Insurance Made SimpleFor when things get complicated
Jim and Nancy were in their mid ‘60s and comfortably enjoying their retirement. They owned a beautiful home, were debt free, in good health, and Jim’s wife had a great pension. Jim had benefitted from hard work, smart planning, and an inheritance that while not large, he had leveraged into a comfortable situation.
Jim wanted an insurance policy on himself. Nancy was already covered, but could I help him find a plan?
I had known Jim for well over 30 years. We hadn’t spoken seriously in a few years other than annual birthday wishes, and a note at Christmas time. Of course, I was happy to be asked to try and help an old friend. I started with my needs analysis and Jim was only too happy to oblige me with the details I needed. It also provided us a great opportunity to get caught up completely, and reminisce some stories from our enjoyed past.
Jim asked me a couple of questions; “Isn’t a death benefit received tax free? And normally, would a cheque from the insurance company would be received by the beneficiary in less than a month after death?”
I told Jim that he was correct. My needs analysis confirmed that Jim really didn’t need a policy. He had succeeded in self-insuring himself. He didn’t want to leave a charitable legacy. He had no dependents, and only two mature stepchildren, which really weren’t in his life financially.
I understood the why Jim had reached out. He wanted a plan in place for Nancy that would give her access to tax free cash quickly upon his passing.
Depending on how the estate and the will is structured, being cash poor in the short term can be a problem following the death of the spouse. What could be worse for the surviving spouse to not be able to access cash in a speedy manner?
Life insurance isn’t about you. It’s about protecting and providing for those you love. And it’s continuing to show your love for them even when you are unable to do so in person. After Jim’s passing, Nancy will have lots of details to look after, but having cash available quickly won’t be one of them. It’s an elegant, simple, and guaranteed solution to a situation that they will have to deal with at some point.
Robert Dice is a life insurance professional in Guelph, Ontario. He is a rescue dog dad, a guitar player, and garage mechanic on the old car he has had for over 2 decades.