Christi Diggs, CLH Insurance Account Executive serving the Kansas City area, joins the program to discuss life insurance, the cost associated with term and whole, and why someone would want to buy a product they'll never use.
Below is a transcript of the episode, modified for your reading pleasure. For more information on the topics discussed in the episode, see the links at the bottom of this post.
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Christi DIGGS: Life insurance is the one type of insurance everyone should have. They should have a policy independent of their employer and they really should think about it. Even though it's not everyone's favorite topic, it is the one insurance someone will use at a point in their life and it's also the one insurance that people start digging for, searching for in an untimely death hoping they have a policy.
Grant FINLEY:Welcome to Your Insurance Connection podcast. I’m Grant Finley.
DIGGS: The term life insurance always make me laugh, maybe because of my sense of humor, because it pays out when someone no longer has life.
FINLEY: That’s Christi Diggs –
DIGGS: And I am an Account Executive here at CLH primarily in the Kansas City area.
FINLEY: Christi worked for CLH Insurance in 2014 and 2015 and rejoined the agency in 2018. She recently sat down with me to discuss one of life’s inevitabilities and how someone can make a sad and sometimes tragic situation a little more manageable with life insurance.
DIGGS: Life insurance is going to cover those expenses tied to, usually funeral, burial, some people would like to do a cremation. There's different things for their final wishes. And usually that allows the family to not have a financial burden on top of the emotional loss of losing a loved one. Sometimes life insurance can be a way that that loved one that passed on can help with college or help with, maybe a widow's living expenses. It has a lot of uses but unfortunately it's tied to not being alive.
FINLEY: When it comes to buying a life insurance policy, there isn’t a one-size fits all model. Instead, the policy owner does have a few options.
DIGGS: Some people have heard the terms whole life and then term life insurance. The easiest way to tell someone the difference is: whole life is similar to owning a house. That's something that there's going to be a return on investment over time. You're going to have it for as long as you're basically on the planet. If you live until you're 98 it would pay out, but it will also pay if maybe you live until 72. Where as a term insurance situation is one tied to the terms of your agreement. Similar to renting an apartment or a town home, you have it for that period of time. Term insurance is for that period of time in your life.
FINLEY: While it’s true a term life policy can keep your costs low and steady for the length of the term, including paying the rate of a young person after you’ve aged, when the term ends, you’ll have a decision to make.
DIGGS: A lot of times term insurance can be a lower cost, so people are attracted to that, but they don't like it if it doesn't meet their life expectancy. When they bought their first policy at 25 - they're now 55. There's a lot different risks involved and you're paying a 55 year old person's rate as opposed to a 25 year old person's rate. So that in itself - if you've had health events in between there - that could totally change what you're looking at and you have to decide to either start a new policy, to continue the terms of that one. So, that's why it's important to know all the options.
FINLEY: Which leads us to whole life. Does holding the same policy for as long as you live mean you pay the same rate throughout?
DIGGS: Some of them are designed to increase in rate as you age. You have some companies who will agree to lock in one rate from the time you buy it until the time you die. Those policies are pretty unique and sometimes the rate that you start out at is pretty high.
FINLEY: So, just how much are we talking about with these policies? Well, it kind of depends….
DIGGS: When you talk about cost, and no one likes to hear this but, a lot of times it's tied to lifestyle. A 30 year, non-smoker, relatively healthy, term life insurance rate, maybe a $40 or $50,000 policy say, if they want to make sure there's no debt left over, that person could pay anywhere from, I don't know, $10 to $40 a month. It kind of depends on different insurance companies. There's a lot of choices. But that same 30 year old person that chooses to use tobacco, in that particular case, you're often times doubling that rate. So, life insurance is one of those areas where all the lectures you get in health class in high school can come back and the rates are really tied to age, and then lifestyle choices. They're looking, in some cases, your weight - like I said, any other health event you've had. The pricing of it is really going to vary, so I'd hesitate because each company has different guidelines. But you can still buy groceries and have good life insurance.
FINLEY: Okay, we’ve heard about the different types of life insurance (term and whole), and we have an idea of how much a policy might cost based on our own circumstances. But why would someone want to add one more expense every month for something they themselves will never use?
DIGGS: Here's the thing. I get asked, "Christi, why do I need life insurance? When I'm gone, why do I need to care about - you know, let them worry about it." You know, I think it's really about having a good memory. I've been to family events where there's a fish fry or a spaghetti dinner, or different fund raising tied to paying for burial and final expenses. Not to mention the fact that you might have hospital bills that they're still going to want to collect on where you received treatment in your final days or final hours. So, to leave your family having to pay $10 or $12,000 for a basic funeral. And then on top of that, again dealing with the emotional loss - you're gone. Hopefully you've had an impact where you're missed. It just really seems to set the families up for a bad situation and, excuse me for saying so, but it seems pretty selfish in light of there's a lot of companies out there that will offer very affordable policies that you can get a "please bury me policy" and you can have it for life.
FINLEY: We’re certainly not interested in telling you what to do with your life or money. Maybe life insurance isn’t a priority for you, and that’s fine. But if you don’t have it, and you’re interested in finding out more about it and how it might apply to your own situation, Christi offers some suggestions on how to get started.
DIGGS: Well I often encourage people to - well, there's a couple different ways. Always take the offered life insurance through your company. Often times it's included. There's not a ton of additional cost. There's some buy ups. So I always say, "take that" because that's a great benefit. But if you have home insurance, auto insurance, ask that insurance provider, "what type of life insurance rates do you have?" A lot of times they're really trying to grow their business and they want to help you and be good advisers, so they're going to want to group and offer you life, as well as your home and auto, or renters insurance. I started out asking - I had a good friend who was talking about insurances. We were about to start a family and so I asked them what company they used, who they trusted. And the company they recommended, I bought that policy. I've had it ever since. my husband and I have had the same one. It was really just asking. I know you can access many companies online but, I guess maybe I'm biased, I think talking to an insurance agent you respect about what type of coverage you truly need - because certain people may want to sell you way more than you really need. So, find a person who cares about where you are in life and what your needs are.
FINLEY: Death is, and will continue to be, undefeated into the foreseeable future. None of us are getting out of this alive. But if we plan ahead and do our research, we have the chance to take care of our loved ones financially even after we’re gone. At the very least, we can spare them the burden of tying up any financial loose ends we might have when our time comes. Remember, like Christi said to open the program…
DIGGS: Life insurance is the one type of insurance everyone should have. It is the one insurance someone will use at a point in their life and it's also the one insurance that people start digging for, searching for in an untimely death hoping they have a policy and there's so much regret when they don't.
Your Insurance Connection podcast can be heard on iTunes and Stitcher or by visiting clhins.com/content/podcast. If you like what you’ve heard you can support this podcast by rating and/or sharing it on your social platforms. CLH Insurance is a “Trusted Choice”, independent agency servicing Missouri, Kansas and Illinois. For more information on CLH Insurance, visit clhins.com or call 636.391.0700 to speak with an agent. Until we connect again, thanks for listening.
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Show Notes - Where you can learn more about the people and ideas discussed in this episode.