Life insurance for Realtors

Life insurance for Realtors
It seems that if you ask most real estate agents about their retirement strategies, you will find they tend to be wrapped up in real estate. If you ask them how they protect their retirement you will typically get a blank stare. When I talk to agents about life insurance for Realtors I usually get a blank stare as well. Lets face it life insurance is not a sexy topic. For Realtors it is not something that is tangible. The conversation usually begins and ends with “if I pass away my spouse can live on the cash flow from my real estate investments” I do not need the protection. I can play the what if scenario as much as I like, but if Realtors believe there is no need than there is no sale!

Life Insurance for Realtors now becomes about a financial strategy.

What I have found with Realtors if I talk about simple products like term life insurance. Agents just do not see the return on investment. In their world return on investment is their livelihood. Everything deals with “Cash Flow” or “Equity” etc. I found out quickly I have to discuss life insurance strategies and how they would fit into their financial or retirement plan. There are three things about Realtors I have found to be pretty common in terms of financial goals or concerns.

  • Most believe they can work until they drop, so there is never a big retirement concern.
  • An average agent does not see much past then next year in terms of planning.
  • Maybe the biggest concern is having a large enough emergency fund to pay for living expenses in case of a downturn in the market.

Like anything else in life if I interview a 100 agents I will get 100 different answers. But my goal is to try and figure out what basic life insurance strategy will fit into Realtor’s financial plan to make life insurance more appealing? There are three considerations I believe will be important. Life insurance for Realtors

  • Return on Investment
  • Emergency Funds that can be liquidated with no penalties
  • Income replacement in case someday they can no longer work

I am sure the cost will be an important consideration as well, but that is the same for every client. So what is my game plan and is there a specific product that will fit most Realtors needs?

Building a life insurance strategy for Realtors

So obviously I have to go through the basics on any policy I would recommend concerning the need for protection in general. Are there kids or a spouse involved? How would they be able to replace lost income? What are their financial goals etc. We will start from simple to more complex life insurance products.

Term Life Insurance:  Life insurance for Realtors

Pros: It is the least expensive and can give coverage over a period of time. One could purchase a Return of Premium term life policy and if they outlive their policy receive all their premiums back.

Cons: Term life does not help with liquidity if needed. If you out live the policy you may be back in the same boat you were previously?

Permanent Life insurance policies:

For the sake of argument I am going to lump together all the major policy types in this category. Whole Life, Universal Life, Index Universal Life, Variable Universal Life and Variable Life.

Pros: Life insurance coverage that will can be in place for your life time. Built in “Cash Value” in case you need funds for emergency purposes. The Cash Value can supplement your retirement income. You do not have to worry about out living your policy. It can typically satisfy return on investment.

Cons: Liquidity can be tough for the first 5-10 years due to surrender charges. It takes a while for the cash value to build. Some believe it is better to buy term and invest the rest concept. (Although I hardly see anybody do this).

You are probably now thinking that I just gave you some basic pros and cons on permanent vs term life and neither sounded all that attractive or accomplished the 3 items above?

  • Return on Investment
  • Emergency Funds that can be liquidated with no penalties
  • Income replacement in case someday they can no longer work

What if there was a policy that could give you a decent return on your investment, have full liquidity if needed without surrender charges, and finally protect you in case you can no longer work due to a critical illness of some type. (Income Replacement)? Would this type of policy sound intriguing or to good to be true?

What we talked about from the beginning is how to find a life insurance strategy that would be intriguing to Realtors and solve some of their basics needs. In terms of life insurance for Realtors there is obviously no one policy that fits all, but I want to look at a product I wish was around when I bought my VUL 20+ years ago. This strategy can be used with a Universal Life and Index Universal Life, but I believe the Index Universal Life works better. It can be done with a lump sum or monthly payments into the policy. I like the lump sum better so I am going to discuss this route.

What are some of the policy features that are attractive?

  • No surrender charges on the Cash Value
  • Safe Money, so funds in the cash value account can not decrease due to market risk
  • Built in Critical, Terminal and chronic illness riders which allow you to access to up to 90% of the death benefit if needed in case you can no longer work or need to pay for some type of long term care
  • The cash value will help supplement your retirement income

I am going to use a lump sum example to illustrate how the policy works.

  • 43 year old female average health.
  • $100,000 of coverage
  • $20,000 one time lump sum payment

Remember after day one there is NO SURRENDER CHARGE, so if you needed the funds in 6 months you would have access. This is actually the policy I am using for my wife. Illustrations can be run many different ways. Her illustration below on the policy we applied for.

See illustration

You will notice 3 columns. (3%) (4.6%) (6.6%). I could have added another $3000 to guarantee the death benefit on the 3% to year 100. But I have been in life insurance a long time and the most typical return on these policies is 4%-5% with no market risk. The middle column is the most honest illustration in my opinion. Remember these policies can be designed several different ways.

This policy solves 3 problems for my wife out side of the protection.

  • Liquidity
  • Long Term Care Protection
  • Supplemental retirement income

I can find options on Life Insurance for Realtors

We usually can find a policy that will fit your long term and short term goals and needs. I am actually a working real estate agent myself Smart Choice Realty Solutions.

Give me a call and see if I can help protect your family? 858-405-5094

About Help Insure Me
About Help Insure Me

We work with individuals across the nation to secure the best life insurance rates.

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