Advanced Underwriting Consultants

First Experiences with Life Insurance

Today’s blog is from Life Insurance expert, Linas Sudzius.  Linas is a lawyer, speaker, former insurance company executive and author of the soon-to-be published book
What Most Life Insurance Agents Won’t Tell You. His law firm works with successful people on their estate planning, and with entrepreneurs on their business legal issues.
When he’s not working he enjoys being with his family and listening to audiobooks.

Reach him at linas.sudzius@underwriting.dev.

First Experiences with Life Insurance

I was about ten years old—this would have been about 1970–when I first became aware of life insurance.  My mother was a single parent to three children, and also owned a business—a beauty shop.  She had responsibilities and a mortgage, and was aware of the difficulties her kids would face if something happened to her.

Mom bought life insurance from a career agent.  I don’t remember what life insurance company he was affiliated with.  A career agent is an employee of the life insurance company, and his job is to sell that company’s life insurance policies to as many people as possible.

Being the youngest in the family, I went with Mom on one of her visits to the agent.  I remember him explaining a little about how the policy worked, and how it would help protect the family.  I also distinctly remember feeling the kind of unease I always felt in the presence of a high-pressure sales person.

The agent sold Mom some kind of whole life policy.  He stressed the importance of the policy’s cash value element, as well as its death benefit.

Years later, when I had graduated college, Mom asked me to contact the company to find out its value in the event of surrender.  I went to the agent’s office, and they gave me a quote.  After I compared what Mom paid to what the policy was worth, I realized that she wasn’t getting her money back—that, in fact, she was getting far less than she paid.  I remember my impression was that it didn’t seem fair.

I believe the kind of policy that Mom bought would have been guaranteed whole life.  The premium was a set, level amount that was due every year.  The death benefit was guaranteed to be available so long as the premium was paid.  And the policy developed cash value according to a guaranteed schedule printed inside the insurance policy.

Did Mom make the right decision in buying that life insurance policy from the pushy agent?  Even after all I’ve been through since then, it’s hard for me to say.  Certainly her family was protected by the life insurance death benefit while the policy was in force.  Could she have made a more efficient purchase?  Would she have been better served by a more professional agent?  I still wonder.

Do you have similar uneasy memories about buying life insurance?

This post is designed to help educate readers about general matters.  If you need specific advice you can rely on, please consult your professional advisor.