Wednesday, March 13, 2013

Life Insurance - Perceptions vs. Reality

Life insurance is often misunderstood by many retirees. In my many years as a financial planner, I have learned that most people (myself included) have some type of bias they bring to any situation, including their finances. It’s very challenging to step back, remove the emotion of these misconceptions and objectively evaluate a situation, especially when it comes to life insurance.

Recently, I had a client who was dissatisfied with their life insurance agent. Because of their bad experience with that individual, they had developed a negative bias towards life insurance in general. After much discussion, the client explained that one of their major concerns was that if either spouse passed away, the surviving spouse would only receive one of their two current Social Security checks. Their previous life insurance agent had attempted to take advantage of this concern for the surviving spouse by “selling a product” and it had left a bad taste in their mouths.