From Policies to Payouts: A Deep Dive into Life Insurance

Ever wondered how to navigate the labyrinth of life insurance? Well, strap in as we break down the complexities of policies, premiums, and payouts and make it as simple as ABC. We're joined by the seasoned life insurance expert, John Ensley, whose wealth of knowledge will empower you to make informed decisions around your financial security. We delve into the three primary types of life insurance - term life, whole life, and universal life - giving you the tools to decide which coverage best suits your needs.

Are you curious about the nitty-gritty of life insurance? Brace yourselves as John peels back the layers on insurance companies' data requests, the boons of a whole life policy, and the frequency of policy reviews. We'll also shed light on the stringent regulations insurance companies must comply with when investing premiums and the fate of a policy if you have a loan against it at the time of your demise. We guarantee you'll walk away with a deeper understanding of life insurance and the myriad of options at your disposal.

Fear not, we've got your back when it comes to life insurance red flags. Together with John, we navigate the fine print of insurance policies, from contestability periods and suicide clauses to grace periods and hidden fees and costs. We'll also scrutinize the specifics of different policies and how they can be terminated or changed during their term. Plus, we'll guide you through the claims process and discuss considerations for those aged 80 and above. We wrap up with John offering a free 30-minute strategy session for listeners who want to dig deeper. Join us to gain the confidence and competence to select the right life insurance policy for you!

John Ensley, ChFC®
John Ensley Financial
JumpOnWithJohn.com

Transcript

Speaker 2: 0:02

Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want. Now, here is your host.

Speaker 1: 0:12

Ms Kim Chapman, welcome to another edition of Money Matters. I am your host, kim Chapman. Today I want to demystify the maze of life insurance policies, the premiums and the payouts. You know, whether you're a young adult just stepping into your responsibilities, a new parent thinking about the future, or simply curious about how life insurance fits into your financial journey, you're in the right place. Today we'll break down the basics, we're going to uncover some myths and we want to empower you with the knowledge to make an informed decision, because that's what we're all about here Giving you the information, bringing in experts so that you can make informed financial decisions. So joining me today is John Ensley, with J Ensley Financial. Welcome and good morning, john, good morning.

Speaker 2: 0:57

Kim, thanks for having me. I'm looking forward to our conversation.

Speaker 1: 1:00

So, before we get started, give us a little information about you and about J Inslee Financial, and what makes you an expert today.

Speaker 2: 1:08

Absolutely We'd love to. So I founded J Ensley Financial in 2012 as a financial planning company and I consider my practice what I call life insurance centric financial planning. So life insurance plays a central role in what we do from a financial planning standpoint. I'm also a chartered financial consultant, which is a designation from the American College of Financial Services. I really started my practice after some couple of failures in the late 90s and the mid 2000s with some real estate projects that kind of led me on what I call a journey of self discovery Lots of books, lots of studying, lots of learning, mostly finance related and got super passionate about helping people build the life that they want to build and position themselves in a way that is safe, that keeps them in control and so forth. So it launched my practice and made a career change in 2012 and launched that practice. Hard to believe even to me that it's been over almost 11 years now that I've been doing this. Just super fortunate and super blessed to get to do something I absolutely love and help people every day.

Speaker 1: 2:19

You know, when you say the word life insurance, I imagine if we had a room full of people and you asked them what it means, we would get so many different answers, because what comes to mind is always hear the little jingle. You know, life insurance isn't for the dead, it's for the people that they leave behind. So how about you kind of simplified for us? What really is life insurance? What is its primary purpose?

Speaker 2: 2:39

Well, you know, you could really say that all insurance is about ensuring the risks that you either can't afford or don't want to insure yourself. So life insurance is really ensuring the risk that a person in your family a loved one, a breadwinner, a business partner, etc. Might pass away and leave you with some liabilities or so on and so forth that life insurance could help you cover. So, really, life insurance is about ensuring the risks that we either don't want to assume or are not able to assume.

Speaker 1: 3:14

So and then, when we think about life insurance, there's not just one kind. What are the different types, or what are the most commonly purchased forms of life insurance?

Speaker 2: 3:22

So there's many, many different kinds of life insurance, but let's just cover kind of the main ones. So most people are familiar with term life, term life insurance, and term life insurance is kind of just like its name says, so it covers a particular term, so usually it's going to be 10 years, 15 years, 20 years, 30 years a specific term, and it's going to have a specific death benefit amount. So there's a couple variations that usually you're going to get. Let's just keep it simple and say we get a $250,000 death benefit for 15 years and so you're going to have a premium amount and you pay that premium for 15 years and at the end of 15 years that policy is going to expire and then you'll have the option to either cancel it or renew it at a higher price because you're now 15 years older for another term and another amount, assuming you still qualify.

Speaker 2: 4:16

And then the other type is what would be? There's actually two categories and we would put those into the category of permanent life insurance and so, just like that sounds, you have whole life and universal life insurance that would cover you for your entire life, as long as you keep paying premiums for your entire life. So there's some difference between whole life and universal life. Universal life is really a term life product with a side fund that accumulates cash value and that cash value can be tied to a stock market index. Whole life insurance is what I call an actuarial product, where the underlying cash value accumulation that also accumulates cash value is built on a set of actuarial tables or calculations, and both of them will cover you for your entire life, provided again that those premiums are paid.

Speaker 1: 5:14

So, of the three that you just listed, is there one that's more popular, more commonly purchased than the other two?

Speaker 2: 5:20

Well, I would say the most commonly purchased type of life insurance would be term life insurance. Most people are very familiar with that. That's probably what the vast majority of people have. I wouldn't use the word popular, because they think the type that someone picks is really based on their particular circumstances and what's a fit for their specific situation.

Speaker 1: 5:41

So let's talk about that. How do you determine which policy or what type of coverage you need? What factor should a person consider?

Speaker 2: 5:49

So that is going to vary. It's a great question, kim. It's going to vary from person to person based on everyone's individual needs. So if it's a situation where we're taking a long term view of our finances and our situation, then the product, like whole life, is really going to be a great fit where it can build. If it's designed properly, it can build cash values and over time those cash values can be used and we can get into some of those specifics.

Speaker 2: 6:19

Term life is a scenario where we have a specific need that we want to cover for a specific period of time, or cost can be a determining factor with term life, because it is going to be the lowest cost option in terms of monthly premium. However, it doesn't accumulate any cash value. So there's really just a big difference there between a type of insurance that provides a definite coverage for a specified period of time there's lots of circumstances where that might be the priority versus a type of life insurance that will provide coverage over a lifetime and accumulate a cash value within that policy. So you're simultaneously paying premium for a death benefit and accumulating an asset that's building up cash as opposed to. You can almost think about term life insurance as you're kind of renting the life insurance for 15 or 20 or 30 years because it doesn't accumulate any value from those premiums other than that death benefit in the event that the insured person passes.

Speaker 1: 7:19

And I know people get into insurance at every different stage of life. But what is a really good age to start looking at life insurance?

Speaker 2: 7:29

Well, you know, there's an old proverb that says the best time to plant a tree was 20 years ago and the second best time is today, and so I think that would be a good proverb to apply to life insurance. So the sooner the better, particularly on the cash value, life insurance like a whole life policy the sooner that you can get that started, even if you're starting it at a fairly modest level. Years and years and years of that building up and compounding can make a big difference. So I would say the sooner the better, and again, it's really going to be circumstantial, based on what you have going on in your life.

Speaker 1: 8:04

So what type of factors actually affect the premium? Because, like you said, with term life, that seems to be the one most common. People are very familiar with it and you mentioned that. You know it's probably one of the least expensive ones there. But what other things? What are the factors actually affect premiums?

Speaker 2: 8:22

So the biggest things that will affect the premium are age and health. Those are two big ones, right? Just about all types of life insurance have some sort of qualifying. A whole life and universal life may require a full medical exam and very deep medical underwriting, whereas term life might just be a health questionnaire where you answer a few health questions. Depends on the company and the product it'll vary a little bit. So health and your age will have the biggest impact on premium. But then the type of life insurance of course factors in there as well. So term life is going to have a very low cost in terms of premiums, especially for younger people. Whole life and universal life policies are policies where the premiums are going to be higher, but that's also because they're accumulating cash value and they're building up the other side of it that term life doesn't have.

Speaker 1: 9:16

Under what conditions would a person possibly not qualify for life insurance, whether it's term or whole life? Universal?

Speaker 2: 9:23

Yeah. So once the insurance company issues a life insurance policy on someone, they are obligated They've made a promise to fulfill their obligations of paying that deaf benefit out between then and the end of the term or, in the case of a whole life policy, for life. So they're going to do some checks on the front end in terms of health, and what they're really looking for are any history of some of the big things cancer, disease, kidney disease, some of those big things that can be life threatening down the road. There are also more and more nowadays looking at lifestyle choices, and whether you smoke or not can make a big impact on qualification and on the premium, and your height and weight comes into play. So just being generally healthy is really what they're looking for, so that they're appropriately underwriting the risk they're taking that someone's going to die sooner than expected and they'll pay that deaf benefit out soon.

Speaker 1: 10:25

So, outside of, of course, obviously having to possibly do a health exam, what other type of information is requested of the person that's looking to purchase the insurance? If I'm ready to get on the call with you and I want to learn about my options, what questions should I be prepared to answer?

Speaker 2: 10:41

So a good advisor is going to ask a lot of questions about your circumstances and your situation, and those things fall into the categories that any good financial professional should be asking you about, and that is your income, your source of income, level of income, the assets that you have and the liabilities that you have and get a good picture of your overall financial picture. But maybe more importantly, they're going to want to have some some conversation with you about your goals and objectives. What do you want to achieve long term, midterm, short term? What are the things you're trying to do? What are the? Do you have kids? Do you write? What are the? What are the risk factors there in terms of life insurance and those kinds of things? So you're going to, you're going to share some information with an agent that's going to give them a good picture of your financial situation so that they can suggest the appropriate type of insurance product for you.

Speaker 1: 11:34

How often should you even review? You know, for individuals that already have policies and so they're listening to this podcast and, of course, they're going to learn some information about the types of policies maybe that they don't have. How often should you review your policies?

Speaker 2: 11:49

So I review with my clients at least once a year. We get together and take a look at policy values. Now, I'm a I'm a big proponent of whole life insurance, so most of my clients have whole life policies that they're accumulating cash value and and so forth. So at least once a year I sit down with them when we look at the policy values. We look at how they've been paying their premiums and funding their policies and we also get an update on that financial situation. That's the most important thing. Is is to keep up with goals and objectives and what's going on financially, to make sure that the the systems and the solutions that that we put in place a year ago are still are still working and whether we need to change anything. So I always recommend at least once a year.

Speaker 1: 12:34

So let's talk about. You said that you're a proponent of the whole life. What are some of the advantages? Why would you recommend that one? You know you mentioned goals. What are the goals? What kind of goals can be accomplished by having a whole life versus, say, a term life insurance policy?

Speaker 2: 12:48

Absolutely so. A whole life insurance policy. Number one it covers you for your entire life. So once that policy is issued, you know you're going to have coverage for life, provided you keep you keep paying the premium payments. And when you pay the premium payments, if these policies are designed correctly and I stress that you really have to work with an agent that knows how to design a whole life policy correctly using the, using the writers that that need to be used and funded in the proportions.

Speaker 2: 13:16

But I look at my whole life policy as a savings mechanism. It's a way that I build up cash in another place. I can build up cash aside from bank accounts and so forth, and the unique thing about the whole life policy is it gives me the ability to access financing. I can borrow from my whole life policy or borrow against my whole life policy would be the more correct way to put it and use those, use those funds at very advantageous terms so low interest rates. I control the repayment, I can pay them back any way I want to, over any amount of time, and I can use that money for either other investments or for major purchases or as emergency funds.

Speaker 2: 13:58

So the way I view a whole life policy is. It's it's building up cash value. It's providing that death benefit that's important for for my family. It's building up cash value that can then create the ability for me to use policy loans and an advantageous way to do other things with. So I look at it as one tool that's getting multiple uses for the same premium dollar. So there's a lot of leverage and a lot of benefits to that. That's why I'm a proponent of it.

Speaker 1: 14:26

With the whole life policies you mentioned that you can borrow against and it sounds like some of the advantages would be that, like you said, low interest rates seems like you can control the narrative in terms of the term. This would be some of the downsides of borrowing against your policy. What happens if I have a loan against my policy and I die?

Speaker 2: 14:45

It's a great question, kim, and so here's the way it actually works. So life insurance companies are highly regulated at the state level. The National Association of Insurance Commissioners regulates all life insurance companies and they are highly regulated in what they can invest in. So insurance company life insurance companies are required to take the premiums that they receive from their customers and invest those premiums in such a way that they will be able to meet their future obligations those death benefits, and so, for instance, a life insurance company can't just go out and buy some kind of cryptocurrency. The regulators would have a very difficult time with that decision so they have to buy things that are very stable and, historically, are going to generate the kind of results that will help them meet their obligations.

Speaker 2: 15:37

One of the investments that a life insurance company can make is policy loans to their own policy owners. So when we borrow against the whole life policy, we're actually borrowing from the insurance company. We are an investment for them. They're making a loan just like any other type of lender would to anyone else, and we pay them some interest for that. But, as I mentioned, those are going to be very competitive and very low interest rates typically, and so what they're really doing is they're taking that whole life policy and they're using the amount of cash value in the policy as the limit of what they'll loan, and the death benefit in the policy is actually the collateral. So to your question, kim, if I have a loan outstanding and I die, the death benefit is going to pay that loan and then the remainder of the death benefit proceeds are going to go to the beneficiaries. So that's really what's happening there and what would happen in the case of if you die.

Speaker 2: 16:32

The other downsides of borrowing against life insurance is you are 100% in control. You're controlling the repayment term. You decide how long to pay it back. You can actually decide not to pay it back because the life insurance company knows that their collateral is the death benefit. However, what I refer to this as we want to be honest bankers with ourselves and so we always want to pay our loans back. So there's a level of responsibility that comes in and discipline to actually follow through and pay those loans back. Some people can see if they don't have that discipline or that responsibility, they can see that as a downside of something that could get away from them.

Speaker 1: 17:09

Is there underwriting process or do you have to be credit worthy to borrow against your own policy?

Speaker 2: 17:15

No, that's another one of the great benefits of being able to use policy loans is there's no qualifying, there's no application, there's no income. You don't have to provide income sources or income amounts or any verification or anything like that. You're in complete control of the policy owner.

Speaker 1: 17:31

And I know one of your specialties is using these policies basically to prepare for retirement, to build your wealth. How does that happen?

Speaker 2: 17:39

So, as I mentioned, these policies accumulate cash value, and one of the unique things about them is they are guaranteed to increase by a larger amount every single year, so that cash value is going to continue to build and build and build year over year over year.

Speaker 2: 17:56

And when we borrow from the policy and we use a policy loan, the cash value on the policy will continue to grow at the same pace as if we didn't borrow it. And so we have a unique situation with a whole life insurance contract where those cash values will compound over a lifetime. They never go down, they only go up. They get bigger every year, and if we borrow from the policy in the short or medium term, as I was describing a few minutes ago, we don't give that growth up, it continues to grow. And so we can borrow and repay and borrow and repay and borrow and repay throughout our lifetime. And then, when we get to that point where we decide it's time to retire, we can take this accumulated cash value and if it's accumulating for some time it's usually a significant amount and we can then convert that into a stream of income that we can use for retirement. And so, basically, we start drawing that cash value out of the policy at that point and use that as a supplemental retirement income when we retire.

Speaker 1: 19:00

And ideally for that to really be beneficial for somebody that's looking to use this type of policy for retirement, when do we have to start? I know I kind of talked about when should we just look at life insurance in general? But for a whole life policy to really benefit me, for me to use this as a tool for retirement, if I'm in my 40s or my 50s or even 60s, ready to retire, is it too late? Absolutely not too late.

Speaker 2: 19:24

So, just like any other kind of retirement planning, the longer you wait, the more you have to put away. So I'm always encouraged that the younger folks that might be listening out there to look into these types of policies and really get it in place as soon as possible, because obviously, the more years of growth and compounding you have, the time is really the most important factor, and so if we're 50 or 60 or even 70, these policies can still be designed to accumulate very large amounts of cash value in a relatively short period of time. But of course, we're funding them at a higher level at that point. So the tool can still be used regardless of what anybody's age is, all the way up to about, let's say, 75 to 80. Beyond age 80, it starts getting much more challenging in terms of health, qualification and so forth, but really obviously sooner the better, but it's never too late.

Speaker 1: 20:23

Almost never too late. If I have a policy which any one of these, the life, the whole life, the term other than non-payment, are there any other circumstances that could cause the policy to be terminated?

Speaker 2: 20:36

So term life is going to end at the end of the term. So you pay all your payments for the term, but at the end of 15 years or 20 years whatever that term was originally that policy is going to end and it's either going to. People have probably seen before with term policies where you get a letter in the mail and it says your term policy is going to end and the new premium after is some exorbitant amount and that's because it can either renew at much, much higher rates or what most people do is they cancel those policies and buy another term policy or some other type of insurance. So with the term policy, non-payment of premiums or the term coming to an end with a whole life or a universal life policy, non-payment of premiums would definitely could cause the policy to end. The only other things that really could cause the policy to end is if it was discovered that someone committed fraud on their application something along those lines that could come into play.

Speaker 2: 21:34

The exception to that would be universal life, and universal life is the best way to describe it is. It's a term life product with a side fund, and that side fund is what accumulates the cash value and it's also what draws the cost of the policy out. So there can become a circumstance, if the side fund underperforms and premiums aren't paid, where the policy could lapse. So if the cost of the policy is more than the side fund can support, then either more premium would have to be put into the policy or the policy will lapse. So that is probably a rare but certainly a possible scenario.

Speaker 1: 22:15

So can I shift gears midstream? If I've got a 20-year policy and I'm 10 years in, is there any benefit or advantage for me to switch it over to a whole life or a universal? Or can I switch it or these completely separate products? I just have to stick with what I have. What would my alternatives be?

Speaker 2: 22:33

So they are completely separate products in terms of a term policy. So there's really no way to switch a term policy to whole life. The exception to that is some companies will offer term life insurance policies that are convertible. So not all companies. You would have to confirm this on the front end. But some companies will offer a term life insurance product that is convertible to permanent, convertible to whole life at any point, and so basically they'll take that death benefit, they'll convert it to whole life and they'll let you know what your premium will be going forward to support that whole life policy. So sometimes they're convertible, but in most cases they are not.

Speaker 1: 23:14

So, when I'm reviewing my policies, what is really the fine print that a consumer really needs to look for? Because in the ideal world, we read everything word for word, we make sure we understand it, but we know that's not happens. So what are those things that consumers often overlook when they're purchasing a policy that tends to bite them in the rear at the end?

Speaker 2: 23:35

Yes. So there's a few things that you really want to pay attention to, and one would be contestability period. So it's pretty common in the industry for the contestability period to be like two years, and so if there was a mistake made on an application or something we're not talking about fraud, just talking about a mistake usually the insurance company, if it's beyond two years that that mistake is discovered, they're not going to contest the policy. The other thing that that comes into our things like, most people are concerned about suicide clauses and policies, and most policies do have some language around suicide, but usually it's for a two-year period. So if the policies for more than two years, then they usually will not contest policy in a suicide situation.

Speaker 2: 24:23

Now, this will vary from company to company, so you really got to look at the details, the fine print, so to speak, on the front end, and know what the contestability periods are and exactly what the terms of that suicide clause might be. The other thing to look at are grace periods. It's pretty common for life insurance companies to give a 30 or a 60 day grace period on premium payments, but you might run across a contract out there that says if you miss a premium payment by 10 days or something along those lines, they could cancel the contract. So you just want to be aware of those things, and then the other things that I would look for in the fine print are anything about fees and costs, and whether those fees and costs are guaranteed or they can maybe changed. Obviously, guarantees are better than things that are not guaranteed, and so you just want to know what those guarantees are or are not.

Speaker 1: 25:14

So what does the claims process look like? Does it vary from the type of policy to type of policy, and what's the average payout time for policies?

Speaker 2: 25:23

So the claims process is going to be pretty similar regardless of the company or the policy type You're going to. If someone passes who's insured, you're going to reach out to that life insurance company and they're going to ask for some verification. So a death certificate and some identification verification and typically within about 60 days those death benefit payouts will go to the beneficiaries.

Speaker 1: 25:48

So I want to talk a little bit about the age, because you see the commercials all the time, especially daytime TV. If you're between the ages of, I want to say it's, 50 and 80, always here, 80. So if you're a little over 80, approaching 80, what concerns should that person have in terms of being able to either continue coverage or obtain new coverage?

Speaker 2: 26:10

Absolutely so. This is one of the reasons that I'm such a proponent of permanent life insurance. There's kind of a myth or a belief in the financial services world that once you're old, you no longer need life insurance, and I think the idea is that your other assets will have built up to a point. But that's just simply not true for a lot of people. So if you get whole life insurance or type of permanent life insurance early on, then this is a scenario you'll just head off. You'll never have to deal with, because you're going to be covered With term insurance. When you get to a certain age, it becomes very, very expensive. You just have to approach that very carefully. There's a lot of companies out there that are offering what are called final expense policies, and they're relatively small policies designed to just cover the cost of burial so that someone's family at least has those costs covered, and some of those policies can be the right thing. Again, it just depends on the circumstances and what that situation is for each individual family.

Speaker 1: 27:11

Of course, no industry is going to be immune from having scams and fosters out there, and especially they will prey upon the older people that are looking to make sure that they have either burial coverage or leave something for their loved ones. What are red flags that consumers should look for to make sure they can avoid being scammed?

Speaker 2: 27:31

I think the number one thing is to know who you're working with. Work with an agent, someone who has some credentials that you can verify as licensed in your state. It's very, very easy, especially online, to go to any state insurance commissioner office and verify the licensing of an agent that you're working with. So that's the first thing Make sure you're working with a legitimate, licensed agent. And number two, I think, look for some additional professional designations in the industry. So, for instance, I have a CHFC, a chartered financial consultant designation from the American College of Financial Services, in addition to being life insurance licensed, and that just is another layer of professional certification that you can use as kind of a verification that you're working with someone reputable and then knows what they're doing.

Speaker 2: 28:22

Some other designations to look for would be CLU, chartered life underwriter. Many CFPs or certified financial planners are also insurance licensed. So those are a couple of the others that you can look for. But I think that's the biggest thing is, if you're going to buy an insurance product, make sure that you can verify that you're working with a legitimate person. So that would be the biggest red flag is if you can't verify that this person is licensed in the state that you live.

Speaker 1: 28:48

Do door-to-door insurance agents still exist, or is that an immediate red flag of somebody is knocking on your door wanting to sell you an insurance policy?

Speaker 2: 28:57

I'm sure they still exist, but it's certainly, I don't think, the norm in this industry anymore. And again, I would caution anyone from buying on the spot, so to speak, without doing a little research and confirming that who they're working with is legitimate In paperwork.

Speaker 1: 29:16

we're becoming a paperless society. I imagine back in the day you would get a policy and you would hold on to it like it was cash. Is that still the same case? What happens if somebody dies and there's no paperwork to be found?

Speaker 2: 29:30

That is such a great question and something that so many people don't think about, and that is, you really should have somewhere that your family knows where to find it, even if it's a piece of paper that highlights or lists out the life insurance policies or other beneficiary type products like retirement accounts and so forth, so that someone, in the event something happens to you, knows where to find that document, that piece of paper, and then they know who to contact.

Speaker 2: 30:01

There may be, it's still quite common for there to be paper copies of the actual insurance contract. Keep those in a file somewhere with other important documents and, again, make sure someone in your family knows where to find those documents. And so much of the process today has gone electronic. Not every company, but most companies have gone electronic. So the application is electronic and the policy issue is quite often an electronic process. Where you're doing that on your computer, you always have the option of downloading and saving that copy that you could print out. But the issue process is oftentimes electronic now, which makes it even more important for there to be a and it can be a computer file, as long as someone knows how to get into the computer and where to find it where your beneficiary is. Your family members are able to find the assets and the life insurance policies and so forth that you have in the event from you know you pass away.

Speaker 1: 31:00

So I want to talk a little bit just about beneficiaries, because I'm just picturing in my mind. You know, I've seen these stories where people leave their money to cats and dogs and organizations. So what is required, or is there a requirement, when you purchase the policy, what type of information needs to be provided about that beneficiary? Are there people, age groups or entities, animals, or are there things that you can't use as a beneficiary?

Speaker 2: 31:27

So the beneficiary is really entirely up to the policy owner within some reasonable guidelines, and that's going to be a little different for the way each insurance company underwrites. But generally speaking, what they're looking for is that the beneficiary has some interest, that it makes sense. It's a family member, a business partner, it could even be a close friend that you know. They'll ask some questions to confirm that. But a beneficiary can be almost anyone. Except for the fact that you can't just go out on the street and pick some random person to be your beneficiary, that's probably not going to fly in the qualification process.

Speaker 2: 32:04

It's also quite often the case where people will leave death benefits or portions of death benefits. A lot of folks are also aren't aware that you can designate multiple beneficiaries and a certain percentage will go to your children, a certain percentage to a charity, etc. So leading to organizations is also quite common, particularly charitable organizations, and in the case of pets, I personally have not run across anyone who wanted to list their pet as a beneficiary, but I have read those stories as well. So I think for most insurance companies that I'm familiar with, I think they would handle that on a case-by-case basis and decide whether that was going to fly for them or not?

Speaker 1: 32:46

Is there a maximum? And I imagine, hopefully not times you can change your beneficiary. You know, maybe this month it's this child or this spouse and you know, things happen and change and I want to change it again. How do insurance companies even keep up with those changes? And again, is there a maximum? You know, if I'm calling you every other month wanting to change the beneficiary, how does that work?

Speaker 2: 33:11

So the policy owner really has complete control over changing the beneficiaries. There are certain types of policies that will not allow a beneficiary to be changed, but you'll know that on the front end. But generally speaking, for most policies the policy owner can change beneficiaries, add beneficiaries, you know technically, as often as they choose to. I think the agent and the insurance company probably will have some questions if it's a weekly thing.

Speaker 1: 33:39

And I want to kind of wrap up just a little bit in terms of if you feel you've been scammed, if you feel like you know maybe you've purchased a policy that's not really with a, you know, legitimate organization or you've run into trouble having a claim process, what recourse do policy holders have, or either the beneficiaries?

Speaker 2: 33:59

Absolutely so. If you think you've been a victim of fraud, then and it has to do with any type of insurance, including life insurance then you should reach out. Every state has an insurance commissioner's office and you should reach out to that office and inquire on how to file those claims and how to get help with that, okay, and to kind of wrap us up, what's your best advice for consumers in the market for life insurance?

Speaker 2: 34:23

So my best advice is find an advisor or an agent that you can talk to about your specific circumstances, who will walk through the different options available to you so that you can make an educated decision about what product and what you know, what product structure is right for you, based on all of your financial picture, kind of like where we started our conversation. And then, in addition to that, plant the tree today, even if you didn't get to it 20 years ago. So, sooner than later, just get started.

Speaker 1: 34:54

And how can our listeners learn more if they want to hear more about what you have to say about life insurance and how it can be a benefit for them?

Speaker 2: 35:01

So what I do is I offer a free 30-minute strategy session is what I call it. It's a consultation where you can ask questions and I can learn more about your circumstances and make suggestions. Very casual, no pressure, not a sales pitch, just a conversation. And you can reach me at jumponwithjohncom and that landing page will give you the ability to jump right into my calendar and schedule that free strategy session. So I'll be happy to discuss what you got going on.

Speaker 1: 35:35

Well, thank you, john, for joining me. Hopefully we've motivated some consumers out there to go and review your policies or start thinking about life insurance, because it's not a matter of if you're going to die, it's when.

Speaker 1: 35:48

No doubt about that. Thank you, john, thanks Cam, it's been great. Selecting the right life insurance policy is a significant decision that can greatly affect your family's future. Here are some tips to help guide you in the process. First, determine your need Before shopping around. Evaluate why you need life insurance and look at the different types to figure out which one might be best for you. Calculate the right coverage amount you need to take into account your debts, your monthly expenses, mortgage basically your family, because, again, sometimes life insurance isn't for the person that dies, it's for those that you leave behind. Shop around Rates can vary significantly, I mean, between companies and policies. Find what's going to be right for you. And then finally, check out neighborsfcuorg for a slash financial education to learn more on how to use the money you have, make the money you need and save the money you want.