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Hector_LaMarque_-_Carryback_Proposal_-_02_Life_Insurance_Proposal_No_Current_Coverage_
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The speaker discusses the importance of life insurance for people who currently don't have any or are underinsured. They explain to the clients the need for protection and how it affects their family's financial situation. The speaker emphasizes the role of life insurance as income replacement insurance and explains the process of determining the appropriate coverage amount. They present different options for coverage and help the clients choose the option that best meets their family's needs. The speaker also discusses the qualification process and the importance of having a designated beneficiary and guardian for the children. Hello everybody. This next section we're going to be discussing how to propose life insurance for somebody that doesn't currently have any. And unfortunately today a significant portion of the people you're going to see don't have any. That's a big problem in the country today. Somewhere around 50% of the people that we're going to see don't have any protection today or they have a dramatically underinsured amount of protection. So I'm going to talk to the client here, the need for protection, why they should have it and why it makes sense for them. Because one of the things that you want to have really great persistency, the better understanding the client has for the need for the protection is going to help them feel compelled to continue to have it and to take care of their family. Everybody really loves their family and wants to take care of their family, but they still need a little bit of kind of instruction as to why it's important and how it affects their family. So that's what I'm going to start with and then I'm going to go into actually the input form on how to go ahead and get them involved. Hi guys. Earlier you were talking, you were saying that you guys didn't have any protection right now and what I want to do in putting together this program that we're going to be doing for you and a plan, one of the foundations of any financial plan is protecting what you have now, protecting the assets, protecting income and that sort of thing. You've got to have that as a foundation. So I just wanted to really make sure that it was clear that why do you need life insurance? Because a lot of times we'll talk to people and they go, I don't really think I need that right now. But the truth is if you have dependents and you do, you have two young children and then you have a mortgage, you have all these obligations that if either one of you were to, you both work, right? Yes. Okay, so you're both bringing cash into the family. If either one of you were to pass away, then that's going to put a financial hardship on your family because that money has got to come from somewhere. Because as well as being a husband and a father, you are a provider and same thing for you. You're a wife and a mother and a provider. Both of your incomes are probably critical to how you guys run your life, right? Yes. So what happens, currently you said that your income, you're making $100,000 a year, is that right? Yes. And your monthly income is? $60,000. $60,000. Okay, so those are very considerable incomes. All of a sudden, that works out to about $8,000 a month and that works out to about $5,000 a month. So let's imagine that all of a sudden there is no more Juan. So Juan goes away and so does that $8,000 a month goes away, right? It disappears because unless you have life insurance or savings to replace it, that money has got to come from somewhere, right? Because the mortgage still has to be paid, right? Yes. The kids' education still has to be covered, food, all of the different things, insurances, etc., etc. They keep coming in. Absolutely. So what that would represent, if you don't have life insurance coverage, it would represent an incredible hardship for Viviana and vice versa. I mean, if that goes away all of a sudden, you've got $5,000 less, all of a sudden the child care doesn't go away, all of the different things, it's going to be a really stressful situation. So what you do, you lose a loved one, if you don't have insurance, and then on top of that you compound the, which is just a terrible situation, you compound it with a financial hardship. Does that make any sense to you, that you would allow that to happen? Yeah, it makes sense. I understand. You want to protect against that, right? I mean, if it was feasible to do that, you want to do that, correct? Absolutely. Can you see how that's really important? Sure. Right? Because that's the main thing. So when I talk about life insurance, I really don't even, I think that's an inappropriate term. I think it should be called income replacement insurance. That makes sense. Because that's what it really does. It replaces, you know, that $8,000 a month, or it replaces that $5,000 a month. That's what the life insurance actually is intended to do. Kind of like when you have homeowner's insurance, right? If your house burned down, what do you have? Do you have replacement insurance? Don't you have that on your policy? So that when, if the house burns down, you can have it rebuilt like it was. You replace what was there initially. Does that make sense? Yes. And that's really the way that I would look at this. It's basically replacement insurance. And we want to have that until we don't need it anymore. So in other words, if we could get to the point where you accumulated, you know, say $800,000, right? Now you've got $800,000 at 10%, that puts off $8,000 a month, right? Or, you know, more or less, right? Right. Are you with me? Yes. Or $100,000. You're actually probably close to a million dollars. That's probably the more appropriate number. If you had a million dollars and you passed away, and you had a 10% return, that would replace the income. But right now, do you have anywhere close to a million dollars? No. No. Okay. So then what we've got to do, we've got two things. We put the insurance protection in place temporarily, right? For a term. That's why you call it term insurance. Until we can accumulate enough money to replace the need for the insurance. Okay. Okay. So we're going to have a plan for that. So part of this is to cover this in case something happens in the, you know, sometime future, in the near future. And then we have an aggressive investment program so that we can start saving money so that we can, at some point in your life, the sooner the better, save enough money where you're self-insured. You don't need it anymore. Does that make sense? Yes. Okay. So let's go ahead and let's take a look at how we're going to do that, right? Figure out what the appropriate amount is. That's the important thing now. We've got to figure out what's the right amount for you guys in your particular situation because everybody's different. Okay. So earlier I asked you guys what's most important in your life. You said your family, right? Yes. And so if you died prematurely, would you want your family's standard of living to be better, worse, or at least at a minimum, stay the same? Better, of course. Better. Okay. Definitely better. If you were to die prematurely, do you want your consumer debt paid off, like the credit cards and the car loans and all? Would you like that paid off? Yes. Okay, great. And we found out what that total was. It's $20,000. And you want your mortgage paid off? Would you like that to be paid off so you don't have that obligation? Yes. Okay. So that's another $200,000 right there. And then children's education, you've got two kids, right? Yes. Okay. So that would be $50,000. And then we've got the funeral expenses. Unfortunately, today that's at least $10,000 generally. Maybe. Okay. So that's $10,000. And then if your debt were paid off, how much monthly income do you think either one of you would need? Because now all the debt's paid off, so that obligations are lower. So you're not going to need as much life insurance income if we pay that off. So what do you think that would be about? I'd say $2,000. Yeah, at least $2,000. Okay. I think that's probably right. I'd probably pay this. Okay, great. Because one of you would still be working. So the income replacement would be $240,000. That's what it would be, right? $240,000. So you need that for about 10 years. So what I've done is I've come up with some scenarios for you, all right? One is stay the same, worse and better, right? Or at least the better, right? So what we found out is this is the kind of protection you need and these are the costs. So we've got option A, it's $250,000, $250,000, $10,000. But that's going to put you in okay position to not really cover the whole thing. $400,000, $400,000 and $10,000 on the kid, that's $131,000. And this is really the optimum thing if it fits into the budget right now. That's $500,000, $500,000 and $10,000. So which one of these rules do you feel best meets your family's needs right now? According to this, you said we needed $500,000 of coverage? Yeah, right. So option C. So option C. That's exactly what you really need. Great. All right. Fantastic. So is there anything you'd like to change about this option or like to adjust them? Do you feel totally comfortable with that? That's going to be not a problem for you guys, right? No. As long as it fits in our budget, then we're okay. Right. I'm sure we're not going to have any issue with that because we're going to be saving you money in different areas and stuff. That's not going to be an issue for you. I'm very sure of that. Okay. All right. So the next step is if we can get you to qualify for the coverage. Have you guys ever had an issue qualifying for insurance in the past? Have I ever been an issue for you guys? No. No. Great. What I'm going to do now is I'm going to ask you a few questions to see if you medically qualify for our program because, of course, you've got to qualify medically. Okay. If something were to happen to both of you, who would be the beneficiary? Who would be the one that would be taking care of the – if you both agreed to pass? Was there somebody that you have in place that you trust that would be a guardian? We have our cousins and our parents. Your cousins and your parents. Okay. Great. So what we're going to do is we're going to write their names down because I want to contact them. I'm not going to give them all the details of what you're doing, but I just want to let them know that they're going to be coming into a large sum of money to take care of your children if something were to happen to both of you so that you have that in place so you don't have to worry about that if that were to happen. Okay? Okay. All right. So let's go ahead and get started. All right, guys. That's the way you do it if they don't have any life insurance. Let me just go over a couple of things I want to make sure that you're very clear on. The main thing you have to do when somebody doesn't have insurance, you've got to really explain to them and get them to see clearly why they need it, what it's really for, and what it's going to do for them. If you notice what I did as I asked again what was their income, and I broke that down to what that represented on a monthly basis to their family, how much that was on both of them, and then I said, look, in addition to being a father or a mother and a husband and a wife, et cetera, you're a money machine to your family. You represent cash flow to the family. And if one of you were to be gone, that cash flow stops. Now, all the things that that cash flow pays for, they don't stop. The mortgage doesn't stop. The needing to eat doesn't stop. All the bills don't stop. Nothing stops. Just the income goes. So what that does is that represents on top of, you know, it's kind of like adding salt to a wound. So you lose a family member, right, a loved one, and now you've got a financial hardship on top of that. That just is not necessary. If you just take the step of properly insuring your family, then you notice I really explained how that's temporary. The need for insurance is a temporary thing. It's income replacement. Once we teach them and show them how to accumulate enough money outside of the policy, at some point they can put themselves in a position where they're self-insured. That's important to explain that to them, that this is a temporary need. And then one of the things you could do is you could actually tie that into recruiting them. If we could get you to the point where you're making a lot more money and we get you investing and maybe we could get you in the next five to ten years where you have a million dollars of cash, you're going to be self-insured. You won't need that anymore. And we can do that faster if you get in the business with us and we show you how to do this. You can tie it into recruiting as well, all right? And then make it real simple. Then you just go ahead and find out what they need, write it down, and then go ahead and ask for the check. Start filling out the paperwork and assume they're going to go ahead, just fill everything, ask all the medical questions, and ask for the check. That's all you've got to do. And if they balk at you and they say, you know, I'm not sure about this, say, look, we just talked about this earlier. Remember the reason why. And you go over that again and explain what are you going to do if the money's not coming in anymore and one of you dies? Well, sometimes people say, I don't know if I'm going to, you know, I don't think I'm going to die. Well, you know, I would say, do you know the date of your death? Well, nobody does. Of course you don't, right? You don't know when that's going to happen. It could happen tomorrow, it could happen ten years from now, it could happen two weeks from now. We have no idea. What you want to do is not to put any undue strain on your family when it's not necessary. We can take care of that for, you know, a very nominal amount of money. You do that already with your homeowners, you do that with your cars, right? I mean, do you care more about your cars or your home than you do about your family's, you know, financial future? Of course you don't know, but he does. That's a silly thing. You should definitely have that. And so those are the kinds of things you might be able to, you know, have to do when you're dealing with something like that. If somebody simply doesn't get the reasoning, they don't feel compelled to take care of their family's future, if they don't see that as a really important need, you probably don't want to write that policy up because it's going to lapse on you. That's not our kind of client. Our kind of client is the kind of client that understands that their financial future, their family's financial future is critical and it's very important. If they don't feel strongly about that, then they really aren't our client. We don't want to do business with those people because they're really, they're not coachable, they're going to be a problem, all right? So don't worry. Whenever you run across insurance, if you follow those steps, you know, eight, nine times out of ten, you're not going to have any problem completing a transaction like that.
