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The Policy of the Deductible

I grew up in an insurance home. My dad, Herb, was an insurance agent for 32 years, with a particular passion for helping people with life insurance. My mom, Kathey, was an agent in the late 1990s and was asked to go into management, where she helped agents with the challenges involved in running their insurance agencies. Both of my parents retired from successful careers at the end of 2013.

As a kid, I remember sitting around the dinner table every night listening to my parents talk about their day. As with any industry, the insurance business has its own language with words and phrases that sound like gibberish to everyone else, especially kids. My younger brother, Greg, would get particularly irritated after these conversations had gone on for a while, and in his frustration, he would blurt out, “The policy of the deductible!” (Ironically, Greg now has a successful career in the commercial insurance business, himself.)

One of the lessons I took away from all of those conversations (at least, the parts I thought I understood) was the importance of getting insurance purchases right. I remember vividly as Dad lamented that one of his clients had opted for a cheaper term insurance policy as a younger man, only to develop lung cancer a few years later. He had called Dad to extend the policy after its term had expired. Sadly, he had become uninsurable.

As a financial advisor, I find that people often overlook life insurance as a potentially critical element of risk management in their overall financial plan. For clients who are still providing for dependent spouses or children, there is no better way to ensure that those dependents are cared for than life insurance. For those clients who have very large estates, life insurance may provide a cost-effective way to offset the burden of estate taxes.

Both of these applications of life insurance (provision for dependents and estate tax offsetting) require that your situation be evaluated specifically. Rules of thumb fall woefully short when it comes to financial planning, and developing an appropriate insurance plan is no exception.

While we do not sell life insurance policies at Financial Synergies, we have relationships with agents whom we trust. Let us know if you’d like help reevaluating your life insurance needs, and we’ll work with your current agent or put you in touch with one who can help.

Bryan Zschiesche

Bryan is a CERTIFIED FINANCIAL PLANNER™ and Senior Financial Advisor. He uses his expertise to develop investment strategies to protect and grow clients’ retirement savings. Bryan is a proponent of Elegant Simplicity, the idea that we can work through complex issues surrounding a financial problem and arrive at a sophisticated but simple solution.   Read Bryan’s Profile HereRead More Articles by Bryan

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