Case Study: Have You Got Your Lifeboat In Place?

Case Study: Have You Got Your Lifeboat In Place?

Case Study: Have You Got Your Lifeboat In Place?

When I joined the Life Insurance industry back in 1999, I was a young, ambitious, and impressionable advisor.  

I got coached by an old-school advisor who taught me to use some pretty dramatic analogies and metaphors when selling Life Insurance. 

Some of these included positioning Life Insurance as a lifeboat or the spare wheel that saved the day when you needed it most. Another rather elaborate analogy involved something around cork, the light, floating stuff that also corks wine bottles…(but more on that later)

All in all, I failed miserably at incorporating these analogies into my sales conversations. 

Not only did I feel silly using them (which probably showed when I did use them), I think clients don’t like being scared into buying anything, not even Life Insurance. 

But I must admit, corny as those analogies were, over the two decades selling Life Insurance, I’ve made my peace with them. I’ve come to see that there is truth in those metaphors and analogies. 

In fact, something happened in 2021 that caused one of these analogies to loom into focus for me: 

My client and a dear friend suddenly, unexpectedly, passed away. 

He was 53 years old and was survived by his wife, a son in university, and a daughter in middle school. 

He had been the sole breadwinner in the family and so, his sudden passing brought not only shock and grief but also a flood of questions and concerns with regards to the family’s financial situation. 

Here’s what my client’s financial situation was at the time of his untimely death: 

He had a high-flying job with a Fortune 500 company and had a great pay package with benefits. He was well-respected, rose through the ranks fast but was also, as with most executives like him, highly stressed out. 

He had a mortgage on the home they lived in, a couple of large-value Life Insurance policies in place, and a healthy, diverse investment portfolio including holdings with equities, stocks, and shares. 

But he had always handled the family’s financial affairs and investments himself and so, when he suddenly passed away, his next of kin had little idea about any of these investments and had even lesser of an idea of how to manage these assets now that he was gone.

The One Payout That Paid Out 

Today, at the time of writing this article and five months after his passing, only one asset has helped the family to live their lives undisrupted: My client’s Life Insurance policy. 

You see, the moment that the family’s sole breadwinner passed away, it ended all liquidity for the family. My client’s accounts were frozen immediately upon death, and the only access to a cash reserve the family had was the cash that was in the wife’s bank accounts. 

It was enough to get them through 4-5 months of expenses, but not much else. 

As of today, nearly a year since his passing, the rest of my client’s assets still haven’t been transferred, liquidated, or paid out to the family. 

The property hasn’t been transferred to his wife yet. 

My client’s end-of-service benefits haven’t been paid out to the family yet. 

His group insurance policy with his ex-employer hasn’t been paid out yet. 

The cars still haven’t been transferred over to his wife’s name. 

The other investments and assets in his investment portfolio haven’t been transferred to his wife either – she needs legal and financial advisors to help her figure out how to obtain and manage those assets moving forward. 

All of these procedures are complex legal and financial procedures, some of which require authorities or entities from other countries to get involved – it could take months even years before it’s all settled. 

But my client’s Life Insurance policy saved the day (also corny I know).  

Four days after we filed a death claim, the family received the sizeable payout that the Life Insurance policy had promised. 

Not only did that sum help the family continue to live comfortably, undisrupted until now and until the other assets are transferred to them, but it also helped cover crucial legal and financial fees to make it all happen. 

My one question to you: 

Corny as it may sound as part of a sales pitch, the unfolding of this case made me see that Life Insurance was really the only lifeboat that helped this family sail through what was in so many ways a difficult time. 

So, I’ve got one question for you: Have you got your lifeboat in place? 

P.S. Remember to review your Life Insurance policies regularly to make sure you’ve got the right products, you’re paying the right premiums, your beneficiaries are updated, and you’ve got the most updated structures in place.

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