Hi, my name is Bob Brooks and today I want to talk to you about a very important process and that is making sure your family is protected. Now let's thinking through all of the different planning processes that you can go through when it comes to financial planning. And I was thinking about retirement and you know, you get to retirement, maybe you didn't plan so well, and you delayed retirement or you didn't have enough for retirement or maybe you didn't plan so well for college and you get to college and you're, you're a little bit short and you have to get money from other resources. That's okay, you can deal with that. That's not a game changer. Leaving your family in a premature death with no financial means is a major game changer.

And there's just absolutely no excuse for it. But I get why people don't go through the process of securing life insurance and making sure they have a solid, solid plan in place. I get that because I think there's there's some dynamics that get in the way, some roadblocks that get in the way. You know, first of all, a lot of times you sit in front of a very aggressive sales. person is putting in a sales box and nobody wants to do that. So that might make you kind of put things off and who wants to go through the underwriting and the application process, and then figuring out how much how much insurance and then trying to figure out through the maze of financial products and insurance policies that are out there.

And it's just the whole process of thinking about your own mortality. I think it just kind of puts people off say, you know what, I know I need to do it, but I'll do it another day. Well, here's the good news. Today, we're going to clear up all this confusion. Today, I'm going to show you how to select the right policy to go through the process of building a game plan and to make sure that your family's protected and I hope it's my hope that after you get through this simplification of the process that you will get immediately on this. Either check what you already have, or make sure that you jump in and start a brand new plan.

Now let's talk about a couple things you need to know first of all, bias alert, I've got a bias here. And anytime I have a bias I always like to mention this Because of the fact that I want you to know that I'm not this is not the way I want you to think. I'm not saying you should think this way, I'm just telling you why I think this way the pros and the cons, and that way you can figure out for yourself what makes sense. I'm a big believer in term insurance. In term insurance. We'll talk about really all the the details of that in a minute.

But term insurance is just basic insurance. And I think that that is, you know, the the thing that most people need. Now, as I was thinking about this, some of the confusion because it makes me think through, as I put these teaching courses together, why people do what they do, why they don't take action. And I think that the all of the different types of financial products and policies that are available, just add a certain level of confusion to the point that people just say, I don't know what to do. So I'm going to clear this up. And I think this is gonna simplify things a little bit for you.

First of all, I think that we have two different types of insurance situations. A typical situation typical insurance needs. versus an advanced knee. Okay, now on a typical insurance need, that's going to be just about the majority of us. And that requires term insurance, you want to get as much term insurance as possible so that you can get as much coverage. It's affordable, that covers that basic insurance need.

Then there's the more advanced Nina, this is the cash value policies. cash value policies are life insurance policies that have an investment angle to them in some kind. And you can you can build up cash value and use that cash value for other things. It's a multi purpose type, financial instrument, basically what it is, it's cash value life insurance. I think that that is appropriate for the person who has, you know, extra money sitting around, wants to diversify their investments wants other strategies on top of what they're doing. I don't think that you necessarily confuse that with the basic need and that's what happens is that you sit down with a financial advisor and they start, they start merging the two and you go, I can't afford this, and then you end up buying less than you need, and you also start investing into this as your primary investment vehicle.

I don't think that that's the case that you need to do with life insurance. I don't think life insurance needs to be your primary investment vehicle. So you got to split it up between the two. And it comes down to this, this classic debate of term versus cash value. Once again, think of it from the standpoint of simple insurance needs, which is most of us versus advanced needs, which is this cash value strategy. Now, the cash value policies, they got some pretty cool benefits and some attractive benefits.

But once again, the most important thing that you can get out of this out of this process is the most coverage possible, which is what you're going to get with term. So you get tax deferred growth of your investment, you get tax free retirement, some cases, tax and this is just some of the things that are touted and once again, a lot of this is based on some assumptions and a lot of assumptions have to line up so But this is the way it's presented the power of dividends with whole life, the ability to borrow insurance for life in some situations you had to guarantee like with whole life, but but a lot of situations that they call permanent insurance really aren't permanent insurance they have the ability to be, but some things have to line up. But you can see the list of benefits is a mile long, and the types of cash value life insurance, no wonder people are confused.

You have universal life insurance, which is driven by interest rates, you have variable universal life, which is driven by mutual fund type accounts. Then you have index life insurance, which is this other strategy that protects you from a loss, but it gives you the opportunity to participate in stock market returns, then you have whole life insurance. And this is driven continually by dividends and it's guaranteed for your whole life. And then you have an exotic combination of these different products. And the list goes on and on. You can do some pretty advanced things.

But once again, it's for I think it's advanced strategies. Now term insurance, it's just basic low cost insurance. There's a lot of companies that are competing for it, you'll see a variance in prices. It's designed to insure you while you were building up an estate, so you can insure yourself for 30 years, 20 years, 10 years, whatever. Obviously, the longer you insure yourself, the more expensive but it's inexpensive, in the best way, in my opinion to go about taking care of your family. Now, here's the bottom line with term versus permanent insurance.

If you came to me, and you said I need and we did an analysis and you said I need a million dollars worth of life insurance. And he said I said great, let me give you two options. I show you an advanced option that cost you $700 a month, I show you a term option that cost you 175 you have no business looking at the advanced option if you only have a couple hundred dollars, because the bottom line is you want to get the coverage the coverage is the most important that's why to me term makes the most sense. Because you can get the most coverage. It's not about the bells and the whistles. When you're talking about life insurance, it's not about the savings angle, it's not about the investment angle, it's about the pure coverage angle.

And I'm afraid that those get confused oftentimes now, if you said to me, hey, Bob, I've got it, you know, $1,000 that I can do something with on top of money, I'm already investing, maybe the advanced, the advanced strategy makes sense. But for most people, it's it's comes down to term. Now, what a lot of people do is that they go, they don't really go through a process of planning out goals. And and I know that, you know, who wants to talk about death to begin with, but it's an important conversation that you only need to have one time to set up your goals and make sure that the life insurance is what you need. Now, some of the things you want to be careful about don't fall into the thousands trap. I've talked to people before and they'd said, Yeah, you know, I got half a million dollars in life insurance to work.

I think I'm covered. Well, maybe you are. Maybe you're not. I'll tell you This, depending on what your goals are half a million dollars, although a lot of money may not go very far. The second one cashflow, how much and for how long, you want to determine how much if you if I were to pass away, I want to make sure that my wife has a certain amount of money coming in. So you want to determine what that amount of money is that you need to add that you need to have.

Are you going to pay off the mortgage? Are you going to pay off other debt? Are you going to take care of college? That's a big concern. Are there any special needs Do you have maybe a child on the autism spectrum that is going to need some special help and some special funding, other certain situations that you might be facing, maybe you're taking financial helping taking care of a parent, you want to factor all that in, and then a good advisor can say okay, now I'm going to take all this, put it together in one plan and determine how much that you need. determine the length of time for insurance.

This is an important one as well. And there's two different links that we will be talking about, first of all for a term insurance. A lot of times you know you can pick from 10 to 20 to 30 years. So you need to figure out don't just jump with the 30 because you think you're gonna take it as long as possible, go with what you need. I always say, get just about as much insurance as you need for how long and nothing more than the other thing is, how much are you going to insure for I talked about, you know, a spouse needing an income. Ideally, you'd be able to pay that income to them out of life insurance proceeds invested proceeds for, you know, maybe 2030 years for a lifetime maybe, or maybe it's just for 10 years, but determined in your game plan, how long you're going to take care of that income need.

Evaluate underwriting criteria, this is hardly ever done. And it's unfortunate because different insurance companies treat different ailments and conditions on a different risk base or different risk basis. What I mean by that is that one insurance company over here may not have an issue with high blood pressure, whereas this company over here may actually penalize you for having higher blood pressure. So you want to go through, you want to make sure you're with somebody that goes through all of any health issues that you have. Go through any medications that you're taking, and figure out exactly what your health profile is, and then run that past underwriters. Before you apply.

What you don't want to do is get through the go through the entire underwriting process and find out well, they don't like the fact that you have high cholesterol. And so they're going to rate you on the policy. So get that done ahead of time and figure out, make sure it fits with your own overall financial plan. This is important as well, let me give you an example. Don't buy don't put together an insurance plan on a silo, make sure that you're considering all your other assets. So for instance, if you have a, let's say, a $2 million life insurance need, but you have half a million dollars in a 401k plan yet $200,000 in a college account, you have $100,000 in cash, we take that 800,000 that you already have subtract it from the 2 million now you really only have a $1.2 million in need.

Remember term just fills the gap. If you had $2 million that investments in assets you don't need insurance, right because you've got it already. But if you don't, that's why we buy insure insurance to insure the gap. Now is a will enough and this is something a lot of people don't know. And let me my disclaimer is I'm not an attorney, nor am I trying to play one on a video so make sure you understand that you always get proper legal advice from those who are qualified to give it I'm just telling you how these things work. A will think of a will as a wish list.

You know, most people kind of have this false insecurity Well, I've got a will everything's taken care of a will only talks about what you wish to happen. A judge it has to go through probate in a judge has to approve the transfer of assets from the deceased to the family. Okay. Now, technically you could get by with that. I was supposed is not the ideal, but you can get it's better than nothing. But you can get by with that if it was just a husband and a wife and no young children.

The problem with the will to me it's not enough if you have young children because you're you're basically saying we wish and think about the word wish, we wish and hope that our kids will be taken care of by this guardian. Well, something can mess that up. It's it's not ironclad that it's going to happen. Or we wish that the money would even think about this to say that you have a million dollars for the life insurance, you have three or $400,000 investment. You have a $200,000 home when you die, and your spouse dies at the same time. And that's the worst case scenario we're talking about here.

You've just left maybe a four year old and a five year old, a $2 million estate. Now, what's going to happen there unless there's something ironclad put together, this is why I like a trust. A trust you can be very specific with what you what you would like that to do with a trust. It's kind of a crass way of saying it but I Controlling from the grave, you control the situation with a trust, you can say, I want all this money at my death to go into this trust account where I have a trustee. And my kids can get money for college, they can get money for support, but they can't take any of the money for anything else out until they're 30. When they're a little bit more financially responsible, or they're they take it out over a period of years, 3035 and 40.

There's a lot of you can set it up however best you want to, but it controls the distribution of assets to your kids. In that trust document. You say this is who I want to take care of my kids. This is who I want to handle the the money. No judge approves this. It's already done.

It's set up, ironclad document and this This eliminates a lot of risks that go along with an inheritance and people passing away. And a lot of the crazy things that happen when that does occur. So think of a trust a trust is not that much more expensive than a will if you go to the right attorney. You set that up, you can designate everything that you want to happen. You can even put an alternate alternative that something has happened to the guardians that you want. And one other tip, I always suggest, have a separate person for the trustee, have a separate person for The Guardian, and have a separate person for the vandals, the financials, you if you're talking about a lot of money, you want checks and balances inside of that document to make sure that nothing crazy happens and your kids get everything taken care of for them financially.

Is your spouse informed? This is a tough one, because what I find is that there is typically one spouse, majority of the time it's the husband, that takes care of everything. And the other spouse just she doesn't want to be involved. And I've had I can't tell you the number of times where I would hold a meeting with a client and he would say yeah, I just can't get my wife to come. She's just not interested. And so what ends up happening is that they end up taking care of the investments.

They have I've taken care of the life insurance. They've done all this work, and they haven't told their spouse anything. So what's worst case scenario, the husband passes away and the spouse is left absolutely uninformed and really clueless as to what, what's happened and what what the assets are. So now not only dealing with the emotion of loss, dealing with all this financial issues that have to be taken care of. It's not like they can be put on the back burner back burner. I've walked many widows through this process and it's not a pleasant process.

There was one case though, where a dear friend of ours had passed away. And he left his wife a notebook. The Notebook had every policy in it had every piece of information about them. It was it was a blueprint for everything financial that was in their in their life. There were even accident policies stuck with all she had to do. All we had to do is just walk through that notebook.

It was all laid out all the credit card numbers, credit card phone numbers. He Detailed out what he wanted at his funeral songs, service, even the reception, and his wife didn't have to think about anything. I think it's one of the greatest gifts that you can give your family is to not leave them wondering now. Another thing are your kids informed. Now when I say kids, I mean adult children. I see this all the time, adult children have no idea what's going on financially with their parents.

The parents pass away one at a time after the second death. They're combing through boxes and combing through the desk drawer trying to find financial information trying to make sure they don't miss something. And it is just a horrible process. If you are an if you're a parent that has adult children, go through the trust process. Go through the process of telling your kids where everything is in it, how they're taking care of what they need to do. And yeah, I know there's some dynamics.

There's always some family dynamic dynamics. Anytime you may be hesitant to say, hey, guess what, you're gonna get half a million dollars. And crazy things start happening. So, do do your best though, I think at the very least at least, let's get to one of those notebooks that you can organize and have there for your adult kids so they don't have to go through the process. I think one of the easiest processes to go through that's a little bit time consuming, but I think I think you see this now that it is a lot easier. It's a step by step process of getting your, your financial, financial situation in order for your family.

Because think about it, this is the worst case of all situations, something happens to you, and you leave your family in a horrible financial situation. And it's just not necessary. That's the point. There is low inexpensive term insurance you can by setting up the right legal documents and the good news is you only have to do this one time go through the process, review it every once in a while, but you go through the process once and make sure that family of yours is taken care of