Life Insurance – What The Experts Own

life insurance the experts own
Life Insurance - What The Experts Own

Here at the LSM Insurance, we've been devoted to providing our clients with the best possible services in the industry for over 50 years. That means our daily priority is thinking about what kind of life insurance product will best meet the needs of each one of them.

However, we don't want to settle with merely selling product - we're always innovating and seeing beyond. This has led us to wonder, what kind of products are actually used by the leaders in the worlds of business, personal finance and insurance.

So, "What kind of life insurance do the experts own?" We have asked them these five questions to find out:

  1. What Type of Life Insurance do you own?
  2. What factors did you consider when determining the coverage amount?
  3. Do you believe in Life Insurance for Children?
  4. What is The Biggest Life Insurance mistake people make?
  5. Outside of Life Insurance what other types of individual insurance are often over looked?

Read what the experts say!

 
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32 Comments

  1. Terrence 01/23/2014 at 10:17 am

    Personally I think Children’s Life Insurance is a waste. Why insure someone who is not making an income. That would not impact the family at least in a financial sense. These policies are a huge money maker for the insurance comapnies.

  2. LSM Insurance 01/23/2014 at 10:30 am

    Hi Terrence. Thanks for the note. There are definitely some key benefits to insuring a child you are overlooking. I think Paul Lalonde makes some really good points on children’s life insurance “….I didn’t buy the insurance on them, I bought it for them as a gift in their future. Some parents say, they don’t want to make money on their kids if they died. I personally think that is a foolish thought. To me, the coverage is to help the parents pay for final expenses, but more importantly, to afford them the time to be with their family’s during the grieving process. If something happened to one of my kids, I know I would not go to work for some time and I would focus on getting that sense of security back to the family. If anything is extra, I would use it for seed money to start a foundation in my child’s name. The idea is that I will never see the money, but I know I would need it if, God forbid, my nightmares came true link to lsminsurance.ca

  3. LSM Insurance 01/23/2014 at 10:35 am

    Leony deGraaf also stresses this point .”…it secures their premium and their insurability while they are young and healthy. In the event of a tragic loss, mom and dad can also take a year off to grieve.” link to lsminsurance.ca

  4. Terrence 01/23/2014 at 7:02 pm

    That’s fine but the bottom line is still replacing one’s income

  5. LSM Insurance 01/23/2014 at 7:05 pm

    Hi Terrence, I think you are missing the point. No one is arguing that replacing the primary breadwinners income is top priority. But you are ignoring the many benefits of insuring a child which Paul, Leony and some of the experts highlight.

    Having said that some experts share your view point.

  6. William Shung 01/24/2014 at 12:24 pm

    Regarding Disability Insurance. Not many advisors like to sell disability insurance.

    I think the reason – it’s too time consuming and complex. There are many product nuances that must be properly explained.

  7. Mike Z 01/26/2014 at 5:23 pm

    I’d think the experts would own a combination of permanent whole life and term life to cover both the present and future.

  8. On insuring children, there are a few ways to look at it.
    Insuring their future.
    Locked in rates.
    A paid up policy a buddy of mine took out on his daughter, at 16 days, is $45 a month, paid up at 10 and by the time she is 18 will have grown from $50k to $60k+ face AND have cash value (both of which can continue to grow).
    That is cash she can use as a down payment on a house or what ever she wants.
    She still has permanent life insurance that endows when she turns 100.
    She will not be a burden on her family.

    For protecting the wage earner, if a child dies, do you think the wage earner can go to work and not be affected by it? Even with the Affordable Care Act, do you think the average person out there in the US has $6350 laying about for the average Max Out Of Pocket (MOOP) for a silver plan?
    Metallic health plans do not give you money to bury the deceased (adult or child).
    It also does not give money to replace your income as you mourn the loss of a family member.
    I know 1 family who had life insurance on the child that died. The husband (wage earner) was able to take off work 6 months, use life insurance to replace his lost wages and heal with his family. 5 years later they were not divorced, the other kids were not strung out on substance abuse.
    Most of my stories are not that happy of an ending.
    Life insurance is for the living to be able to transition through the change.

  9. And because I believe in being fair, the other theory I hear on why you insure kids is to profit if they die.
    But $25000 children’s policy is not much after funeral expenses, outstanding medical bills and missing work.

  10. LSM Insurance 01/28/2014 at 9:22 am

    Thanks David. You make some very good points.

  11. Philip 01/28/2014 at 9:28 am

    Not trying to be simplistic – but I hope they own Life Insurance – and other forms of Insurance – that meet their own and family’s specific needs for now and the future taking into account their wherewithal. With insurance – as with most things – one shoe does not not all!

  12. Kalth 01/29/2014 at 1:57 pm

    Interested insights by but Suze Orman does not share Paul, Jason ad Leony’s thoughts on Children’s Life Insurance link to biz.yahoo.com

  13. LSM Insurance 01/29/2014 at 2:01 pm

    Hi Kalth, Thanks for the note but I respectfully disagree with Sue. It depends on the families financial goals, objectives and budget.

  14. Bill Ford 01/30/2014 at 9:41 am

    Term Insurance. Like democracy it is a lousy form of insurance but the others are so much worst. A newly wed husband should first buy a term policy on his spouse. Then he should buy one on him. I like the 5 year Rand C and if waiver is not excessive this may make sense. Shop the market then compare with ART and other level term periods. Your need for insurance diminishes as you age unless you divorce and find yourself reinventing the family then do what I have written above then. If you become uninsurable you retain the option to convert. Frankly what would you be converting to but a rotten whole life policy at absurd premium cost. The only other reason to have life insurance is if you become a member of the 1% you may want to include it in estate planning. I have found I can get life insurance on most anyone at any age so this really becomes unimportant because if you are that successful the premium cost will no longer matter. If you are the other 99% this need does not exist.

    Par plans. Life insurance is an investment right? Not hardly.
    Universal Life? Not much better for the same reason.

    One other peeve. I am supposed to have a big death benefit for me for the spouse right? Well since 50% of marriages end in divorce not death that seems pretty stupid to me unless you married a woman who looks upon you as a kind of anytime teller so she will want the teller for withdrawals after you kick the bucket. Since we now have gender equity guys let’s have her as the anytime teller and use a life policy on her the same way.

    Variabloe Universal Life- Probably the most diffciult product ever devised and well beyond any competent agent’s ability to explain much less have the buyer use properly. And boy do they have hidden costs.

    So what to do in the real world for a newlywed that plans on having children.

    1. Pay off the cars and quit buying fashion statements. Ignore the loan amount and recognize a car is four wheels and a losing money pit. Pay it off.

    2House or condo. A lousy liquid investment but a requirement of life next to death and a taxes. Our skewed income redistribution system we call tax provides “rewards” for having the debt of the mortgage. that the cost of the house already includes this benefit is lost on most people but you still should probably get in one.

    3. Since more people become disabled than die would the life hounds barked this up but they normally don’t because it is a tough sale and the commission is much less. Still this is a need for the newly weds.

    4. Put money aside as in save. Begin with any retirement plan an employer provides. Begin by maxing what they match. then work to increase it to the max allowed ten dollars per pay period at a time.

    5. Then move into the other options if budget permits and if not make at least some of it fit. Roth IRA and other items for example,e

    6. College education no child left behind means your children pay much more.

    7. If available use a HRA , HSA or any similar vehicle you can to set funds aside for health claims.

    8. Set some money aside for gold and have access to it. Use any other money to lose on the stock market.

    prepare for the real probability government will one day steal your next egg. Roosevelt did and believe me you can expect same today. So having some money outside the bank may not be a bad idea.

    Now a young newly wed can not begin to do all these at first but they need a plan and they need to work it. using funds for life insurance is this time period is simply a complete waste. You might buy some cheap term for encasements but nothing more.

    this list is far from complete.

  15. David V 01/30/2014 at 9:49 am

    Bill, I have heard your arguments before and I acknowledge them but I need some more qualification. (my background is based on families in the US, I know Chantal is based out of Canada)

    I work with many people in the paycheck to paycheck or just barely able to survive area (more to lower income, not excessive debt spending, I ask “what debts do you have”)

    Converting insurance is not an option for them. I normally do a small permanent policy that is paid up in 10-20 years and term. Then layer more on as needed (kids, purchase home, etc.) Unless they have a family history of health problems,

    I personally still have the $3000 WL my grandma bought me when I was 5 and I have other paid up policies for about $50,000 so my final expense will not be a burden on my family whether I die tomorrow or at 102.

    If you are saying buy term when you get married and then get rid of it later, that is nice in theory but not realistic for the surviving spouse to have money to live on. I see normally see one spouse being the main wage earner and the other making fun money.

    “Your need for insurance diminishes as you age unless you divorce and find yourself reinventing the family then do what I have written above the”
    My first thought is divorces I see are normally when people are in their late 30s early 40s. People’s health generally declines over time, does not get better. Which is why I am again a fan of a UL with no cash accumulation (premium stays low but does not run out after 20-30 years, try 119 years old) I see people having kids until they are into their 40s (maybe it is the area where I service)

    “then compare with ART and other level term periods”
    I have both ART and level term (I believe in having the products I sell so I can better explain how they work and the purpose to my clients. I am not going to sell aluminum siding when I have a log cabin)
    In my experience ART premium is generally lower for the first 7-9 years and then the total out of pocket it equal around year 12-13.

    On “supposed to have a big death benefit for me for the spouse right?” comment…have you never insured a stay at home spouse? I always look at that! If something happens to them, the wage earner needs money to replace their income while mourning and then pay for a sitter for the kids and someone to clean house, etc. All the duties the stay at home spouse.

    “Variabloe Universal Life- Probably the most diffciult product ever devised and well beyond any competent agent’s ability to explain much less have the buyer use properly. And boy do they have hidden costs.”
    Variable I agree, fixed or indexed, I disagree.
    Or maybe you need some better training on how to understand and present it.
    To me this is similar to talking to someone about funding a buy/sell agreement. Nice concept but very easy to mess up if your ego gets in the way or you do not use your back office support and an attorney and an accountant.

    Dave Ramsey is very popular down here (buy term and invest the difference). Also “if you do not have the cash, do not buy it”. Good concepts I agree with. VERY FEW people actually do. Hence, life insurance.

    Also life insurance has been around for centuries! They used to have debtor’s prison (being in debt is not a new concept). We are here to help people, not scold them on how they should live from some view point looking down on them and telling them what they did wrong. We (I at least) try to show them how to get to a better position and how to protect their family if something happens before they get there or if they do not get there.

    As someone recently told me, we cannot help everyone.

    You are in Atlanta, and yet you do not mention the fact people are living much longer and having to spend down what would have been their estate. Another reason your spouse may need cash to replace money during spent.

    I guess my question is why are you in this industry?

  16. Mike Z 01/30/2014 at 9:50 am

    Bill, Wow…why so cynical? And what DO you suggest besides stating the obvious of living within your means, saving and budgeting -which IS all great advice! -? What drives your agency?

  17. Mike Z 02/01/2014 at 11:58 am

    Bill, there’s not a cookie-cutter answer for every client, so to say that “life insurance is a bad deal for the client” as a blanket statement for all just simply isn’t true.

    I have had many beneficiaries bear-hug me as they sobbed and thanked me, stating that if it wasn’t for the policy(ies) I sold the deceased, they couldn’t have buried their loved one; couldn’t have stayed in their home; would’ve had to get a job because their Social Security benefits were cut in half; couldn’t have paid off the debt the deceased left them; couldn’t have afforded to provide their children/grandchildren a college education (so they could break out of the chains of being a “have-not”…and I could go on and on.

    I agree with you on the variable products – unless the selling agent is an experienced RIA who monitors his clients’ accounts and makes changes in allocations as necessary.

    Term products have to be used in the right situations. I don’t sell much of it, except as riders on children or for mortgage protection purposes. Definitely not for seniors, unless it comes with a return of premium should the insured outlive the term (which 98% do).

    But the bottom line is that when purchased at a young(er) age, Whole Life IS affordable and can be worked into anyone’s budget – even the “have-nots.”

    I’m sorry that your viewpoint differs from most. I guess we’ll just have to agree to disagree.

  18. Theon 02/03/2014 at 10:35 am

    Does Canada Life still offer Term 100 insurance. How much for a 48 year old

  19. LSM Insurance 02/03/2014 at 11:18 am

    Thanks Theon. Canada Life does not offer a Term 100 policy anymore. But several in Canada still do – we will be in touch by email soon.

  20. Ami Maishlish 02/06/2014 at 2:35 pm

    Very well written with noteworthy points made. While I would still not make life insurance on children a priority above adequate life, CI, and DI coverage on the parents, Jason makes a very valid point in raising the issue of emotional trauma impact on the parents in the event of a child’s death. (depending on the policy wording and circumstances), DI may not cover the financial impact of such emotional trauma. Therefore, Jason’s point relating to this risk is well worth consideration. Thank you, Jason.

  21. Thanks for including me in this list, interesting points made by other folks.

  22. LSM Insurance 02/08/2014 at 12:56 pm

    You’re welcome Alan. We really appreciate your contributions.

  23. Tim Landry 02/14/2014 at 11:34 am

    It’s funny when I read the comments about disability insurance being complicated. Sorry – it’s just DIFFERENT. I remember attending a Canada Life investment presentation and two of the Canada Life reps were also VERY involved in the DI side. I went up to them after the meeting and said “People say DI is complicated! They should rethink their position after hearing all the complications in your investment products!” They laughed – and agreed. It’s funny – I am willing to bet everyone reading this finds driving a car (or other motor vehicle) very simple. For someone like me – 68 years old and have NEVER driven a car – driving a car is very complicated. If you want to learn DI – give me a couple of hours and I can teach you all you need to know. Can you teach me to drive in two hours? I STRONGLY push DI, CI and LTC! Every time I hear the two sure things in life (death and taxes) truism – I want to SCREAM! Everyone reading this will be disabled before they die. We do not know the timing or the duration – but it WILL HAPPEN. I have been disabled since 1963 – a work accident cost me most of my feeling in my right hand. I KNOW I will be disabled again. Will I be lucky like my grandmother – who had just moved into a senior’s residence – went out for supper with one of her sons – had a great meal – came home – slept well – got up the next morning – went out in the garden – keeled over and died? Or will I be someone who has Alzheimers for 7-10 years? Who knows! Obama and Harper could repeal taxes TOMORROW (We know they WON’T – but they COULD!) It would literally take an act of God to repeal disabilities. Other than the staff – who expected to be in the emergency room of your local hospital today? Please tell my brother that the idiot who was driving the other car – and who passed a car when solid lines said NO – did not hit my brother’s car head on at a combined speed of 120 mph (200 kph). My brother did NOT need 7 hip rebuilds! My brother did NOT get Hepatitis C from the blood transfusions which saved his life.

    Kid’s insurance? It is not if they die. It is to protect their insurability. How many KIDS are diagnosed with Type 1 Diabetes today? Get CI for your kids. How often have I seen mothers (and fathers) crying because their child has a serious illness? I wish CI had existed 25 years ago – before my son was diagnosed as bipolar. And the most important insurance product out there for boomers is Long Term Care Insurance.

  24. LSM Insurance 02/14/2014 at 1:09 pm

    Great points Tim. You experience and knowledge shine through.

  25. Frank K 02/15/2014 at 3:06 pm

    I think Whole Life Insurance is giving a bad rap by many of the so-called experts. Compare the returns with other interest based investments and it stacks up pretty favourably. Curious to hear other thoughts

  26. LSM Insurance 02/15/2014 at 3:19 pm

    Thanks Frank. You’re right. The dividend rates on Whole Life plans are still strong given today’s low interest rate environment. But keep in mind many insurance carriers have interest rate long term bonds coming due in the next few years which are going to have to be reinvested at much lower rates. This will likely lower current dividend scales.

  27. Rajendra shah 03/05/2014 at 2:01 pm

    I think child ins. Considering basic riders is advisable
    1- earning member will hv to propose with rider of parents coverage so that no liabilities remains for premium payment & start receiving regular income for regular exp.+ receiving lumsum big amount after maturity to fulfill parents dream
    2- lowest premium considering age factor
    3- parents should be covered first sufficiently
    Many more plus points are there

  28. LSM Insurance 03/05/2014 at 6:43 pm

    Thanks Rajendra. Good points. What are you views on stand alone children’s life insurance policies.

  29. Ronald K 07/11/2014 at 2:48 pm

    I think a lot of the experts are underestimated the impact on ones income after the loss of a child. If you or anyone you know has lost a child its not like your back at it within a week. It can take months or years until you are the same person.

  30. LSM Insurance 07/11/2014 at 3:40 pm

    Thanks Ronald you make a great point and a lot of experts – Paul and Jason Lalonde and Jackelyn Ford also make this point.

  31. Life Insurance on a child is a touching subject . After having two boys die at an early age I was glad their was Life Insurance in place to cover the funeral cost and the bills that had piled up with the cost of the medical expenses largely due to transportation cost from NFLD to Toronto sick childreds hospital , not to mention the lost of income from time of work . Also one has to look at the benifit of the GIO option that allows the child to buy more Insurance later in life regardless of their health . The reason for Life insurance on anyone is not to get rich but to take the financial burden out of death .

  32. LSM Insurance 08/28/2014 at 8:08 am

    Thanks Jerry – very well said.

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