When I met Mike and Shelly, they were living in a small apartment with two young children. Their love for each other and commitment to family values was readily apparent. She was a stay-at-home mom, and he was on the beginning rung of a career he loved.
The most immediate need was to move from that apartment into a bigger house for their growing family. They’d be buying it within the next few months.
We reviewed their existing life insurance program together. What they had was sound, but not nearly enough to protect their needs and dreams. Using that as a foundation, we designed a portfolio that would properly protect their future. If either of them were to pass unexpectedly, she would be able to stay in the house and raise their children. And he would still be able to be there for his children without sacrificing his career opportunities.
Over the next few years, as their family grew we’d review the program and make sure it kept up with the increased needs. It became a running joke between the three of us; he’d say he didn’t want to increase his insurance anymore. I’d tell him if he’d quit making more money and having more children we could leave it as is…
The review after their fifth baby’s arrival was different. He wasn’t as open as he’d always been. The conversation went like this
“You seem a little grumpy today. What’s going on?”
“I want to buy a boat.”
“Ok, so…?”
“So you’re going to tell me I need to buy another $300,000 of insurance, and I’m not going to be able to buy the boat.”
“Of course you’re going to be able to buy the boat! You’re just not going to be able to buy it right now.
We increased the coverage he needed and deferred the boat for down the road. All was fine.
Until it wasn’t.
Mike—still a young man—never got that boat. He left for work one morning and didn’t come back. He died on a sidewalk, surrounded by paramedics and police officers. It was devastating to all of us.
Now, years later, the rest of the story looks like this:
Shelly had the money and resources to stay in the house and care for her children. The children grew into adults and that last $300,000, some of it went towards college expenses for Mike’s grandchildren.
On behalf of all future beneficiaries, don’t take any insurance program for granted. They should all be reviewed periodically. And if you’re a financial or law professional with a client who hasn’t reviewed their policy, guide them towards seeking an insurance review.
Life takes turns, and sure, Mike wasn’t able to get that boat, but he was able to provide for his family.
If you or a client of yours have had any of these major changes occur in your life since establishing your policy, it’s time for a review:
1. You got married or divorced
2. You’ve had a child or have become a guardian
3. You’ve received an inheritance
4. You’re starting or selling a business
5. You’re funding college or will in the future
6. You support an elderly or special needs family member
7. Your salary has increased or decreased
8. Your child or spouse has passed away
9. You’re thinking about retirement, or you have retired
Even if you haven’t experienced any of these changes in your life, there are plenty of events in life that can impact your insurance policy. That’s why it’s essential to regularly look over your policy about every five years to ensure everything is up to par.
