have started to make available a lot of different types of benefits with accelerated death benefits. I’ve heard people say well, life insurance, that doesn’t benefit me, I’m dead. Well, now you have critical illness coverage that upon diagnosis of disease like stroke or heart attack, a benefit may be paid out, terminal illness riders where you may be able to get some of that money paid out if not all of it prior to passing. Maybe that money can be used for treatment or taking a trip with your family or whatever, giving you cash and more flexibility about when you receive it so it’s really important that you work with an advisor, understand your options, and really from what we talked about right in the beginning of the show, understand what it costs. People are making judgments and they haven’t even gone down the path to find out what the true cost is. Marv, I appreciate you joining us again and look forward to having you again in the near future.
MARV: Great, thank you very much, Jim.
JIM: Thanks for joining us this week and tune in again next week as we explore another phase of the Real Wealth process and remember, if anything you heard in today’s show you’d like to get more information about, contact your Prism Insurance Agency advisor. Also, if you feel that any of this information would be helpful to a friend or family member, just click the Forward to a Friend button.
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