Do Younger People Need Life Insurance? 2023

If you are a millennial or GenX'er you may wonder what kind of life insurance you should purchase. There are a few different types of coverage available. Term, universal, indexed universal and whole life. Term policies could be considered "temporary" as they only cover you during a specific amount of time, like 10, 20 or 30 years. There are even some companies out there offering 40 and 45-year terms for younger people. Term policies are much less expensive because they only offer a death benefit and there are no other features like loans or cash value. (Some term policies now offer "living benefits" which can help you if chronic or critical illnesses arise.)

Although term life insurance does not accrue cash value, it's affordable for working families during their working years. For instance, a healthy non-smoker in their mid-20's could expect to pay less than $25 each month for $500,000. (Rates are subject to underwriting and are not guaranteed)

On the other hand there are permanent policies, like universal life (UL), indexed universal life (IUL) and whole life (WL).  These policies are more expensive but they also cover for the rest of your life as long as you continue to pay the premiums.

Permanent policies also have various ways to build cash value internally. For example, the UL uses interest rates, but since rates are at historic lows (for now), it's not a great option. We have many younger clients who use IUL's in lieu of investing and are very happy. 

For those who are single with no dependents but own a home, a policy will allow you to keep that home in the family. Having parents or nieces or nephews who could use that home if you should pass can be beneficial and life insurance can pay off the balance of the mortgage. 

So how can you get a policy? You can usually get a policy through work if they offer one, however we always recommend you have additional coverage outside of work, in case you leave your job. Also, that coverage through work is rarely enough to cover all of your debt and replace lost income. If you have a family, you will definitely need much more.

A great way is to use a quoting tool (we have one on our website) which lets you enter your information and will give you several choices of coverages. If you like what you see, you can even begin the application.

A simple method to find out how much life insurance you need is to add up your expenses and liabilities, like the mortgage, car payments and other debts. That should be a minimum for your needs. You may also want to consider lost income if you are the sole breadwinner of the home, and future education costs if you have children. On our website, our life insurance quoting tool offers a calculator to help determine your needs.

You may or may not be required to have an exam. It really depends on several factors, like the carrier and the amount you are applying for. Many companies have decreased their usage of exams during the pandemic, but they still reserve the right to have your medical records transmitted to them. And if there is no exam, you could have to answer a lot of medical questions during the application process. The secret here is to be as truthful and honest as possible, especially when it comes to questions about smoking (tobacco or cannabis) and your family's medical history.

If you have questions about what type of insurance you need or how to apply, let us know. In the meantime, please stay healthy!

Want to know how much disability insurance you need? Drop us a note and we'll send you our free PDF!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog! 

Let's Keep Your Private Information Private

Last week, while on a work trip in Virginia, I saw a commercial on TV for life insurance. You more than likely have seen these ads as well. 

"Bob, 45, just got $2 million life insurance policy for $10 a month! Let us help you!" the voice over guy screams. A blur of fine print flashes across the screen. I'm not sure if I read it all correctly, but it implied that Bob got super ultra preferred rates because he runs marathons daily and is 4% body fat. In essence, Bob will never die.

I'm exaggerating a bit, but you get the point. The ad shows the best case scenario, but we all know that if we could have read the rest of that blur of words, it would also mention that all rates are subject to underwriting and your premium could differ. 

These ads are for insurance agencies which represent multiple companies. When someone goes online and looks for a quote, the agency gathers your information. But what does it do with that information, like your date of birth and email address? That information is sold to an insurance agent who has purchased that lead. 

Here is where things get weird. Many insurance agents will purchase leads. They think it will be worth the cost to avoid having to prospect for clients or advertise. Personally, I have never had much luck with leads of any kind. 

I used to work with a life agent, who we will call Pete. Pete paid a service approximately $300 for a year's worth of leads. Part of this deal was that Pete could choose up to three zip codes, and if the leads were in those zip codes, the agency would email him the prospects information. The problem was that there could several agents signed up for the same zip code, and they would each get an email.

According to Pete, he needed to wake up early enough to get the email and be the first agent to call the prospect. If he was too late, even by a few minutes, the poor prospect, who didn't understand what was going on, would yell at him. "I was looking at life insurance in the middle of night because I couldn't sleep. I didn't realize I was going to get five agents calling me!"

Pete also told me that most of these leads were from people who were "kicking the tires" to see how much insurance would cost and had no intention of actually buying a policy. And if they did, the premiums would be so low that his commissions would never make up for the $300 he paid for this "service". 

We do things a bit differently. If you go to our website, we also have all of the big name insurance companies, and our site compares rates as well. And, yes, we do gather your information as well. But that is where any similarities end. 

If someone likes a quote on our site, they can start an application. We don't sell data to agents. We will contact prospects to let them know we are available if they have questions or if the insurance carrier has any underwriting questions. And if someone would like to speak with an agent, they can always contact us.

Everyone is trying to stay within a budget, even when it comes to making sure that their family can stay in their own home if tragedy should strike. But one should make sure they are purchasing the amount they need as well. Our quoting engine has a calculator to help find out how much coverage is needed, which is important. Too often people don't apply for enough coverage. 

Do you know someone who needs a little more life insurance? Pass along our website and help them protect their family's financial future.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Making Insurance Accessible To All

As we all know, the internet has changed the way people do business. More importantly, it's also changed the way businesses do business. 

Not that long ago if you needed someone for a specific service, you "let your fingers doing the walking in the Yellow Pages". Now I make that reference to my college age daughter and she doesn't know what I'm talking about. Everything from entertainment to financial services has gone digital, and for those who aren't offering some sort of web-based platform, they may as well be throwing a chunk of their marketing dollars into the garbage. 

This struggle is real in the insurance industry as well. The old school method of getting a referral, meeting with them in their home or office over several appointments, and hoping to get an application completed (along with more referrals) has lost some of it's appeal. For younger, more internet savvy consumers, doing their own research and making online purchases is the norm. 

At the same time, these younger people are less interested in selling insurance, mostly because of the old school methods that still are being taught in training offices throughout the country. According to a 2017 article by the World Economic Forum, the average age of a life insurance agent was 59. Considering that agents tend to sell to those around their own age, millennials are, for argument's sake, not being properly attended to when it comes to their own life insurance needs.

In 2007 I went to work for a large life insurance company. We were the "best of the best" according to the management, so you would think that we could attract agents who would succeed and thrive. Our managers boasted that we were ahead of our competitors in agent persistency, because we had a rate after three years of 17%, opposed to 10-15% by our peers. This meant that if they hired 100 agents today, a whopping 17, on average, would be around after three years. And they were actually proud of this.

For the consumers, though, this is bad news as well. How many times have you purchased life, disability or other kind of insurance, only to find out that your agent is no longer with the company?  

As a society, we have become numb and/or jaded when it comes to having bad service. This is why a growing number of people are cutting their ties to agents and buying financial services from the internet. The television is full of ads letting us know to get car insurance, life insurance and investments straight from our computers. Convenient and quick. 

But what about the personal service? What if we have questions or concerns or need to file a claim? Are we destined to having to call an 800 number each time we need something. Even worse, what if we have to speak to someone who is out of the country? Is that good customer service?

At Surf Financial Brokers, we have tried to combine the best of both worlds. Our quoting tools for life insurance, dental, vision and hearing plan, cancer insurance, hospital indemnity insurance and accident plans make it easy and quick for people to find a policy within their budget. And if they like what they see they can start an application.

At the same time, if they want a more personal touch they can book a short phone appointment with one of our agents who can help with our products, including others like Long Term Care and disability insurance. We want to help anyone who recognizes they need insurance to be able to get it in the way they want. 

Let us help you find the right product for your needs.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!