Saturday, November 22, 2008

Life is short

About a month ago, a client of mine died at the age of 33. She was in perfect health. She had no prior history of any medical conditions. She is married and has 2 kids, age 4 and 11, and have a mortgage to pay. I met this family about 3 years ago. At the time I met her and her husband, she had $52,000 coverage for few years and her husband had no coverage. I'm not sure how that life insurance agent came up with $52,000. Anyway, I replaced her old life insurance policy of $52,000 and gave both of them $250,000 coverage, for a total coverage of $500,000.

If I did not meet this person, her husband would only get $52,000. How long will this $52,000 last? They still have a mortgage to pay, the kids are still very young, and have other bills to pay as well. This $52,000 would probably last at most one year. But with $250,000, this paid off the mortgage and there was still $20,000 left over. With no more mortgage payment, this family is not in a financial mess.

Why I'm writing all this? Its because there are many families out there who don't have life insurance. Those who do have life insurance are very likely not to have adequate coverage. I've been looking at the ACLI 2008 Fact Book and the number of policies being issued and in force has been on a steady decline. But the interesting fact is that the total coverage on individual life insurance policies has been increasing. Even more interesting is that the number of life insurance companies in United States have been declining as well since 1985 (where there were 2261 companies). By end of 2007, there are only 1009 companies left. By the end of 2008, I assume there will be less than 900 companies.

1 comment:

ZmAnN said...

Very Cool. Making a difference... Keep it up!