We Can't Afford It : Silver Transitions

We Can't Afford It

Posted by Ralph Sklar @ 10:10am on March 27, 2017

Some time back a client purchased two identical Life insurance policies from me for $125,000 each. He wouldn’t say why he wanted two small ones and not one bigger one.

A few years later my staff told me that his wife was on the line. Somehow I knew it would be bad news. It was. The night before a teenager was driving drunk and struck my client while he was walking his dog.

His wife, Pam, told me that she thought he had a $125,000 life insurance policy with me. I looked on my screen and saw that there were two identical policies with the same inception date. I didn’t remember that there were supposed to be two of them and thought it might be a mistake; so, without mentioning the second policy I asked her to give me a few minutes to call NYL and make sure that everything was in good order.

Then I called the Service Center. Both policies were in force. As soon as I hung up, it hit me that there might be different beneficiaries. Maybe he had a mistress? Good news, his wife was the beneficiary of both policies. So, I called Pam back and asked her if she was sitting down. She was. I said, ‘Pam, the policy is in force and in good order. You are the beneficiary.’ She thanked me. Then I said ‘but there are two identical policies, so you will be getting $250,000, not just $125,000.’ Then she screamed. At first a scream of relief. But then she started screaming at me. ‘We can’t afford two policies. I told him we could only afford $125,000. We can’t afford it!’ That went on for a while.

When I went to her house to get the death certificate there was an interesting twist. The mortgage on Pam’s house had been sold to an investor who started foreclosure. It was a race, but we got the money to Pam in time to pay off the mortgage, so she got to keep the house.

I have thought about Pam many times. I was so grateful that her husband bought the coverage he thought he needed, even though the premiums were a financial stretch. I am guilty of sometimes thinking of life insurance as an expense, and I don’t like paying my own premiums much less asking other people to pay their own. But experiences like this ground me. They remind me what is important. Life insurance is not fun or glamourous, but for pennies on the dollar it can deliver money when it is needed most. It keeps families in their homes, and peanut butter on the table. It saves businesses, and preserves family harmony. So it’s important, even if it isn’t glamourous.