Ep-10 Stop Guessing Your Life Insurance Need

Life Insurance: How Much, What Kind, and When to Convert
Life insurance feels opaque. In 30 minutes Rich Leimgruber and 30-year industry professional, Jim Feldesman unpack:
• Term vs. permanent, plain-English math
• The needs-analysis shortcut that beats “10× salary” rules
• Hidden living benefit riders (critical illness, LTC hybrids)
• How to properly complete your application
• The one mistake that makes you un-insurable for years
No tips to “get rich quick,” just the facts so you can protect the people who count on you.

Want To Learn More About Our Guest?
James Feldesman, Financial Representative
WealthBridge Financial Group, www.wealthbridgefg.com
+1 914 208 2245
feldesman_james@nlgroupmail.com

Disclaimer: Living Benefits are provided by no additional premium Accelerated Benefit Riders.  Receipt of Accelerated Benefits will reduce the Cash Value and Death Benefit otherwise payable under the policy, may result in a taxable event, and may affect your client's eligibility for public assistance programs. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless the client has a need for life insurance. Riders are optional, may require additional premium, and may not be available in all states or on all products. The use of cash value life insurance to provide a resource of income assumes that there is first a need for the death benefit protection.  The ability of a life insurance contract to accumulate sufficient cash value to help meet accumulation goals will be dependent upon the amount of extra premium paid into the policy, and the performance of the policy, and is not guaranteed.  Policy loans and withdrawals reduce the policy’s cash value and death benefit and may result in a taxable event.  Surrender charges may reduce the policy's cash value in early years. 

Jim is a Registered Representative and Investment Adviser Representative of/ and offers securities and investment advisory services solely through Equity Services, Inc. (ESI), Member FINRA/SIPC, 675 Third Avenue, Suite 900, New York, NY 10017, 212-661-1600 or 212-986-0400. All other entities and persons are independent of ESI. TC7990551(0525)1

Filmed and recorded at Studio on the Avenue/LMC Media
Mamaroneck, NY
https://lmcmedia.org/
Produced and Edited by Vekterly
https://www.vekterly.com/

Disclaimer: This podcast is for informational and educational purposes only and should not be considered as financial advice, a recommendation for any specific investment, strategy, or financial decision, or legal advice. By engaging with this material, you acknowledge and agree with its intended purpose. Any examples provided are hypothetical and for illustration purposes only. Neither Rich Leimgruber, the EnRich Your Life Podcast, nor its representatives are advising or suggesting any specific action or decision. Before making any financial, legal, or tax decisions, individuals should consult their own financial advisor, accountant, legal professional, or other qualified professional before making financial decisions. All opinions expressed are those of the host and guests and do not reflect the views of any affiliated financial institutions. The views shared may not be suitable for every individual or situation. Past performance is not indicative of future results, and all investments carry risk. Please note that any strategies discussed may not be suitable for all investors, and the appropriateness of any specific investment or strategy will depend on individual circumstances.

Chapters

• 0:59 What life insurance really covers
• 10:58 Term vs. permanent, cost & flexibility
• 13:43 Cash-value component and the different types
• 18:29 How AI is affecting applications for Life Insurance
• 24:50 Living benefits: chronic illness, Long-Term-Care hybrids
• 27:28 Getting Life Insurance at a young age to help protect your "insurability"
• 28:40 How to convert term without new underwriting

Transcript

[00:00:26] Rich L: Hello and welcome to Enrich Your Life Podcast. I'm your host, Rich Leimgruber, and today we're talking about a very important topic that I tend to make sure I'm speaking about when I meet with new clients , and that is life insurance and why it's important to at least.

[00:00:43] Review it and make sure you have enough. We know it can be complicated and confusing. Life insurance comes in many different forms and not all policies are created equal.

[00:00:55] So what is life insurance and what is the best life insurance for you? [00:01:00] I get it. The cost, the structure, the duration of the additional benefits, it can all be overwhelming. What life insurance is best for you? How much life insurance do you need? And how and how long should you keep it? Well, we're gonna break it down for you today, and my guest is Jim Feldesman, who has three decades of financial expertise in both education and business works alongside his clients to secure. Their financial future. And as a former attorney, his focus is on using life insurance to craft tailored strategies and help manage longevity risks wisely to help protect their assets. So, with no further ado, Jim Feldesman, thank you very much for joining us today. 

[00:01:41] Jim F: Thank you for having me. 

[00:01:42] Rich L: It's obviously a topic of conversation that most people have once or twice in their life, right?

[00:01:48] If they're lucky enough to speak to somebody like you, um, hopefully they'll be guided in the right, uh, direction as far as all these different questions that we're gonna go over today. So, uh, you know, I always start off with, with, uh, [00:02:00] asking you how you got into the industry that you're in. I know you said before you're a prior attorney.

[00:02:04] How, how do you get into life insurance business? 

[00:02:06] Jim F: Well, I actually came back, I was in California and came back to New York and I was working for a, uh, company,

[00:02:14] a public company. Actually I was the only employee actually, of the public company. It was owned really being controlled. Small public company. Yeah.

[00:02:21] And uh, I was the executive assistant or something to the chairman and, uh. I had already been property casualty licensed because in a prior life I was doing, involved with some business that I needed it.

[00:02:34] And there was a gentleman who was, uh, had the ability to meet with employees in the company and I was watching them because I was ha, part of my job was I was handling the benefits for the company administratively, and I was listening to him.

[00:02:52] And I said, this isn't right that this goes back to the days of when Universal Life Products had like 12, 14% interest rates, [00:03:00] whatever the good old days. And yeah. And I said, he's selling it. I said, but it's like, it's too good. I said, you know, it doesn't seem right. And I went up to the chairman and I said, listen, I know he is a friend, but I don't think he should be here.

[00:03:16] And that just kind of resonated with me. And I said, and I decided to get my license. Not that I was gonna meet with them, but I wanted to understand more. Then the company eventually folded, uh, through bankruptcy and what have you, which was fine. And I went to go work for one of my brokers on the property casualty side.

[00:03:34] I hated it. Yeah. And I, and they said, why don't you switch? Hence, I then went and worked for, uh, one of the big major companies. 

[00:03:43] Rich L: Great. Okay. And here we are today, 20 and here We're today. 30 years later, right? Or more actually, 

[00:03:47] Jim F: but yes. But thank you. 

[00:03:49] Rich L: I don't mean to age anybody. I'm just, you know, trying to give you the credit here.

[00:03:52] It's okay. No, I appreciate it. It's, they call "street cred" or something like that. Right? So, you know, when we think about life insurance, um. [00:04:00] Most people would think it's just for families with children. And so rather than having a conversation around who needs life insurance, because ultimately most people need life insurance, let's talk about the benefits of why somebody should have life insurance.

[00:04:13] What is the reason to have the life insurance? Let's talk about some of the benefits of having life insurance, including, income replacement, right? Ensuring financial future goals and vice versa. So, somebody's coming to you, Jim, for the first time, and, you know, let's just say they're a business owner, right?

[00:04:29] Why do I need life insurance, Jim? 

[00:04:30] Jim F: Well, it's really simple. First of all, you have to listen. You want to know what's going on in their life. Why are they even here? What made them think to even ask about it? I'm a very firm believer in the fact that we have two ears and one mouth.

[00:04:47] Listen, yes. You know, and if you let them talk. They will actually give you the answer more than even whatever I have to say. But if it's a business owner, clearly, uh, are they by [00:05:00] themselves or is there a partner? You know, it depends. So first of all, if it's a. Sole proprietor person, and there's no one else in there.

[00:05:09] Then you know what, maybe the way they're structured, he has, he potentially has liabilities. He could have some, so if something happens at some point he should die. His family, if he's married or the estate could be left with. Debt. Yeah. And the life insurance would, would help with that. He could use it possibly to even use it to a, give it to a bank.

[00:05:32] Assign it to a bank, and use it as a collateral to help him with loans. Right. And if he has a partner, then we're talking about, what people talk about is buy, sell between the two partners, so this way, uh, the surviving partner. If, again, if there's a family, they'll get, uh, they'll be bought out of their interest in it.

[00:05:55] Rich L: Right. Right. So the surviving partner doesn't have to be partners with their surviving [00:06:00] spouse. That gets, 

[00:06:00] Jim F: there's a jokes, gets, there's a lot of jokes in there and saying, would you want to be a partner with my wife? No. I, and I'm not suggesting it, I'm just saying, but that, that it does defend it and it's amazing.

[00:06:11] Along that line, how many people. Oh, we have a buy sell agreement. I go and. Right. That's all right. How does it funding it? They don't take it. They don't, they don't take it. They're not funding it. And I said, you're missing the boat. 

[00:06:25] Rich L: And you know that that goes back to number one. I just wanna say selling life insurance is, it's a hard thing to talk about.

[00:06:32] Right. Nobody wants to talk about a potential death of anybody. Right. 

[00:06:35] Jim F: That's for sure. 

[00:06:36] Rich L: So you have to use a little humor and grace when we're talking about it. And I try and it's a lot of storytelling, right? So one of the things that I've always tried to do when, when talking about life insurance is. Be nice to both of them, but just say, have you ever experienced or have you known somebody exactly.

[00:06:51] Who said, I can't believe Johnny at, at, you know, 50 years old, he's gone. Did you think Johnny's wife ever thought that he'd be gone at 50? Like so [00:07:00] everybody's known. Somebody who's passed away, obviously, and you have to kind of make sure that people understand that it'll happen. Open it.

[00:07:07] Jim F: Just an open, I am an open book and I, and like you said, I love, I will tell a story. Uh. Whether it's about me personally, which you would never really know, or people who are related, and I'll talk about clients. It happens all the time. And sometimes I hope by uh, hearing it, they will say, this is what we do.

[00:07:30] Right? And then there's some people who even if they hear about it, they still live in a denial. And you kind of say, Hey, listen, when you're ready, I'm here. 

[00:07:39] Rich L: Yeah. So let's talk a little bit about, the process that you're putting somebody through. There's a lot of discussion that has to be made, right?

[00:07:46] Mm-hmm. And we're what we call a field underwriter when it comes to life insurance, right? 

[00:07:50] Jim F: Oh, for sure. 

[00:07:50] Rich L: So we have to actually be the initial observer. Of how they're living, how they're speaking, that's one of the things that we're trained on and we're licensed. So do [00:08:00] you start off with the amount of life insurance that somebody might be required and then back into the type of product or service that they might need, or you like?

[00:08:09] What do you talk about to them first? You figured out yes, they're interested in life insurance, right? So now what do you do? 

[00:08:14] Jim F: Well, I'm asking questions, right? And that's what it is. And you just, it's as I said, let them tell you. You gotta maybe spoonfeed them with the questions, right?

[00:08:25] But you're asking, what made you think that you'd want insurance? You might have an amount that you think is in your head as to how much you think you should have. We'll get down to that. So, but what are the issue, you know, what, what's going on in your life? And then you find out, well, they may have a, a bar mitzvah, they could have a communion, they could then have college, and then they may have grad school, and they said, well, maybe even help them with their, if they're married again with kids, their first house.

[00:08:55] Down payment, you know, who knows. 

[00:08:57] Rich L: Yeah. So these are future goals that you wanna have [00:09:00] established. And then if something should happen where a death will or an untimely death will prevent that from happening, you wanna make sure you have enough life insurance money there. 

[00:09:07] Jim F: Those are realistic.

[00:09:09] And then you have to, start figuring out, if you're talking about college, that could be a whole nother subject. But the idea is, what school do you think it's public or private? And, what's the tuition today?

[00:09:19] You can use an inflation factor and you're figuring it out, right? By the time you're doing it, they're gonna go. Wow, 

[00:09:25] Rich L: that's a lot of life insurance. There's a lot of life insurance going on here. Right, right. I said, well, 

[00:09:28] Jim F: Hopefully it could grow. It depends. Yeah. Yeah. And I know that's gonna lead into another, whole nother question is, and I know you want to get to it, which is talking about, what type of insurance.

[00:09:39] Rich L: Yeah, so before we go to the type, right, so there's always a general rule of thumb that someone might say that, oh, you know what? You just need five times your income, or 10 times your annual income for the protection. But there are other ways, right? There's several ways that you could determine based upon that.

[00:09:56] And I think you touched on it here, how many goals do you want to have funded, right? Which. [00:10:00] Is the capital needs approach. Right. It's like needs, like 

[00:10:01] Jim F: a needs analysis. 

[00:10:02] Rich L: Yeah. Needs analysis. Right, 

[00:10:03] Jim F: right. 

[00:10:04] Rich L: So you're gonna, you're gonna basically go over the, okay. God forbid, Frank, you're no longer here. And it's just Mary.

[00:10:11] Mary, what do you want to have? Make sure that you accomplish. And go through all those goals. You add 'em all up. Liabilities. Making sure that you cover all the liabilities that you already have, like a mortgage or a car payment. Exactly. And then you figure it out that way.

[00:10:24] But then there's also human life value. Which is, that's, 

[00:10:26] Jim F: Again, those are all interesting, helpful ways, but again, it comes down to. The person that you're talking to,

[00:10:34] they'll give you a rule of thumb. They'll give you an idea, I should say. It's also part of my job is, to make sure that ultimately they can afford it.

[00:10:43] I do not wanna make somebody insurance poor. Sure. And then it, it does nobody any good. 

[00:10:50] Rich L: So that comes, affordability comes down to the type of product that you want, right? 

[00:10:53] Jim F: Yes. I like to look at it as there's.

[00:10:58] Temporary and [00:11:00] permanent, or temporary and equity, if you will, right? It's like if you're renting a, an apartment, so that's term and like a lease. It's for x number of years or what have you. Same with term. There are guaranteed they can't change the rates. It's gonna be what it is for that period of time at the end.

[00:11:20] There's, you may have some options at the end, but whatever they are, they're gonna be a lot more than what you were paying if you stay with term. 

[00:11:27] Rich L: So most familiar, I think, is that like a 20 year term policy? 

[00:11:30] Jim F: Correct. That's the rule of thumb. 

[00:11:31] Rich L: So you have a level premium for 20 years.

[00:11:33] Correct. You can cancel at any time. And it's just like canceling the lease and moving out of an apartment. Exactly. Just say you don't, and we always laugh and say, look, not for nothing but. Affordability for life insurance, you want this to be a waste of money. You don't wanna die in the next 20 years.

[00:11:48] But you're buying it in the event that God forbid, because if you die, you're in a pine box and your beneficiaries get the roses and 

[00:11:55] Jim F: so it's almost like when 

[00:11:56] built and suspenders, you wanna protect. You know what? You gotta make sure it stays [00:12:00] there and I get it right. I.

[00:12:01] Could make an argument saying term is very can is an expensive proposition in of itself. However, it is from an out-of-pocket point of view, initially, it's the way a lot of people, especially younger people should start. And there are people who they may have, and I'll use the word convert, have changed, had term, and converted to something permanent.

[00:12:24] Have build up equity in it so that it'll last longer than the term. Yes, it costs more. But it's permanent and it will be there for you.

[00:12:33] Rich L: So why should somebody look at a permanent policy over a return policy then let's hit on that.

[00:12:38] Jim F: It depends upon their needs and doing what they want, what they expect out of it.

[00:12:43] Rich L: It's the end result. 

[00:12:44] Jim F: The end result, right? Let's face it, the real basis of life insurance is to protect. Your life, right? You're giving an income protection to. Your spouse or to your [00:13:00] kids or whomever, you could, decide you want to take out a policy and maybe eventually give it to, some charity.

[00:13:07] And upon your death they'll get a nice, sum of money. But realistically it depends. I was sharing before a story about a woman who said, I have some insurance. I know I want some more, but I'm not really concerned about really, my kids, when they get older, they're gonna move out and they're, they'll make it on their own.

[00:13:25] And I said, that's great, but let's face it, I said, what I can show you is how you can use that benefit even later and maybe use it towards your retirement. So I said there are, there, there are many needs for it. 

[00:13:43] Rich L: And so how would that look? Using permanent life insurance, there's a cash value component to it.

[00:13:47] Jim F: Correct. 

[00:13:48] Rich L: And there's always gonna be a cost of insurance, whether you're buying it through term or buying it through whole life. So that gets deducted out of your monthly or annual premiums. Right. On a monthly basis. Right. But then there's some residual cash because [00:14:00] it's gonna cost more that cash goes into.

[00:14:02] Uh, side account, sub account, whatever it was.

[00:14:04] Jim F: Account. It depends upon, again, depending upon type of policy, the type of policy. And that's why I said, I'd love to demystify a lot of this. But, and I'll, there's a lot to go, won't be here for hours. I would say, I look at life insurance is, it's especially on the permanent side, it's almost going to basket and Robins.

[00:14:21] There's a lot of flavors. There's a lot of types. And yes, they all may have cash. Value components, but how they get to those are differently. Some are using short term interest rates, some are using, I don't wanna say mortgages, from doing it. There are some that are based upon, indexes.

[00:14:40] So they all vary, but at the end of the day, they're doing it so the money gets paid in. They segregate out the cost of insurance. There's always that. Yeah. And then there's other administrative and mortality expenses, et cetera. And the balance will get put aside and get invested. Okay.

[00:14:59] In [00:15:00] some form. 

[00:15:00] Rich L: Right? And that's what you're talking about. Where if 20 years into it, 30 years or into it, you haven't passed away, thank God. So you didn't need it. There's some cash accumulation that you could potentially back out. Right? Take a loan out, withdraw.

[00:15:13] Jim F: Not every company does it.

[00:15:15] Exactly the same. Sure. Because, some are, you're immediately taking loans. There are some companies that say, and no matter what you do, it will reduce your death benefit. Sure. As you're taking it. However, there's companies where you have a, and by the way, on those where you're taking the loans that could exceed and eventually it.

[00:15:37] It'll dissipate. There are some, there's a company or two that actually have a, the ability that they'll give you a guaranteed benefit for the rest of your life, depending upon what the cash value is at that time that you wanna start it. And when it does deplete, you're, and you're still alive, you'll still get it.

[00:15:55] But it could become, instead of tax free income, which is what [00:16:00] I should have started with, is the fact that it, after it becomes a modified endowment account, it could then become taxable to an extent. But the fact is there's still income coming from it. 

[00:16:09] Rich L: And that's where you come in because you wanna make sure it doesn't turn into a modified endowment contract.

[00:16:14] And I think the insurance companies are well aware too. They don't want their clients to have that issue and that's when cash value life insurance becomes taxable instead of not taxable. Because the IRS deems it as not life insurance anymore, right? Insurance. That is correct. Yeah. Yeah. So, and obviously everybody should speak to their tax accountant about that, those, uh, situations.

[00:16:32] Right? I 

[00:16:32] Jim F: In the very beginning when you sit down Yeah. And I'm telling them I ask. I wanna know who's the accountant and, is this something that we need to bring he or she on board with as we're going through this? Sure. So that, it makes, gives them, I think, a sense of comfort.

[00:16:48] And I'm not trying, it, it's just to make them comfortable 

[00:16:52] Rich L: I always like to give tips and tricks, and we're not looking to trick anybody. And lying on a life insurance application is considered insurance [00:17:00] fraud, so we have to be careful, right? Yes. And I, whenever I'm helping clients through life insurance, I always give them some.

[00:17:07] Precautions as far as how they're, answering questions. Don't give too much information. Ask what they're asking. Do you have any tips?

[00:17:15] Jim F: You gotta read the question, right? I will tell you this was funny. There's a speeding ticket, all right? And it was extra.

[00:17:23] He was way over the speed limit. He was telling me about this, and I said, and the question, when did that happen? I'm keeping this really simple. Sure. And and I go, it's past the question. He said the time limit is well past it. Yeah. Don't even think about it to get it right as if it didn't exist.

[00:17:41] On the other hand, you're talking to somebody who's a smoker. That's the class. 

[00:17:46] Rich L: Oh, I don't smoke. And then all of a sudden, oh, you have tobacco in your nicotine. Yeah. 

[00:17:51] Jim F: Or today, whether it be indulging and doing vaping and doing and whatnot, and I tell them and they say, well, I'm gonna stop.

[00:17:59] [00:18:00] Well, great, let me know.

[00:18:04] Rich L: Yourself a couple of weeks or a couple of months. 

[00:18:05] Jim F: Well, even that unfortunately , I do have a fiduciary responsibility to them and tell 'em about it, but I do have a responsibility also to the company, to the insurance company.

[00:18:15] Rich L: We are field underwriters. The other thing that I always explain to clients is you have to remember we're the initial question maker, right? And they look for consistency. So if you tell me one thing and then you tell the medical underwriter something else, that raises a red flag and they're gonna look into it more.

[00:18:29] Jim F: One of the things I will say that's happened now is more and more companies. With the advent of AI and doing with all metrics, going in, so a lot of these applications now are electronic. Yep. Not even paper. And you fill in and so there's like a smoking question. All of a sudden you fill it in and then at the end they come back and say, do you want to change your answer?

[00:18:53] So you really have to be, cognizant of it. And I tell people [00:19:00] know what your medications are, what are they, doing? Who are your doctors? Sure. You're gonna say you quit smoking. Are they gonna see something in your records that you really didn't stop when you said you did?

[00:19:13] Yeah. So which goes to what you were saying about being consistent, right? Which is very important. 

[00:19:18] Rich L: Look, they also look at your credit history, right? They wanna make sure you could afford to pay it. Look, 

[00:19:21] Jim F: I just had an example with the young man who the grandfather wanted to have, insurance for his grandson.

[00:19:29] Right, and his granddaughter, but his grandson and he had some issues,

[00:19:33] but I figured it's standard. And it turned out he was in, he went to an emergency room for the hospital and the insurance company just was using the records that they got from whatever is nothing. It was very broad. And they came back and the underwriter came back and said, I have to decline him.

[00:19:53] And I said, for what? And I went back and got his doctor in the hospital and I got him a standard [00:20:00] policy.

[00:20:00] Rich L: You fought of them. 

[00:20:00] Jim F: Yeah. Yeah. And that's what, but that's what happens is with the records, they were getting, so they're not always complete. But this is now where you talk about the term or the stock company.

[00:20:12] They said, this is our answer. This is what's happening.

[00:20:14] Rich L: Sure. 

[00:20:15] Jim F: And I said, what do you mean?

[00:20:16] Rich L: Yeah. 

[00:20:17] Jim F: So AI is there, but you know, it's still, it's evolving.

[00:20:21] Right. And when I'm saying ai, it really just, the world of technology is to how get 

[00:20:27] Rich L: they're adapting. They're looking into things, right? Yeah. And the other thing is , when you're applying for life insurance, there's the owner, there's the insured, and then there's the premium payer, right?

[00:20:37] Mm-hmm. You mentioned a, a grandchild, right? I wanna buy my grandchild life insurance.

[00:20:41] There has to be an insurable interest too. Like you can't just look at a stranger and go, that guy looks really sick. I wanna buy life insurance so that when he dies I can make money off of his death.

[00:20:51] Jim F: The grandfather, it was interesting is they can do it right because he has an in triple interest, and he was [00:21:00] actually until such time I, we, I made him originally the the beneficiary, even though he, and he was the premium payer, subsequently the, he passed away, the father was involved and now he's a of the majority, so that , he has his own policy.

[00:21:17] Rich L: So beneficiary designations can always be changed afterwards. Yes. They're not, they're not permanent. 

[00:21:22] Jim F: No, you can change them and, and if you're not, and. Someone else can't, even, the beneficiary can't call in and get information. Sure. They can find out if the policy's in enforce.

[00:21:34] Right. That's about it. 

[00:21:36] Rich L: Yeah. So a lot of times, sitting with clients, you also have to prepare them for what they're about to go through with the underwriting process. They're gonna ask medical questions and I remind clients that this is a. A public or a private company that's in business to make money, they want to earn money, right?

[00:21:54] They're allowed to do research on your health and they will do the research if they deem it necessary. And they will [00:22:00] continue to dig. If they find something, they're gonna ask for medical records, they're gonna ask for, what the doctor had to say. And a lot of times if somebody gets declined or rated, sometimes clients get a little upset and I say, they have a right to rate you.

[00:22:14] Exactly. 'cause they're UR your life. So I, I think ultimately, when you're looking at an application, how do you prepare somebody for, I think you started to say it and I might have interrupted you about getting all your doctors records ready.

[00:22:29] Like those are the tips that you should 

[00:22:31] Jim F: You may be telling them who the doctor is that has their records, and you may want to. Ask if you can see them before then and doing. You may. 

[00:22:40] Rich L: Just can't change 'em.

[00:22:41] Jim F: You can't, but on the other hand, you go to the doctor and all of a sudden you, you're telling them everything and little do they know, the fact is they're taking their notes and guess what you're talking about is there. So you should know what's in there, in that regard.

[00:22:57] Rich L: And some of the life insurance, and [00:23:00] again, life insurance is designed for a death benefit. We know that. Right. But there are some, permanent life policies that have some living benefit riders and stuff that you could talk about. Yes. And it could be a disability benefit rider.

[00:23:11] Where if you become disabled, you don't have to pay your premium anymore. Like a disability, 

[00:23:15] Jim F: waiver. 

[00:23:15] Rich L: Waiver a premium. Do you typically recommend things like that? 

[00:23:19] Jim F: First of all, you, let's separate 'em out. Yeah. 'cause a, a waiver of premium is for permanent disability.

[00:23:26] If you're permanently disabled for six months, and at least in that regard, and then your premiums or the cost of insurance could be waived for, either permanently or for until such time as you, make it better. Or what have you, but that's not really a living benefit per se.

[00:23:46] Okay. The advent of living benefits, really goes back, even believe it or not, to thirties, where you had these, what they call these ADPs, and what they did is, people, what I'm talking about is having a [00:24:00] terminal illness where then they were able to access. The death benefit in advance or part of it, maybe not the full amount.

[00:24:09] And they would get that benefit tax free, and it stayed that way for a long time up until maybe 20 years ago. It's almost it's like the telephone. All it was the telephone, you used it, hello, and you hung up. Now you know you can be on your cell phone and , and it's a computer.

[00:24:26] All of a sudden it can do so much, more. And that's what's happened with, even with life insurance. So what's happened is the quality of life, there's more, what are living longer. Sure. But the quality of life may not always be good. You have a heart attack, you have, people who have, when it first started AIDS there could be, a stroke, there could be a burn, it could be what, anything along that line.

[00:24:50] So insurance companies started creating, these living benefits, or accelerated benefits. And [00:25:00] so it from company to company.

[00:25:02] And by the way, the states are the ones who dictate the policies, right? So it may vary from state to state, even from the same company. Believe it or not, as to what they offer.

[00:25:12] Sure. But they allow you to access, depending upon the condition, a certain amount of the benefit. 

[00:25:18] Rich L: One of the newest ones is, uh, a life insurance hybrid with long-term care. 

[00:25:23] Jim F: Correct. That is the next step. Step, if you will, that they had chronic, but that you really can't equate it to be a long-term care.

[00:25:33] Right? It, it looks and smells and almost acts like it. It's really deficient compared to what is 

[00:25:40] Rich L: chronic would be cancer. Chronic would be,

[00:25:42] Jim F: if you can't do two out of the, two daily activities, that's what we're talking about, to the amount that's an IRS,

[00:25:49] Rich L: yeah. Definition.

[00:25:50] Definition, exactly. 

[00:25:52] Jim F: But you're right. So a lot of the companies, especially in the permanent companies, have created these hybrids or with a, a [00:26:00] rider, which does cost. 

[00:26:02] Rich L: Little extra. 

[00:26:02] Jim F: Yeah, it will cost you more, but it would meet and smell for most cases, like a long-term care policy. So God forbid you have both.

[00:26:11] And if it does, so some companies again vary. It may deplete some of the death benefit. Right. But if you die while you're on claim with that, then you're. Beneficiary will get both. But I do want to add one thing. There are companies that actually have living benefits, believe it or not, sitting on top of term insurance.

[00:26:32] Okay. Which to me is great, because especially if you're talking to a, anybody but a young person, they're thinking they're going, they don't understand it, but at least. You know that you are doing a good thing because they now have these, benefits that they didn't even, God forbid, something happens that they didn't even realize.

[00:26:53] You're, they're gonna know about it when you sell it to them. Sure. But, we all forget. But you forget. It's at no additional [00:27:00] cost. It's embedded into the pro product. That's right. 

[00:27:02] Rich L: And I think ultimately that's why, we see a lot of online apply for life insurance online, right? Oh gosh.

[00:27:09] And a lot of times what I always find is we're cleaning up after they do that, right? Because they've made mistakes. They don't realize. Life insurance is something you wanna speak to what Jim Feldesman been about. It's some you wanna speak to your advisor about 'cause it is complicated. And the other thing I'm just gonna touch on, 'cause you mentioned it before, is about insurability.

[00:27:28] When we're young, it's the least amount of money, right? Correct. We might not have any illnesses, but as we age and as we start getting diseases or injuries.

[00:27:39] Like a heart attack. Somebody has a heart attack, they might not get life insurance now for five or 10 years. Or if somebody comes down, God forbid they have cancer, they're not gonna get life insurance for the rest of their life.

[00:27:49] So it's important to think about that before those things come around. Exactly. 'cause then you'd be uninsurable. 

[00:27:54] Jim F: Which even goes back to what we used said even at the very beginning, is the fact if somebody's like, why do I [00:28:00] need it? You're talking to a 20-year-old who you know is invincible.

[00:28:04] Yeah. In doing it, and I'm, believe me, I'm not saying that you need it. So is, if you want it, you want to protect your insurability and then eventually make it permanent, or do you wanna build up equity at this point and have the death insurance, but. The reality of it is that it becomes a nest egg for you, at some point in the future.

[00:28:24] Yeah. Hey, that's terrific. But you're doing a couple of things for yourself, but I'm not pushing it. If anything else, at least, take a certain amount of term insurance and, 

[00:28:35] Rich L: be able to convert it later on if you, 

[00:28:36] Jim F: and convert it later on, sure. So you have permanent.

[00:28:39] To your point. 

[00:28:39] Rich L: And let's remind our listeners what doing a conversion is like. So you have, maybe it's a half a million dollar term policy or a million dollar term policy and you're getting in your thirties or something. You might want to start converting some of it and you're already insured by the insurance company, correct.

[00:28:55] So you're just moving the type of policy, paying more, but you don't have to go through your [00:29:00] underwriting process again. 

[00:29:00] Jim F: None. It's all, it's just you already have the life insurance, just a stroke of the pen signing on a, on a piece of paper, and you're saying, okay, I'm willing to pay more and 

[00:29:09] Rich L: have, build up cash and build 

[00:29:10] Jim F: up and build up equity in it.

[00:29:12] Rich L: And you're doing that because term insurance will eventually end, right? Where permanent, as long as you continue to pay your premium, it'll last for as long as you're paying your premium. Hopefully

[00:29:19] Jim F: or at some point, depending upon the policies, it may, while it may not be guaranteed.

[00:29:25] there may be sufficient value in the policy that will continue the premium, the payment of the policy. And you may never have to put another dime into it, at a later point.

[00:29:36] Rich L: And that the last question you and I were around when most insurance companies were considered mutual life insurance companies.

[00:29:43] They're now considered, privately or public insurance companies, right? Covered like Prudential used to be Prudential Mutual, right? Which meant that when you bought a policy, you were a owner of that company, but now Prudential is a, a public company and you'd no longer receive dividends because you're no longer an [00:30:00] owner of the company.

[00:30:02] Jim F: Good question. I try, and even from my standpoint, when I'm dealing with the companies, there's a difference. Yes. I do write with stock companies. Okay. But I prefer to write with companies that are still mutually owned, which means they're owned by the policy owners. Yeah. It just seems to be, not that it's easier, I think that they just, uh, it's handled differently and it gives you, and because they're not answer, they're answering to the.

[00:30:32] The policy holders, they're not answering to the stock. Correct. And I think that is a difference. 

[00:30:37] Rich L: Right.

[00:30:37] You also get paid dividends eventually, right? Hopefully if you have a cash policy. 

[00:30:41] Jim F: Correct. Depending, again, it depends, dividends being, with a whole life type of company would pay a dividend.

[00:30:48] Others have other ways of implementing values to go up. 

[00:30:52] Rich L: Thank you for joining us. My pleasure. Do you have a, any other pieces of information that you think it's necessary for our listeners to hear about life insurance? Anything that we haven't [00:31:00] discussed so far?

[00:31:01] Jim F: For a very short period of time, we covered a lot. 

[00:31:03] Rich L: Yes. 

[00:31:04] Jim F: And there's a lot more we can do. We could probably have three or four more we could do. Sure. But I think it is finding somebody who you feel comfortable talking to, you, trust, especially if it's a referral, then hopefully that person you can trust even more.

[00:31:20] You talk to people you may want to interview, you may, you know if you don't have anybody, and find out are they really listening to you as to what your needs are. I think that, that's a key. And, look, it, I have the gray hairs. I've been at this long enough, so there's very few stories and things that I have not heard.

[00:31:40] It's not an easy area, but it doesn't have to be, definitely terrible. 

[00:31:45] Rich L: And you can ask for help. You can always, that's why we have to have a license to be able to talk about it. 

[00:31:49] Jim F: Correct. 

[00:31:50] Rich L: Because it's complicated. Yeah, 

[00:31:51] Jim F: it is complicated, at the end of the day, it will protect you.

[00:31:55] Rich L: And how can our listeners get in touch with you if they're interested in, in getting in touch with you? 

[00:31:59] Jim F: You [00:32:00] can reach me at (914) 552 - 2330, or you can email me and I have a little link in there even, to set up a time. But my email is, feldesman_James@nlgroupmail.com.

[00:32:18] Rich L: Thank you very much for joining us.

[00:32:19] Jim F: Thank you. 

[00:32:20] Rich L: I hope to have you back again and we can dive a little bit into all. I welcome all these fun stuff to talk about. So thank you very much everybody. I appreciate you, uh, listening in today. If you have any questions about life insurance, if you're interested in talking to Jim, you can catch up on his information on the podcast.

[00:32:36] Please remember to like, share, subscribe, share this podcast with those that you love, that are in your family that you think should. Buy life insurance, and just tell them to have a conversation with a professional. I think it'll be very helpful, if you do that versus going online and trying to get a quote for online life insurance.

[00:32:57] It's a lot of work. Don't forget to, [00:33:00] check us out on www.enrichlifepodcast.com. We are on all of your major podcast platforms. And, we'll see you next time. Thanks so much.