We treat the life insurance process differently than most independent insurance agencies and believe it should be simple!
We believe everyone should understand one very important concept before they ever choose to buy life insurance from anyone, including us.
Most insurance agents will simply tell you that people buy life insurance to ensure their loved ones aren’t left with debt, or so you can pay off your outstanding mortgage, or cover a loved ones final expenses upon passing.
While those are all valid reasons, we strongly believe there is a much more responsible way to educate you on why and how life insurance may possibly play a role in your life.
It’s EXTREMELY simple.
You need to understand the concept of your “Earnings Power”. Everyone has it, and it’s as unique as your finger print.
Once you understand what your earnings power is, as well as what threatens it, it’s much easier making a decision to buy life insurance, choose the right coverage options, and identify your true insurance needs.
And, it only takes about 3 minutes or less of your time.
#1: Understand your earnings power and why it matters when considering buying life insurance
Your earnings power is made up of two very simple elements.
- You at work – This is the the income you earn at work every day.
- Your money at work – This is the income you earn through your various investments / retirement plans.
If you add these two together, it’s the basis of your earnings power, which is is the foundation of the lifestyle you and your family are accustomed to living today.
Whether you live a life of luxury, poverty, necessity or comfort, your earnings power maintains your family’s lifestyle and only you can honestly answer what type of lifestyle your earnings power provides you today.
Do you currently life a lifestyle of luxury, poverty, necessity, or comfort?
Now, take a moment and think about this scenario, and give yourself a very honest answer.
What if we took “You at Work” out of the equation?
Would “your money at work” sustain your current lifestyle (life of luxury, poverty, comfort, or necessity) your family is accustomed to living?
Most people we work with here in St. Louis answer NO to that question. It’s as simple as that.
#2: Understanding the Three scenarios that threaten your earnings power that can be solved by life insurance companies.
- You could die too soon…(life insurance is often the solution)
- You could live too long…(annuities are often the solution)
- You could get diagnosed with a critical illness or become disabled…(long term care / disability are often the solution)
Bring it all together and you’ll see that 1+2=3
#3: Life insurance is not a one size fits all
This is why in the beginning of this article we said, “Do Not Buy Life Insurance Until You Understand This…”
Understanding the 3 scenarios above and how they impact your earnings power today should be the driving reason you even consider life insurance as a possible solution.
You may find through this quick exercise that you don’t actually need life insurance at all and a strong disability or long term care plan is the more fiscally responsible choice to make, and the missing link you’ve been needing to properly protect your earnings power.
Our job as insurance agents is to equip you with the information that allows you to make an educated decision on the insurance products that make the most sense for your situation. We can’t do that unless we properly help you understand what you’re actually protecting.
Conclusion: Should you buy life insurance?
We would love to sell you a policy, but only if it makes sense for you. 🙂
That’s a question for you to answer after thinking through your earnings power and what would happen if it were to be compromised.
Most people we meet with cannot sustain their current lifestyle if “you at work” is taken out of the equation. If that accurately describes you, we would strongly encourage you to schedule a time to talk to us about life insurance or request a quote. We can either meet over a phone call or at our St. Louis office.
Frequently Asked Questions
Below are some of the questions we get about the specifics of life insurance. Please take a moment to review.
Types of Life Insurance Policies
- Term Life insurance – Costs less, doesn’t build unique value, and has a defined expiration date which are most commonly 10 years, 20 years, or 30 years.
- Whole life insurance – Costs more than term, build cash value, and never expires as long as you pay your premiums.
- Indexed Universal life insurance – Costs similar to whole life insurance, builds unique value, and has flexible premium payments. Learn how to open an IUL account.
All three options can be great assuming they fit your specific scenario and most life insurance providers offer all three types of coverage options.
Read more about how to choose life insurance.
Where to buy life insurance.
There are three common places to buy life insurance
- Insurance agency
- Directly from a life insurance company.
- Through the mail
If you buy from an agency, you’re more likely to review multiple options with strong, financially stable companies vs. just one when working with a single company or a mail order policy.
It’s important to remember that if you have two options for life insurance from companies of equal value (financial strength, claims paying ability, and customer service), then it doesn’t make sense to over pay with one company vs. another. That scenario is the perfect time to use price justify your purchase.
Otherwise, you always want to go with the financially strongest company that you can afford.
Are you covered immediately for life insurance?
Most of the time yes, but it depends on the type of life insurance coverage you are medically approved for. Some insurance plans have various coverage options based on your age and health condition which can impact the amount of benefit your beneficiaries will receive in the first 3 years of the policy.
This information lives in the disclosures of each policy which your agent is responsible for discussing with you.
Which is the best insurance company for life insurance?
There are so many good insurance carriers. We believe the best is defined by a companies financial strength, claims paying ability, and customer service. If during our review we find that all of those elements exist, then we make the decision based on price to ensure you’re never overpaying for an otherwise equivalent, high quality plan.
What is the cheapest form of life insurance?
Term life insurance is absolutely the cheapest and sometimes it’s the best solution.
How much does life insurance cost?
Cost depends on a number of factors, but statistics show that most people over estimate the cost of life insurance by nearly 50% while at the same time being on average $250,000 under insured.
If you don’t have life insurance, we always suggest starting out with around 10-15 times your annual income. For example, if you are earning 60k per year, you should get between $600 and $900k of life insurance and it shouldn’t cost you more than roughly 2% of your annual income. That is an excellent place to start.
St. Louis Insurance Agency Focused on Life Insurance
Life insurance is what we are most passionate about and we have been serving the citizens of St. Louis, Missouri for more than 14 years.
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