Some words of wisdom to pass on to your clients:
Learning about disability insurance may seem boring to most, and to many uninformed Americans, it may seem like a lousy product to buy. Literally, it’s just a piece of paper. It has no moving parts, no wheels, no shiny chrome strips. You can’t ride on it, you can’t eat it, you don’t even hang it on the wall and display it to your friends when they come to visit you. So it seems to be a lousy, uninspired product. But from the dull words of policy terms and definitions come some very exciting situations and ultimate solutions to some of life’s greatest problems.
What I propose to you is that by using the services of a trusted insurance professional combined with the disability products of responsible insurance companies, you can create economic safeguards that are just like having a wall safe right there in your office or your home. Into that wall safe we’re going to place one hundred thousand dollars...a quarter million...a million...five million...more...however much it takes to make you feel comfortable in solving the financial problem that the living of life has created for you.
Now this is your money and it’s locked up in a safe to which you and you alone know the combination. Anytime that you are sick or hurt you can go to this safe, dial a knob, reach in, and take money out to make those mortgage payments to maintain the living standard of your family and, in addition, purchase the best healthcare on earth. That’s what I propose to do for you.
The money that is in that wall safe is not funny money. It’s the same kind that I can reach into my pocket and pull out. It’s the kind of money that we work hard for and the kind that we spend every day.
Consider two one-dollar bills. Suppose that this represents money that we have earned. What happens to this money? One of these bills is going to disappear right before our eyes. That’s called taxation. That gets scraped off even before we get it deposited into our bank account. We don’t even get credit for the float. Here’s what’s left for our hard work—one dollar. Now out of that dollar we hope that, after paying for the necessities of daily life plus the reasonable luxuries that we’ve become accustomed to that make up our standard of living, there will be a fraction leftover that we can put into an emergency fund. Grandparents and parents were always saying “Have a little cash reserve put aside for a rainy day situation.” That is still a good idea for anything other than getting sick or hurt. Then it is a terrible idea. Why?
Number one, you don’t know when you will get sick or hurt. It may be tomorrow and you’ve only saved a fraction of a dollar. That doesn’t buy much, does it? The other thing is you don’t know how much you’re going to need. After fifteen years of accumulation, you may not have enough to get over one heart attack or one bad automobile accident.
If you do have that auto accident or that heart attack and you use up all the money in the “rainy day” fund, there’s nothing left for a second go-around. This is the way we get sick or hurt. We get sick or hurt and recover, then get sick or hurt all over again. So we’ve got to have certain things regarding the money in our wall safe that’s different than the kind of money that’s dispensed at the bank.
What would happen if you had religiously lived within your means and there was a little money left over every pay cycle? So you go down to the bank and shove the money through the teller’s window and say “Deposit that into my rainy day fund.” Then comes that day you are found crumpled-up on the floor from a heart attack. The first thing doctors tell you when you are afflicted with that situation is what? Get the worrying out of your mind because that delays the healing. But how do you stop worrying about a situation like that? Why, you’ve got a “rainy day” fund. You don’t need to worry. You have money in the bank. So you summon your spouse and ask them to withdraw money from your account and pay the bills. Your spouse does as asked. You feel good, the creditors feel good, and your spouse feels good. Everybody is happy, especially the doctor and the CEO of the hospital whose standards of living have been maintained because you pay them so well.
You recover quickly because your “rainy day” fund allowed you to afford the best in medical care. You are well. You go back to work. More time passes. Bam! A second heart attack. You’re back in the hospital. You once again ask your spouse to return to the bank and get some more money out in order to pay the bills and satisfy the creditors. Unfortunately, the teller instructs your spouse that you only have sixty-eight bucks in your account and you owe thousands. Now what do you do?
The “rainy day” fund is never sufficient, but with your funny little wall safe it is an entirely different situation. First, when I say we’ll give you a wall safe and fill it with millions of dollars, all you are required to do is complete a disability insurance application and pay your premium. Done. The financial protection is there without years of accumulation. Second, the money that lines your wall safe is in there free from taxation. Neither your state government nor the IRS can get their tax-gathering hands on one penny of that money. It’s all yours when needed. Ultimately, if and when you do have that second heart attack—that second disablement—and you are wheeled-up to your wall safe, you carefully unlatch the door to see if there is anything left because you spent so much after your first heart attack. You are very apprehensive. Slowly you open the door and peek in. Low and behold! A fresh stack of money to use as you see fit!
W. Harold Petersen, RHU, DFP
RHU, DFP, is founder and chairperson of Petersen International Underwriters. He is recognized as an expert in underwriting development and policy innovation for such products as high-limit disability insurance, residual disability benefits, cash-value DI, and the expanding field of disability financial planning. The life/disability industry has acknowledged his leadership as an author, educator, motivator and leader, and has bestowed upon him the Harold R. Gordon Memorial Award (NAHU), the Will G. Farrell Award (NAIFA Los Angeles), the Lifetime Achievement Award (IDIS) and the Distinguished Service Award (NAIFA CA). His extensive industry involvement includes NAIFA, LIMRA, NAHU and The American College, all on local, state and national levels as well as IDIS. Petersen can be reached at Petersen International Underwriters, 23929 Valencia Boulevard, Valencia, CA 91355. Telephone: 800-345-8816. Email: email@example.com.