Making Saving A Priority – Episode 292

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[00:01] Welcome to the Prosperity Podcast. On today’s episode of the Prosperity Podcast, we’re going to talk about what happens when you become uninsurable. And in fact, we’re even going to give you a real life story. We’re going to call this Jeff’s story. So Kim, help us understand Jeff’s story and help us to get a real insight on what is going to happen in this situation. Well, and thank you to Jeff for sharing it and giving us permission to share it, because it’s something that we often don’t think about and rarely talk about here on the Prosperity Podcast, because we’re all about good, positive things. And yet there are times in our lives when a medical condition can really cause a sharp left turn, if you will,

[00:50] in the normal march forward of life. So Jeff got married in 2005 and was traveling a lot and getting new home and everything else going on in that arena. And so deciding how much to put towards whole life insurance wasn’t a priority. It was more about, let’s just grab some term insurance and convert it later. So he did that. He grabbed some, I’m going to call it cheap term on the web. And it had some convertibility, but it was largely reduced after a period of five years. As time does, it flew right by and he’d converted a little bit of it, but really didn’t think about it very much until about six or seven years later when he got a very serious medical diagnosis and thankfully has survived that and is still living. And we’re grateful

[01:53] to have him with us. And yet even with the progress medically and getting back on track physically, when he went back to look at the insurance, the new medical exam, because the convertible term was no longer available, so he had to get a new medical exam, indicated a reoccurrence of the medical situation. And so just no availability, like you cannot get approved. So that’s called a decline in life insurance and not an easy thing to deal with. I’m very grateful I was not his agent at the time, because that would not have been fun news to share. So as he recovered from that and had some surgery and got back on track, and this is obviously now many, many years later, he is able to get life insurance again. That’s something

[02:46] I think a lot of people don’t realize is there are times when you might be uninsurable or declined for life insurance and then you can actually have enough forward medical progress that you could get life insurance again. And yet it’s going to be what’s called rated, it’s going to be more expensive. And so here is a situation where the cheap term insurance on the web, which I recommend, I mean, sometimes grabbing cheap term on the web is the right thing to do. But in this case, it turned out to be not so cheap, because it was only convertible for a very short period of time, that time went by. And because he never made savings a priority, and he didn’t make converting the term insurance a priority, he was not able to

[03:29] do it at all. So now, when he buys whole life, it’s a much more thorough process, a lengthy process because of the medical file. And the premium itself is what’s called rated. Ratings come in either letters or numbers, like ABCD, all the way up to GH and I, I think, are 12345 all the way up. And so in his case, and I’ve seen others where sometimes the premium can be double the premium of somebody of a typical of the same age with a more typical health history. So Jeff shared this with us just in an effort to say, hey, every now and then you do have to get serious about your finances and prioritize your savings. And as our listeners know, we believe that one of the best ways to save is by paying premiums into

[04:25] whole life insurance, which is a product that has cash value that is a fabulous place to store liquidity. And as we’ve talked before, it’s there and handy because of the discipline that is prevalent in it, because the premium shows up as a bill and we pay our bills. When we prioritize them and that savings creates opportunity and it’s opportunity that Jeff will not have. Oh, that’s, you know, it’s pretty tragic, but it’s wonderful that we’re able to learn from this experience and that he’s willing to share that. Yes. Super grateful for him. Super, super glad that he is living and back on track medically. And, you know, one of the things that’s so important about finances is just dealing with them where you are. And many times

[05:18] I’ll get somebody in their maybe 50s or 60s and maybe they were an accredited investor once and now they’re not anymore. Or maybe they had a business and things were going well and then they had a real downturn and it impacted their personal finances as well. And I just always say, don’t worry about it. That’s the past. You know, sometimes even clients will call and they’ve paid off a mortgage and they’ve listened to enough podcasts to know that I’m not a fan of paying off mortgages. And I’ll say, yes, but at least you saved the money. It’s not liquid anymore. It’s tied up in a home or a building or whatever, but you didn’t blow the money. So you just have to deal with finances where you are today and to have those sometimes hard

[06:02] discussions of this is where you are and this is what you need to do. Don’t worry about the past. There’s nothing that you can do about the past. You can learn from it, but I absolutely really want to encourage clients to think about where they are today, to deal with their finances, where they are today and to not let the past hold them back. You know, even somebody in their 50s, 60s, even 70s, my gosh, a healthy 70 year old, they still have 30 or 40 years to live. And so it’s absolutely a perfect time to get serious about your finances and do the things that are necessary to have good strength in those finances, which as we’ve talked so much about really comes back to saving and making saving a priority. Yeah, absolutely. You know,

[06:46] I think it’s remarkable when we hear about this story and there was at some point in his life where getting a whole life plan made sense for him and it became a priority. Now it always made sense, but it became a priority and he wanted to use that savings vehicle. So it makes me think for all the listeners out there that maybe only have term plans, they should do a self accounting and say, hey, what can I change up so that I can implement a whole plan earlier or I can convert this sooner? Do you think that’s something that listeners should do? I do. And yet at the same time, I don’t think that people should try to budget it in because I am a believer in saving first and not budgeting. I don’t think

[07:31] budgeting ever really works. I think it’s wise to have a sense of what it takes for you and your family to get through a month. But to nitpick around budgeting is just a frustrating exercise. So that’s kind of bottom up, if you will. If you just go top down and you say, okay, my income is X and I’m going to save 20% of it. And if you can’t save 20%, then go for 15 or go for 10 or go for 5 or whatever it is. And then yes, at some point people are going to have to, if they can’t save 15 to 20% of their income, they’re going to have to get serious and look at all of where they are spending money and see what they can cut back on. But I know for our family, it’s just been so much easier and so much healthier because

[08:16] we’re not nitpicking on things that are really not relevant just to save first and then spend the rest. Well, that is some wonderful advice. And I think even just that last piece of advice is we’ll call that marriage advice. That’s right there. And now you don’t have to worry about skipping out on your favorite Starbucks drink or depriving your spouse of the weekly date or whatever else that means, because you’re going to work from the top down. Yes. And that also enables values to play a role because like you said, for somebody, maybe it is the drink at Starbucks that is so valuable to them that they would rather give up dinner out or new clothes or whatever it is. Whereas somebody else would rather have the new

[09:01] clothes and give up the Starbucks. And nobody can judge that. That is entirely up to that person as long as they are saving first. Well, you guys have heard Jeff’s story. You’ve heard what you can do and your finances, how you can work from the top down and what you should be doing first. And what we want to ask you to do is to make sure that you leave us some reviews. Let us know what you think of the podcast. And then if you have personal questions, send those to us. Hello at partnersforprosperity.com. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.