Facts About Life Insurance

Why to use a Fee-Only Life Insurance Advisor--and not an agent--to help you find the right life insurance products for your needs.

Reasons to use a Fee-Only Life Insurance Advisor

Family Business Spends $1M on Redundant Life Insurance

A family business spent over $400,000 annually insuring the lives of three generations.

The sonsor second generationoriginally insured their parents to provide enough money for the sons to buy out the interest of the first parent to die.  A good idea, but since no business purchase agreement was ever made, the life insurance wouldn't necessarily fulfill the intended objective.

But since the family wasn't consulting a Fee-Only Insurance Advisor, no red flags went upand the family trusted the agent for additional estate planning services and products.  Life insurance trusts were set up, based on boilerplate forms the agent gave to the family lawyer.  And more second-to-die insurance was purchased by the trusts. Eventually, there were over forty policies on twelve family members, including $90,000 insuring grandchildren for amounts in excess of $1 million.

Finally, one of the sons suspected they were over-insured and hired a Fee-Only Insurance Advisor.  His analysis showed redundant and unnecessary policies.  In fact, either the trust or business purchase insurance was adequate given the family's net worth and the business's valuation. 

The Fee-Only Insurance Advisor saved the clients over $1,000,000 on a present value basis after the clients took remedial action. His fee was less than 10% of the savings.