Term Life Insurance FAQs Answered by Lifer Jason Lee
In this episode, Anthony interviews his friend Jason Lee, an insurance and financial advisor. Jason has been in the insurance industry for almost 12 years after taking over his father’s business in 2007. Today, he walks us through life insurance and answers common questions people ask regarding it, including, the difference in term and whole life insurance, the pros and cons of both, when to buy an insurance, and a lot more. Tune in as he and Anthony give you, our listeners, the information you need to know before getting an insurance.
- Life Insurance
- Term vs Whole Life Insurance
- When to buy an insurance
- The cost of life insurance
- The importance of life insurance
- What you need to know when purchasing insurance
- 00:13 – Anthony introduces Jason
- 00:28 – Jason’s background as an insurance and financial advisor
- Following his father’s footsteps
- 01:55 – What age should you buy life insurance?
- There’s no defined age
- Life insurance is needs-based
- 03:08 – The benefits of starting out early in insurance
- 04:07 – The cost of life insurance
- Dependent on the type of insurance ○ Term and permanent life insurance ○ The amount of insurance
- 05:24 – Jason gives examples on insurance costs
- Stay-at-home parents’ value vs the Breadwinner’s value
- 10:01 – The importance of life insurance ○ The roadmap from now to death
- 12:01 – What life insurance is for you
- Term life insurance is a temporary answer
- Whole life insurance is a permanent policy
- 15:06 – Life insurance, cancer, and risky pursuits
- The important things: Suicide Clause and Contestability Period
- 19:57 – Is term life insurance worth it?
- YES! Be protected for sudden death
- 21:51 – Buying term life insurance
- Pros and Cons of buying online and through an agent
- 27:51 – Online purchasing
- Select Quote
- 29:00 – The biggest mistakes to avoid when applying for insurance
- 29:33 – The secret to getting the best insurance
- There is no defined age to buy insurance, but getting it early gives you an edge.
- The insurance you need depends on your needs and priorities.
- Having an agent assist and guide you is a better choice than buying insurance online.
Link and Resources
Call or text 212-401-2990 if you’d like to work with Anthony (or any of our guests).
[Anthony] Today I’m talking with my good friend Jason about term life insurance. Jason will answer some of the most common and frequent questions about term life insurance. Here we go, Can we start with telling us a little bit about your background and how long you’ve been in the life insurance business.
[Jason] My name is Jason Lee. I’m an insurance and financial advisor. I’ve been in the business since 2007, so I’m now in my 12th year. I’ve basically followed my father’s footsteps, because he was in the insurance business for close to 31 years. When he retired, I pretty much took over his book of business and have expanded on that since then, which was 2007.
[Anthony] Yeah, I gotta tell you, that’s huge. ‘Cause in my experience as an estate attorney, I deal with a lot of insurance agents, I was telling you this before Jason, and you know, you just never know if someone’s gonna some be in the industry, you know the next year, or even the next day, it just tends to be a lot of turnover. So, just knowing that you’re gonna be around, that’s huge. Just being here makes you immediately one of the top-tier agents.
[Jason] Well, you know, there is a lot of turnover in this business. As with any quote/unquote sales-type position. But, it’s important to be able to maintain longevity, because that is important, I mean especially when you’re in a service oriented business and people are sort-of trusting your expertise and relying on your knowledge, you want to be around when they need you most, and a lot of times in this business, it’s not tomorrow or next month, it’s 10 years, 20 years, 30 years later. So, that’s very important to me and that’s why I try to work as hard as I can to not only survive, but to succeed in this business.
[Anthony] So I’ve pulled up some of these questions that seem to come up very often, and thank you for taking some time to answer these. I’m just gonna start firing away if that’s cool with you. So first, at what age should I buy life insurance?
[Jason] Good question. There really is no defined age when you can consider it appropriate to buy life insurance, and here’s why, I hate to say it, it’s kind of a maybe breaking news, but at some point we are all going to die. Much as I hate to say it, it’s a fact. A proven fact. However, there’s also a sense of needs-based analysis when we deal with life insurance. So, it doesn’t really depend on your age, I want to say it depends on your situation, and more or less, what are you trying to protect. Because that’s what life insurance is, it’s a form of protection. So, again, no set age, but it’s more when you have the need for life insurance is the right age to get it. It could be 22, it could be 25, it could be 35, it could be 50, you never know. It really depends on your situation.
[Anthony] So, we’re both in our, we’re about the same age in our, I’ll just round it down and say we’re in our late 30’s. If I recall correctly, there is a point where your physical, your blood work, your age starts becoming a factor in how much premium you’re going to pay, so is there any benefit to getting started a bit earlier?
[Jason] Absolutely, yes. Life insurance, the best form of life insurance, in most cases, is the most inexpensive form of life insurance, and the only way, or the best way to qualify for the most inexpensive life insurance is to do it when you’re youngest and when you’re the healthiest. That doesn’t mean that you have to do it this minute, but generally speaking, people who are in a higher age group as opposed to people who are in a much younger demographic tend to be quote/unquote unhealthier, or tend to have more health issues. So, time when your youngest and at your healthiest is the best time to get it.
[Anthony] So then I’m sure a lot of young people are thinking, well that’s all well and good, but when I’m, you know I’m still starting my career, I don’t have a lot of spare income. So, can you talk a little bit about how much life insurance costs? Maybe give us a couple of examples based on age and health and that sort of thing.
[Jason] When somebody asks, how much does life insurance cost, it’s a very, very, a vague question, because it depends on so many factors. Mainly, it depends on the type of life insurance that you get, because there are so many types of life insurance. But it really boils down to term life, which is a temporary life insurance, or permanent life insurance. But also, it depends on the amount of insurance. So, if somebody is getting a policy that’s worth 25 thousand dollars and somebody’s getting a policy that’s worth 25 million dollars, obviously there’s going to be a significant difference in cost. So, life insurance can be as cheap as eight dollars a month, but it could be as much as 8000 dollars a year, it just depends on the type of plan you get, as well as the amount of insurance coverage that you get.
[Anthony] So let’s talk about, I mean I’d like to give some at least ball park examples, I mean, let’s talk about the prototype, and this might not be your prototype, but this is kind of my guess, a 30 year old couple, husband and wife, you know reasonably good health, they’re just starting their family so they want to get insured. And they want, let’s say, half a million dollars in term coverage, are you able to just give us a ball park, non-binding of course, but of what someone should expect.
[Jason] A healthy 30 year old couple, maybe they have a few young children, maybe they just bought a house, their dream house and they have a big mortgage, both of them are working and they both have nice salaries, but if God-forbid something happened to either of them or both of them, there’s gonna be a huge need for income replacement or cash needs for emergency costs and funeral/burial expenses, things like that. Say for example, a half million dollar policy on husband and wife each, a half million on each of them, healthy 30 year old couple, we could go as short as a 10 year term life insurance policy will probably cost in the ball park of 40 to 50 dollars a month combined. If you’re looking at something a little bit longer, maybe a 20 year plan for them, maybe you’re looking somewhere in the neighborhood of 60 to 70 dollars a month.
[Anthony] And, I just want to re-stress, because you know people out there have crazy ideas about insurance, these are just ball part figures, you know. You need to come in and do your physical or something to figure out your exact rate.
[Jason] There is an actual software we use for various insurance carriers where we can actually find your exact, let’s say an estimate of your exact rate. Mind you, life insurance is based on your current health, as well as they look at some health history. If someone does have some type of medical history. We will never know your exact quote until after the underwriting process is complete, which consists of a health background check as well as a blood and urine test.
[Anthony] You know, since we’re on this topic, we just kind of used this example, how much insurance should somebody buy? What amount seems to make sense, I guess based on the various situations.
[Jason] So, the number one thing, especially with a young family, we look for income replacement. So, it depends, if both spouses are currently employed and earning income, obviously there’s gonna be two different income replacement needs there. So, we usually encourage, especially if your kids are still rather young, I’m saying young meaning under the age of ten, we like to encourage 10 years of income replacement. So, if someone earns 100 thousand dollars a year, right there, times 10, that’s a million dollar policy. That’s sort of the norm, but you don’t have to follow that formula. Five years of income replacement, fifteen years, it just depends on what you feel comfortable with, what you sleep better at night knowing that you have the type of insurance you have in place. That’s not the only thing that would determine, because we also look at the age of the child or your children, so if you have one spouse who’s working and one spouse who’s a caretaker at home, then the spouse who’s working, the quote/unquote breadwinner, we would need to replace his or her income, but then the stay at home spouse also brings a value to the household that you can’t really put a monetary value on, but we try to, there’s a multiplier that we use to try to at least estimate what their value to the household is. And it’s a combination of years until the child turns 18 and becomes an adult, as well, it’s the cost of the typical child care or daycare or even afterschool program so that the child is being looked after in their neighborhood.
[Anthony] Yeah, Jason, you gotta be careful there. I think a lot of stay at home parents would shake at the idea that you could calculate their replacement value by local daycare
[Jason] Right, so what ends up happening, is a lot of times the stay at home spouse ends up having a higher monetary value than the breadwinner of the family,
[Anthony] Oh, really?
[Jason] Yeah, absolutely. The breadwinner, if he’s got three young children at home, and the spouse is the one that runs everything at home, drops off the youngest at daycare, drops off the middle one at pre-k, drops off the older one at their elementary school while the other spouse is off to work in the morning, and then God-forbid something happened to the caretaker spouse, then guess what, now the working spouse needs to find someone to take care of those same needs that the other spouse was doing, and a lot of times that ends up costing more. So, when you do a actual immediate insurance need analysis, the caretaker spouse could end up having more of a value than the breadwinner spouse.
[Anthony] I mean yeah, as parents I’m sure you and I both agree that probably makes sense, yeah. So, these are not really in great order, but the next question I have for you is just kind of a general one, why is life insurance so important?
[Jason] It’s very important because it’s just the fact that when you’re a young family and you have young children, it’s sort of a road map from now until basically death, let’s say. Now you’re in a phase of life where you’re trying to, number one, work hard, accumulate your wealth, build up your nest egg. While you’re doing that, you’re also raising your children, trying to make sure they become good standing citizens as adults, there’s a whole process. You’re basically on a road map towards your end goal, which is to retire and to live comfortably and not have a worry in the world. But along the way, while you’re working so hard and just keeping busy to get to that end goal, there are going to be road blocks, whatever that may be. Health, it could be financial, it could be God-forbid you get laid off or lose a job or you lose a family member, what have you. But the biggest road block to getting to that end goal is the death or disability of either spouse, either of the parents. Basically what happens is, while you’re on this road towards that end goal, to be, again, retired, in a good place, a happy place, death and disability is considered the biggest stumbling block to get to that end goal. And therefore, a way to make sure that even if God-forbid something happens, there would be death or disability, it still enables the surviving spouse to still get through it and get to that end goal, even if it has to be alone. But unfortunately, it’s a part of life, so we never know when it’s gonna happen.
[Anthony] You talked earlier about term life insurance as well as whole life insurance, or I guess temporary verses permanent, can you talk a little bit about which type of life insurance somebody would need, maybe describe each and give a couple of example scenarios of when it makes more sense?
[Jason] Okay, so first I’ll start by saying the main difference between the two. My best analogy, this is as good as it gets, to determine, to know the difference, is just think of a house. Buying a house as opposed to renting a house. Either way, you need a dwelling, you need a place to live and to sleep. But, when you’re renting a house, you’re paying your rent, you don’t own anything, you’re just using it temporarily, whether it be a year, for five years, whatever it is, but as your paying that rent, and there’s gonna be no value to show for it in the long run, but you’re still getting a place to live, which is necessary. When you own a home, it’s gonna cost more, but even though you’re paying every month similar amounts, or maybe even more a lot of times, at the end of it or later on, there’s something to show for it, because now you have a house that’s hopefully growing in value that you own and also there’s gonna be some access to funds if you need, whether it be a line of credit or home equity loan, basically there’s equity being built in your home that you can access later on, whether it be from retirement or wherever any kind of emergency income comes from.
[Anthony] So how does that apply to life insurance?
[Jason] Life insurance is the same thing. term life insurance is very, still necessary, but it’s a temporary answer. It could be one year, five years, 10 years, 20 years, even 30 years, but it’s basically coverage that you get just during that term, during those number of years that you are getting the policy for. So, If it’s a 20 year policy, you’re getting that coverage, it’s a cheap premium, the premiums you pay, it’s going to the company, you’re never going to get it back, but God-forbid something happens to you within those 20 years, you’re protected and if you live beyond the 20 years, great, congratulations, you’re still alive, but the premium you paid, guess what, it now belongs to the insurance company and now you have no coverage. So there’s nothing to show for it, but it’s still very necessary. The Whole Life insurance is different where, number one, it’s a permanent, so it lasts forever, till the day you die, the only problem is the premiums are gonna be a little bit more expensive, but even though they’re more expensive, in the long run, as you pay those premiums, guess what, you actually now have this something similar to equity, you could even call it equity. But it’s something we call a cash value in your policy where you could actually use that later on for, again, retirement, insurance needs, suddenly you decide you want to go on vacation or you wanna help one of your kids pay their student loan back, whatever it may be. So, it gives you some additional benefit in the long run with the whole life insurance.
[Anthony] So, I have a couple of very, very specific questions that, for whatever reason, come up a lot. Hopefully you know the answers. Will life insurance cover Cancer? I guess they mean death by Cancer.
[Jason] So, here’s the deal with Cancer. If someone has Cancer, they’re not gonna be able to get life insurance, unfortunately.
[Jason] Once you get life insurance, Cancer, basically any death is covered. It doesn’t matter the type of death, once you get your policy and your policy is enforced, as long as you’re paying the premiums, you’re covered. And it doesn’t matter if it’s Cancer, if it’s a bus accident, whatever it may be, you are covered. Life insurance does cover Cancer.
[Anthony] Hopefully that answers my second question which is, does life insurance cover skydiving? Or, I guess any other risky pursuits?
[Jason] This is actually very common.
[Anthony] Oh yeah? Cool.
[Jason] Skydiving or any kind of hazardous activity, the way they treat it is, if it’s something that you do on a regular basis, or even not on a regular basis, at least a few times, you would have to disclose that. There is a question about hazardous activities. And if that’s the case, usually they’re gonna want to know exactly what activity it is, if it’s skydiving or hot air ballooning, or hang gliding, whatever it is. And they’re gonna want to know how often you’ve done it, when was the last time you did it, and when are you planning to do it again. And if you do have definite plans to go skydiving one day, then you would have to disclose that. And the reason is, if you do not disclose it and then you go skydiving a week later, pass away, they’re gonna wanna, they’re gonna investigate. Now, if you do not have any plans to go skydiving, but then maybe a year later, you decided, maybe a friend called you up and says, you know what, let’s go skydiving, then, yeah, you did not disclose it, but you didn’t know, so therefore, you are covered. However, the insurance company will still try to investigate and see if maybe you made reservations before hand, or what have you. They’re gonna try to see, as best as they can see, look for proof that you sort of hid that information from the insurance company.
[Anthony] Interesting. So do you tell your existing clients, your existent policy holders to check with you before they, that it’s okay to email you or text you if they’re about to do anything like that?
[Jason] I have had them ask me before hand if they you know, before they go on, maybe they have a trip like that. Here’s the important thing, any type of life insurance, doesn’t matter what company it is, is gonna have two different clauses on it, two year clauses, both of them. One is a suicide clause. The other is a contestablility period, which is both two years. When you purchase life insurance, any suicide within the first two years, the insurance company automatically reserves a right not to pay the claim. You will get your premium refunded, but your beneficiary will not get the insurance claim. After two years though, suicide is covered. The contestability period is also two years, meaning any death withinin the first two years of a life insurance policy, the insurance company has the right to investigate and to test if they see that there was blatant fraudulent activity, meaning a lie, hiding Cancer, hiding some illness, a major serious illness, misstatement of personal information, whatever it may be, any type of, now if it’s something where you gave an incorrect number on your driver’s license or something like that, that’s not gonna be an issue, but if it’s a blatant,
[Anthony] Kind of like hiding a family history of something, something like that?
[Jason] Family history they don’t, it’s hard to really,
[Anthony] Oh, okay, never mind.
[Jason] Something that they’ll blatantly catch, most common is like something related to Cancer, a tobacco user who says they don’t smoke, but then in their medical history it says that they’re a heavy smoker, something like that. That’s for two years. After two years, though, that’s also out the window. Once an insurance policy is in place for at least two years, pretty much any death is covered.
[Anthony] That sounds like another good reason to insure earlier than later.
[Jason] Sure, yeah.
[Jason] Now I will say, some insurance companies, not really any of the ones that I represent, but you know, any insurance company is always going to look for a reason not to pay out, whether it’s home insurance, automobile insurance, whatever. It’s just unfortunate because at the end of the day, the insurance companies, when they pay a claim out, guess what, it’s coming out of their pocket, so.
[Anthony] I mean, that’s the business model, right?
[Jason] Contractually in the life insurance policy, after two years, you’re pretty much covered no matter what, even suicide.
[Anthony] This next question is a little um vague as well, so maybe you can drill down with some specific examples. The question is, is term life insurance worth it? Maybe you could give an example of how much the actual premium amounts would aggregate to over the course of a lifetime. And then you know, something like that, how much risk they’re mitigating by paying that amount. I don’t know, or maybe you have a better way of answering that question. Again, is term life insurance worth it?
[Jason] The short answer is yes, absolutely it’s worth it because you want to protect against the unknown in the event of a sudden death, which is what terming life insurance is. Depending on, as long as you’re in good health and it’s a very inexpensive premium, yes it is absolutely worth it. And the reason I say that is because if you think from a leverage stand-point, the inexpensiveness of the term life insurance as opposed to what the payout would be if God-forbid something did happen to you, it makes it worth the risk. However, if you were to take a 20 year period where you paid term life insurance premiums and compared it to what you would be paying on a whole life insurance policy, in terms of how much going out of the pocket and how much you sort of get back, then it makes it look like term life insurance is not worth it. So, it really just depends on the situation of the person. If it’s someone who, again young family, limited budget, or tight budget with an absolute insurance, a high insurance need, because, again, age of the kids, a mortgage, maybe outstanding student debt, just general debt, things like that, yeah, term life insurance is not just worth it, it’s probably necessary.
[Anthony] Yeah, totally agree. It’s one of the sort of basics that we recommend for anybody getting their financial affairs in order. term life, Avail, max out your 401K, all that good stuff. Where should you buy term life insurance? And, I think that’s a question about whether or not to buy it through a live, personal agent such as yourself, or online somehow? Can you talk about that a little bit?
[Jason] So, with term life insurance, it could be purchased online, definitely an option, I don’t discourage people from doing that, but the only down side to that is if you’re, you know sometimes coaching is important when you’re applying for life insurance. So, when you’re applying for life insurance, it’s a pretty comprehensive process. They’re gonna ask a whole lotta questions. They’re gonna ask health background questions, things like that. A lot of times, you would think, alright, I’m in good health, I’m young, I have nothing to worry about. But, there are certain things that if you answer, there’s certain questions that can be answered a certain way, still being honest but not necessarily revealing things that don’t need to be revealed to the insurance company. So sometimes having someone who’s in the business to advise you on that, which is what my job is, may be helpful. And I say that because I’ve had cases where somebody tried to get insurance on their own, and because of some type of history they had many, many years ago that doesn’t even apply anymore, that most insurance companies wouldn’t even care about, but because they disclosed it, their premiums got increased. So therefore they decided not to take the insurance. And so I had to, once they came to me, we were able to reapply and get a much more reasonable rate. So, it does help to have someone, again, like an advisor type person or broker to coach you along the way.
[Anthony] So, okay, what happens, in terms of service level, if somebody purchases their term life insurance through online or through an 800 number, or however it works, and then they go through the application process. After that, do they have a point of contact or are they just dealing with the 800 number phone bank the whole time?
[Jason] Yeah. Usually they’re gonna have an 800 number on the actual policy that they have. Also, they’ll probably get a annual insurance summary, just letting them know the amount of coverage and so forth. Those things, those mailers that they get will always have an 800 number for them to call, so of course there’s gonna be menu options, you’re gonna have to go on hold, you’re gonna have to wait for representatives, but typically yes, they do have that available.
[Anthony] But they don’t have a dedicated person to serve them in any way, no?
[Anthony] That’s terrible, especially if like, if the spouse passes away, and the surviving spouse needs, through this very traumatic period figuring out how to claim her insurance, she’s dialing through all those codes on the 800 number? That sounds terrible.
[Jason] Yeah, and then you also have to ask for the death claim kit, which they probably mail to you. Maybe they could email it to you or fax it to you. Then you gotta go through and fill out all those pages out on your own. They’re gonna give you instructions, but make sure you can understand what they’re saying. Once you send it back in, hopefully everything will be in good order and they’ll cut a check to you.
[Anthony] How would it be different if they worked with a live agent like yourself?
[Jason] Hopefully a live agent, I know I do this for any surviving family member whose spouse unfortunately passed away, is they would come to you. They would come to you in their greatest time of need, when you sort of need some hand holding, and maybe even a shoulder to cry on sometimes. Our job is to come to you and make it as easy as possible to get through this difficult time. But also to make sure that no additional unnecessary stress is put on you. You know, dealing with an insurance company and the claim paperwork and stuff, it could just get a little overwhelming so our job is to, I even start filling it out before I meet the person. I come to them, tell them exactly what I need. Death certificate, ID, driver’s license, kind of whatever,
[Jason] Get it all done there, one shot, and then I’ll take it back to my office and have them process the claim, and then I’ll have a check sent out. Or, the check, they’ll give it to me, and I could bring it by hand. Because, while it’s safe, it’s always nice to get it immediately, rather than,
[Anthony] I mean, is there any fee difference or premium difference for someone to purchase online or through an 800 number?
[Jason] No, ’cause insurance companies are gonna have their general, their rates are pretty much across the board, whether you buy through an agent, whether you buy online, it’s the ones, when you go online though, sometimes they do have companies that can be a little bit more competitive or a little bit more expensive than the ones that I would or an appropriate agent would represent, but you also have to be careful with who that company is, because insurance companies just like banks or other financial institutions, they have credit ratings and they have these rating agencies who give them a grade. And those grades are important because it’s going to determine how financially secure these companies are, and when you’re purchasing an insurance policy, the most important thing is to make sure that, that company has a business model that would enable them to stay in business not today, again, not next month, but 10, 20, 30, 40,
[Jason] Maybe even longer, because the, that’s when the insurance company has to be there for you, so you want to go with a company that’s at least an A rated company, I would say, and with at least, from an assets under managements stand point, has a secure amount of reserves under their management. Because, again, when you get a life insurance payout, it’s coming from their pockets, so if they’re broke, then their not gonna be able to pay you when God-forbid one of your spouses passes away.
[Anthony] One last question on this topic, ’cause it’s actually quite interesting to me, the online verses a live agent. Can you explain to me, if I ever call, you’re able to get quotes and purchase insurance for your clients through pretty much any insurance company, because you’re sort of a broker between the client and these various insurance companies. When somebody goes online, is it the same thing, or are they applying online for one particular insurance company? Do you know how it works?
[Jason] Sometimes it is, even when you go online, it’s going to be a company that’s sort of a brokerage, but an online based brokerage server. I think the most common is a company called Select Quote. If you go onto selectquote.com and you punch in your information and they’ll give you a bunch of quotes for different companies. It’s the same thing as going through a broker. It’s gonna also give you choices where, very, very inexpensive choices, and it doesn’t really require you to do anything, other than just click. So, there’s no live person, again, who could give you that coaching or even give you the one-on-one assistance that you would need to get, number one, the best rate, and the most optimal coverage.
[Anthony] Seems like a pretty big decision to try to do on your own through help menus right?
[Jason] I have to sift through all those menus all the time, so,
[Anthony] Hey listen, so I have three more questions that we didn’t talk about in advance, do you mind trying to do these on the fly?
[Jason] Not at all.
[Anthony] So, first one, and you’ll probably notice that these are written in a sort of internetty style, what are the biggest mistakes somebody should try to avoid when applying for or thinking about life insurance?
[Jason] The biggest mistake is not being properly prepared before they apply, meaning, again, maybe not getting that coaching, and perhaps revealing something that they did not need to reveal and therefore paying a premium that’s a lot more than what they should be paying based on their age and health.
[Anthony] Oh, that sounds like a legit answer for sure. So, this is the next one, again, same vein, in your experience, what is the biggest secret for getting the best insurance, the best premium, or the best deal?
[Jason] I mean, there’s no really secret, it’s really, again, just based on your situation. Again, agents help, is the most important thing, but when it comes to health, one important thing is, insurance companies also have their own underwriting guidelines. So, depending on your health situation, if there is some type of minor issue, and it doesn’t just have to be health, it can just be some, you know, just your general situation, some insurance carriers might treat a certain issue different than another insurance carrier. So, depending on what your situation is, it’s good to always get that out in the open with your agent or broker, because your agent or broker is there to help you to get the best rate. They’re not trying to get you the highest rate because it’s better for the insurance company. So, knowing that we can find the insurance carrier that’s best for your current situation. I wouldn’t call that secret, but maybe that’s not as commonly known that we can shop around like that.
[Anthony] Yeah, no, yeah, don’t sell yourself short. There’s a lot of stuff that you probably, it’s probably so second nature to you, you don’t realize that it’s really great information for everyone else out there, you know?
[Jason] Just because one company says that, oh, you know what, we have to raise your cost this much, that’s our quote. Well guess what, another company might, with the same, looking at the same information, might treat you differently and give you a better rate. That happens, it’s very common.
[Anthony] Last question, Jason. Thanks again for taking you time on this. Tell us about how rich people’s life insurance is different from the rest of our life insurance, aside from obviously it being a much larger amount? Are there some strategies or tips or hacks that they use that the rest of us don’t?
[Jason] No, I wouldn’t say, because it’s all relative. I mean, if somebody makes 10 million dollars a year, and you would think, you’re going back to the same concepts of income replacement and income and cash needs analysis. Someone with a 10 million dollar a year income might need 100 million dollars in life insurance. Someone with 100 thousand dollar a year income might need a million dollars of life insurance. So, mainly it is the amount of the policy. Sure, typically it’s a lot more for wealthier people or high net worth individuals, but there’s also the insurance needs that you have, it might not just be income replacement when you’re a wealthier person. Because, again, if you’re a wealthier person, you probably have a lot more total assets or total net worth. So, therefore there might be additional needs for additional protection needed for, could be anything. Could be for mortgage on a commercial property. It could be maybe, a debt outstanding for starting a business or trying to increase, expand the business, or something like that. And there could also be an estate planning need for a wealthier person as opposed to someone who’s more a middle class person. But, generally speaking, it’s just there’s typically more needs to cover and additional needs, financial needs to replace. So that’s why you would typically see a larger policy on wealthier people, that would cost more.
[Anthony] That’s all I have. Thank you so much Jason, this is an invaluable, I’m sure people are gonna love this and want to hit you up for some more information.