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How to protect your family when life happens

S*it happens. Let’s face it, that is part of life. If you’re old enough to be reading this, and listening to our Susman Insurance Agency weekly podcast, then you know it. This week, join Karl Susman and friends as they talk about how to best protect your family when the worst happens. Transcript follows.

JIM: Today we have with us the CEO of LifeHappens.org, it’s a nonprofit organization whose mission is really to educate people on the importance of insurance, and Marv, we’ve become good friends and we’ve shared the stage a few times on speaking engagements, and I really appreciate all the work that you’ve done for the industry. You’ve been a life long insurance agent, insurance professional, and now you’re giving back to the industry. I know you served as president of the Top of the Table in MBRT and you’ve been very involved in a lot of different things, but I think the most important thing you’ve been involved in with the industry is this LifeHappens.org, and Marv Feldman, I just want to thank you for being with us and I appreciate all you do for the industry.

00:49

MARVIN FELDMAN: Jim, thank you very much. It’s my measure and my honor to be able to share and give back, and hopefully we’ll come up with some good ideas for the people who are listening.

01:00

JIM: The scary thing for me when I see some of the stats is the number of people out there, I know Limber has done a bunch of studies about Americans that are uninsured or under insured when it comes to life insurance, and it always affects us. There’s always those people that you see that you think they’re the epitome of good health and somebody happens to them health-wise and they unfortunately pass away or a car accident or something tragic like 9/11, none of us know when that day comes but only some of us know how our family is going to be taken care of, and a lot of us are out there leaving things to chance.

Can you just first of all just share what LifeHappens.org is and how some of our listeners might be able to tap into some of the resources that they have?

01:45

MARVIN FELDMAN: Absolutely. The web site as Jim mentioned earlier is LifeHappens.org. We were formed approximately 22 years ago for the express purpose of educating the consumer about what the products in our industry do, not just what they are, about motivating consumers to make informed educated guesses in their overall financial planning while utilizing the agents, and to reinforce the value proposition and the trust level between the consumers and the industry, because that’s something that the media continues to attack because we’re a big target, and they think we have relatively thick skin, but the reality is we have thin skin and it hurts our feelings just like everybody else. Our job is to reinforce that trust and confidence with the consumers.

02:35

JIM: The insurance industry, it’s amazing when I hear how much in claims are being paid out, and it’s amazing. It’s a really important part of people’s overall planning, and I know this is September so we’re focused on life insurance this month. It’s live insurance awareness month. You’ve been doing something every September by having a national spokesperson, so talk about a little bit.

02:57

MARVIN FELDMAN: One of the things that we try to do is to bring somebody to the front who is a nationally recognized individual who is also willing to share their personal story as it pertains to some type of loss, typically involving either life insurance or whether there was no life insurance. This year we’ve done something a little bit different, and that is that we’ve looked for somebody who is in a risky profession and has the chance of incurring some type of accident, injury, or death as a result of what they do, because in reality everybody is involved in some type of risk, even if you’re just getting in your car, driving down the road to go to the grocery store. You’re at risk of somebody running into or having an accident.

This year we reached out and chose Danica Patrick who is a professional race car driver, both Indianapolis type cars and NASCAR, currently running in the NASCAR circuit, and it’s interesting that when we reached out to her we were only thinking in terms of her sharing why she might want life insurance because of her profession, but then we found out that one of her grandparents had died, they owned a farm, and when the grandfather died the grandmother had to sell a good portion of the farm to pay for taxes and expenses. We didn’t know that she had that story, so actually we have a two-fer. We have a story of loss and we have a story of protecting against the future risk that you might be incurring. She’s a tremendous, tremendous spokesperson and is being exceptionally well received by the industry and the consumers.

04:33

JIM: Marv, another thing that you do is you have the Life Lessons scholarships, where you award scholarships to kids who suffered a loss, and I’ve got to say I’ve been the judge for that a couple of times over the years, and I think if everybody had the chance to read those stories, first of all you don’t get through them without shedding some tears, but it is amazing, some of those tragedies that these families would have been maybe just a little bit better off had there been some planning in place, but those are all kids who lost parents with little or no life insurance. Share that with us a little bit, how that works.

05:10

MARVIN FELDMAN: We open it up February and allow people to submit their requests for scholarships and grants. During a 30-day period we have several thousand kids who will submit applications either written or video application which they can also submit. We then have to boil that down to a very few because last year or this year we only gave out about 34 scholarships total, but we’ve given over $1 million worth of funding in the last few years so it does add up to significant numbers, but it’s surprising when you read these scholarships about how many children were in a situation where there was a loss because of shooting, of drugs, of alcohol, of accidents, of illness, where the people were totally unprepared. They had no planning in place. They had little or no life insurance in place, and the trials and the tribulations that the families have gone through to try to maintain a family life, and for these kids to say, well how do I better myself going forward, so we’re looking for the stories where the children have really struggled to do well and are doing all the things that they need to do to better themselves and allow us to help them along the way, and it’s really significant.

06:24

JIM: Yes, you’re dealing with kids that are approaching college, so you’re talking about young adults and the parents of these young adults are fairly young by today’s standards, and you would think there would be one or two out there but you literally get hundreds if not thousands of applications, so it’s a reality of life today that life might end at the wrong time for the wrong reasons, but it’s still important to do planning.

06:48

MARVIN FELDMAN: It’s very important to do planning. One of the things that we’ve learned through our barometer study which we do in conjunction with Limber the research group for the industry, this are approximately a hundred million people in the United States who have no life insurance of any type. One of the problems today is that you look at the millennials who are deferring the life changing decisions, so they’re deferring getting married, they’re deferring buying a house, they’re deferring having children until they’re five or 10 years older than what it was during our time when we were doing those things.

I was married at 21, today the kids don’t get married in their 30s. I had children in my 20s. They don’t have children now until they’re in their 30s, so those life changing decisions are being delayed and because they’re being delayed they’re not learning early on what needs to be done, and for some of these millennials they’re far enough along in their life that now they’ve developed a few medical impairments and sometimes they can’t get insurance or can’t get it at a reasonable rate, so by delaying they cause other problems that they’re not thinking about, but it’s the old saying of it’s not going to happen to me so I don’t need to deal with it today, and what we do at Life Happens is to try to make sure that they understand what are the possibilities that something could happen. They really need to take care of it today, and it’s not near as expensive to do what they need to do as they think it is.

08:10

JIM: Let’s take a quick break. When we come back let’s just talk about that a little bit, about what it really costs, because I think that’s one of the biggest myths. People think this insurance is really, really expensive but it is something that you can do by maybe giving up maybe a cup of coffee a couple times a week might be the difference between protecting your family and not, so please stay tuned.

[BREAK]

09:29

JIM: Welcome back as we continue to visit with Marv Feldman who is the CEO of LifeHappens.org, a nonprofit organization that helps educate Americans on the importance of preparing and planning for their families, and also puts the money where the mouth is by offering scholarships for kids who have come from families who didn’t do proper planning with their Life Lessons scholarships.

Marv, before the break we were talking about how many people are ill prepared. You talked about the barometer, the insurance barometer where people are putting off starting families, buying homes, and things like that, and unfortunately they’re also putting off the important planning process and as people get older, having access to life insurance due to ailments, illnesses, maybe some bad hobbies that they might get into like race car driving like Danica Patrick which might make it unaffordable or unattainable to do the proper planning.

Before the break, one of the things we were talking about is the price of insurance, and I know this is probably one of the biggest myths out there. People think it’s ungodly expensive and they can’t afford it without actually checking in to what the price might be for them. Comment on what the cost of insurance is today.

10:42

MARVIN FELDMAN: One of the things that we’ve done in our research is to ask people of various ages what they think it would cost for them to buy just a quarter of a million dollars of term insurance at their age assuming they’re healthy. We get estimates of anywhere from two times to seven times what the actual cost is, so for a 30-year-old who is healthy, $250,000 policy is only approximately $200 per year, and a 40-year-old it’s only about $300 per year, and that’s for a 20-year level term policy.

Now, term is not necessarily always the right answer but it’s the least expensive solution, and people have to understand that for less than a dollar a day they can protect their family, and people waste more than a dollar a day in all of things that they do. A cup of coffee, even if you use a Keurig machine a cup of coffee costs 50 cents to a buck a day, and if you go to Starbucks you’re talking about $2, $3, $4 a day, so when you put it into perspective the cost of buying life insurance is very, very inexpensive and what you do is create money where none existed before at a time when your family is going to need it the most, and that provides you a great sense of confidence and security, and provides dignity for your family.

11:57

JIM: Now, I know LifeHappens.org, your main mission is education and you’ve been trying different ways to reach the public to help them become aware that this is important for them and it’s not as bad as you might think it is. Talk about some of the new alternative distribution systems that are being developed to help the consumer.

12:17

MARVIN FELDMAN: There are a number of companies out there that are developing programs to make it much easier for the consumer to buy, and even the old multi-line companies and the old mutual companies, they’re all looking at things that can make it easier for the insurance to buy, so the research can now be done on line. They can look to see what they want. They can choose whether or not they would like to work with an advisor or an agent, whether they want to talk with somebody, whether they want to meet with somebody, and in many cases the actual application process can be done on line electronically, so there’s no need to sit there and fill out a bunch of paperwork.

It’s much easier than it used to be to buy. It’s not near as onerous as it once was. The system still does require some medical information but for many people it’s just a questionnaire. There’s really not much more that needs to be completed, so people are afraid to do anything because they think it’s very difficult and very hard to arrange it and to buy and very expensive, but those are myths that are no longer accurate, and it just takes a little bit of effort on their part to take care of it. If they are looking for a company that they can go to, go to LifeHappens.org, look at the list of our supporting companies. We have 150 or 160 companies that are listed on the site.

Jim, one of the things that people don’t understand is sometimes you can go on to a site and you’ll get quoted a preferred best rate and they think that’s what they’re going to get, but they forget that they’ve got a little bit of blood pressure, they’ve got a little bit of diabetes, they’ve got a little bit of too much weight. They have all these little things that will impact their underwriting and that’s where an agent can really help guide them through the proper company.

13:53

JIM: I always tell people the internet has all the information in the world you need, but it lacks the wisdom, and what I find when it comes to insurance, I know you guys have great tools and if people want to get access to your tools, what’s that web site again?

14:08

MARVIN FELDMAN: LifeHappens.org.

14:11

JIM: As a consumer they can navigate through all those tools, and there are a lot of helpful things there, articles that have been written. There are real life stories. There are different things that they can access that can help them make an informed decision or at least get on the right track and formulate what questions they should be asking their insurance professional. It’s a great resource. People should be looking into it, and the last thing I would say it you touched on this, how important it is to work with an insurance professional, but I also look at that as when you make the decision to buy the insurance, they can help guide you to have the right coverage but even more importantly if there’s a claim they can help your family guide through it because let’s face it, if you lose a loved one you might not be thinking clearly, you don’t know which way to turn. There’s a lot of stress involved. An agent can really help you at that time.

Then in between, making sure you don’t make the mistake of letting that insurance lapse just before you need it, I think an agent plays a very important role in making sure that insurance does what it’s intended to do, and that is provide security for that family when it’s needed the most.

Any other points that you’d like to make, Marv?

15:19

MARVIN FELDMAN: No. Your point about the agent is good. When you’re going through a lot of stress and strain in what’s happening in your life, you don’t want to be calling 800-agent to find somebody to help you. You want to be able to go to somebody you trust that you know can walk them through the process.

15:33

JIM: My understanding too is I have not seen any policies that are priced less just because you avoid the agent. The policies are fixed, it’s just a matter of whether or not you want the agent or not. Is that true?

15:47

MARVIN FELDMAN: That is true. A lot of people think that if they’re buying over the internet and they’re buying direct that they’re saving a lot of money. There are no fees, there are no commissions involved. Those are all regulated by the state. It doesn’t matter whether you’re buying through the internet or you’re buying through an agent. The cost for the policy, the premiums are exactly the same, so if you want to look at it that way, when you work with the professional agents and advisors you’re getting their advice and their wisdom for free.

16:11

JIM: Marv, always a pleasure to have you. Again, I really appreciate what you do for the industry, especially helping to educate the consumer, and hopefully we’ve reached a couple of people where it’s going to end up making a big difference that they make the decision to take care of their families and it’s there when they need it, so thank you, Marv.

16:28

MARVIN FELDMAN: Jim, thank you very much.

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