October 1, 2025 • 33 mins
Insurance isn’t boring—it’s the foundation of your wealth plan. Most people treat it like an afterthought, only glancing at benefits during open enrollment and hoping nothing bad happens. That’s exactly why so many families end up scrambling when life hits them with the unexpected.
In this episode, I sit down with Maxwell Schmitz, a disability insurance and income protection expert, to rip apart the myths and excuses around insurance. We cover the psychology behind why people ignore it, the real risks you’re facing, and why disability insurance is more likely to impact your life than death during your working years.
We break down the most common myths:
- “I’m too young for that.”
- “I’ve got coverage through work, I’m good.”
- “Insurance is a waste of money.”
Max exposes the flaws in that thinking with numbers, stories, and blunt truth. We also dive into why group plans don’t cover nearly as much as you think, why cost isn’t the real barrier, and how insurance fits on the defensive side of your wealth strategy.
You’ll walk away knowing the exact policies to check before the year ends, the one question you should be asking your advisor, and why your emergency fund is the first move if you do nothing else.
This is a raw, no-BS conversation about protecting your income, your family, and your peace of mind. Watch the full episode on YouTube: https://youtu.be/aCx9zCcjhII
As always we ask you to comment, DM, whatever it takes to have a conversation to help you take the next step in your journey, reach out on any platform!
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DISCLOSURE: Awards and rankings by third parties are not indicative of future performance or client investment success. Past performance does not guarantee future results. All investment strategies carry profit/loss potential and cannot eliminate investment risks. Information discussed may not reflect current positions/recommendations. While believed accurate, Black Mammoth does not guarantee information accuracy. This broadcast is not a solicitation for securities transactions or personalized investment advice. Tax/estate planning information is general - consult professionals for specific situations. Full disclosures at www.blackmammoth.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stoy (00:22):
Well then it's time.
It is that time of the year,right?
Open enrollment.
We all have benefits.
Well, hopefully we all havebenefits, but a lot of us do
have benefits, and that's whereinsurance really comes into play
for most of us.
Most of us are not like nerds,like Max and I sitting here
thinking about insurance all thetime, working with our clients
(00:45):
throughout the year on it.
Uh, a lot of us, it comes up nowand for a couple reasons.
One, you think it's boring andyou just want to get it over
with, but it's one of the mostimpactful things in someone's
life, right?
The foundation of their wealthis going to be the insurance
side of things.
So without further ado, we gotour expert Max on.
A lot of you have never seen himbefore'cause he is never been on
(01:06):
the podcast before, but he isdefinitely part of our new
collective and is going to be anintegral part of that.
So, without further ado, max,welcome to the show for the
first time.
Maxwell Schmitz (01:16):
Thank you, Stoy.
Yeah, longtime listener.
First time caller.
Happy to be here.
Stoy (01:20):
Yeah, absolutely.
And like I've said on the otherones, for the first time, first
timers, if you will, we're gonnahave his bio, we're gonna have a
newsletter come out.
We will do a deep dive into himas another episode.
But we wanted to get this wholenew collective going.
And when this one comes out inOctober, it's benefits season,
it's insurance time.
And so we really wanted to hit,hit that first.
(01:41):
So now that we've introduced thetopic, I think people understand
it's gonna be about insurance.
Uh, I think we've, uh.
Hit that one enough times.
So let's dive into kind of justan overarching question, right?
Here's your first one.
Why do people treat insurancelike an afterthought?
Why is it not on the forefrontof their mind?
Maxwell Schmitz (01:59):
Oh my gosh.
There's so many psychologicalbiases at play when we think
about risk and insurance.
I mean the, the one that jumpsout the most notably in just my
daily conversations is anoptimism bias, right?
We're sort of wired and it'sthis evolutionary, you know,
ideal where we think good stuffis gonna happen to us and, and
(02:20):
that maybe now today is kind ofthe bottom tier and we're always
gonna move up.
In fact, there was, I think itwas, it was John Steinbeck who
was talking about how people aremore likely to think that
they're just temporarilyembarrassed millionaires if they
don't have wealth yet or ifthey're in poverty.
So it's, it's just one of thosethings where we're always kind
of feeling the up and up.
(02:41):
Risk and certainly disabilityand death fall right into that
category too.
So I think that's number one,uh, as far as the objection goes
to, to speaking and thinkingabout insurance.
Stoy (02:52):
Absolutely.
And I'll throw in there too,it's kind of like the same thing
when people talk about theirmoney.
That again, the optimism one,two.
If I don't talk about it, thenit won't hurt me type of
situation.
And I see that a lot when itcomes to life insurance and, and
health insurance.
Not so much, but definitelydisability, long-term care and,
and life insurance of like,yeah, if I just don't talk about
(03:15):
it, it's not gonna happen to me.
Right.
It's, it's not gonna be me.
And that is such a poor way ofthinking about it.
And yeah, people listening, ifyou don't have any of those
policies.
And you're healthy enough to getone.
You might, you might want to getthat now, but when someone
thinks of the insurance policyas an afterthought, like we had
just said, what's truly at stakewhen they do think that way,
Maxwell Schmitz (03:36):
I, you know, there's a lot of things that can
go wrong.
I try not to focus too much onthe negative.
What we like to really sort offrame things around is the
impact to, to one person's.
Life so we could talk about thestatistics.
The statistics are just kind ofcrazy, especially looking at the
disability side.
That's where I'm, I'm, you know,kind of carry my expertise so to
(03:57):
speak, is, is on the disability,the long-term care planning
front.
But same goes for life insurancetoo, except life insurance is a
lot more splashy in a certainway because, you know, everybody
sees the obituary, they see thepost on social media about
somebody who's now gone.
From the community, from theirlives, from their families, and
that's, that's just like, thatalways hits you.
(04:18):
And disability is just so muchmore of an individual silent
struggle that not as many peopleput out there.
It happens.
I mean, you can't really log onto social media these days
without seeing a GoFundMe forsomebody's health issues or
something going on like that.
But it's still one of thosethings where you're just not,
you don't see the person'smental health issues on display
(04:40):
like you would see a death.
You don't see their back issuesand the musculoskeletal problems
that come across a claims desk.
Cancer's a little bit morevisible, but even that, so many
people wait until.
It's deep into the process oftrying to either, you know,
reintegrate or really take thisfight to a more public level.
So there's, there's so much thatwe don't see under the surface
(05:01):
and under the current with thedisability that I think is just,
uh, it's just a different flavorof risk, but the impact is so
outsized because.
Of one, the probability there'sabout one in four of us entering
the workforce as 20 year oldswill experience a long-term
disability more than 90 days atsome point during their working
career.
(05:21):
I compare that to life insuranceand, you know, a death during a
working career.
It's, it's absolutely somethingthat can happen and something
everybody needs to prepare for,prepare their family for
financially.
But you know, it, it pales incomparison to the disability
statistics, but it could be justas impactful from a financial
standpoint.
(05:41):
And that's where I think a lotof people just kind of.
Either omit this part of theprocess in their planning, or,
you know, aren't aware quitefrankly about what's going on
because it's not being broughtup by their advisors.
The advisors wanna focus on, youknow, wealth management and
growing assets.
And that's just, and it's,that's obviously incredibly
important in the financialplanning space, but so is that
(06:02):
protection of the income becauseall those assets that you're
planning on accumulating downthe road, all that is fueled by
this, or you know, it's createdby this engine of your income.
So disability insurance is, isuniquely designed to protect an
income and create an incomereplacement source for somebody
who can no longer work justbecause they, they need a leave
(06:23):
of absence to focus on theirrecovery or maybe because
they're completely unable towork for the foreseeable future.
So you see this stuff reallyhave an impact on people's
lives?
Stoy (06:34):
For sure.
For sure.
Our next segment's really fun'cause we, we pull from social
media to society.
The regular asks media and wepose about four questions if
they're myths or not.
Right?
Kind of like MythBuster, if youwill in this.
So first one, I'm too young forthat.
We hear that a lot.
Anything insurance, not justdisability across the board.
(06:55):
It is always, I'm too young forthat.
What do you have to say to that?
Maxwell Schmitz (06:58):
Whew.
Uh, yeah, so I, I think about itin two ways.
One is the benefit side, so howmuch benefits at stake when
you're younger versus whenyou're older.
Um, you know, if you're making,let's just try to keep this math
easy for my, for my brain here,but you say you're making a
hundred thousand dollars a yearat age 35, and then you've got.
(07:22):
30 more years, right of, of yourworking career for most people.
So a thousand dollars saythere's no increases in pay.
It's just a hundred thousand for30 years.
That's$3 million.
And a lot of people don'trealize that that potential,
that they're yet worth theirfuture earnings, their human
life values, what some peoplecall it.
I think there's a little morevalue to human life than just
(07:42):
the earnings, but you, you know,you have this impact that you're
not really calculating andtabulating.
So that's one side of theequation for saying youth is
more important, right?
You, you need to take care ofthis while you're young because
something happens to you whenyou're 26, you know, that's 40
years potentially, you know, of,of, you know, dealing with a
traumatic brain injury or somesort of catastrophic scenario
(08:05):
that could.
That could take you outta theworkforce for a prolonged period
of time.
The other piece is theunderwriting side because a lot
of people don't wanna confrontthis, but there is the subject
of medical evaluation andeligibility for these benefits,
right?
Not just anybody can sign up.
There is an underwritingprocess, and I can promise
probably 99% of people they aregoing to be in their best health
(08:30):
when they're at age 25.
And while, you know, they mightphysically or like, you know,
they might get jacked whenthey're late, a little later in
life or something.
That's not what I'm talkingabout.
I'm talking about diagnoses andthings that show up in your
medical records because that'swhat prevents people from being
able to access this type ofcoverage later on.
So those are really the two mainpoints that I would, I would
(08:51):
probably highlight for why it'simportant to consider this stuff
while you're still young andhealthy and have a lot of
earnings left to, to create.
Stoy (08:59):
And it costs less when you're younger, right?
And it costs less all of that.
Plus it's gonna cost you less toget started now.
Uh, hundred percent.
Just like we say when we'reinvesting and everything else,
if you just get started now,it'll pay dividends down the
road.
And I wholeheartedly believethat on the insurance side,
specifically the disability sideas well.
Alright, next one.
I just got, I got somethingthrough work.
(09:20):
I'm good, right?
I'm good.
I see this one a lot comethrough both on the life
insurance and disability.
But the importance of like whatwork coverage means, I don't
think people really grasp.
So what would you say to that,that situation where someone's
like, you know what, I gotthrough work.
I'm good.
Maxwell Schmitz (09:37):
So it's, it's always good to, to, I think,
fortify that position and, andmake sure that they understand
that is an awesome benefit if anemployer is extending that.
I give them kudos all day long.
I'm not one to, to crap on, onthose types of policies.
There are some things you gottabe aware of if you're relying
that on that as your sole incomereplacement plan.
(09:58):
And that, I think that's, youknow, that's just something to
highlight here is like, youknow, you don't think of really
a 401k as a financial plan.
So you could, you shouldn'treally think about just a group
disability policy as adisability plan because it's
just one component, right?
And it's a vehicle for sure forreplacing income.
But what happens is a lot of thetime people just aren't aware of
(10:20):
this vast majority of groupdisability policy.
Are based solely on a salary.
So for people in sales, forbusiness owners taking
distributions, most of the timethat that type of income is not
even being covered.
So you're just looking at basesalary.
Um, and that's fine for a lot ofpeople.
You know, if you're making lessthan a hundred thousand dollars
(10:42):
a year, maybe even less than150,000.
You might be good if it's allsalary.
Your group disability is gonnabe pretty awesome in that
situation.
But if you have that, thatbonus, that commission, that
distribution, or even the RSUsthat we see a lot these days,
you know, again, that equitycompensation is a major factor,
a major component for your, foryour compensation.
(11:03):
Um, none of that's covered.
And if you stop working forFacebook or whoever, I don't
know if we're allowed to saynames here, but.
If, if, if that's the case andyou're no longer getting those,
those, uh, grants that werepromised to you, um, because you
can't work there anymore, that'sa huge loss to your overall
portfolio, to your financialplan and everything.
So that's all insurable on theindividual side, but not gonna
(11:27):
be covered by a group policy.
The other factor, the big factoris the taxation on that.
So.
Again, the vast majority, ninetimes outta 10 or more, the
group disability policy is gonnabe paid for by the employer.
You know, that's a, it soundsgreat, sounds very, um, you
know, benevolent, I think whenyou put it that way.
But guess what?
They're also taking that taxdeduction for those premium
(11:49):
dollars that they're spending.
So they're getting, they'regetting a little bit of.
You know, a, a kick, I shouldn'tsay kickback, but you know,
there's some sort of like, it's,there's something in it for them
too, right?
They get a big, nice taxdeduction for all of the
premiums that they're paying fortheir workforce.
And so with that.
Uncle Sam's gotta get paidsomehow.
Right?
And so since the, the employer'staking a deduction, that means
(12:11):
any tax is gonna be collected onthe benefits paid from the
policy.
So if you go on claim and you'recollecting your$6,000 a month
benefit, um, from your grouppolicy, well, you're gonna have
to pay back what, 20%, 25% forsome people.
So it's gonna be prettysignificant to have to, you're
already getting 60%.
(12:33):
Of, of your paycheck.
Typically, that's how thesepolicies are structured.
It's like 60 or 66% of yoursalary up to a certain maximum.
So if it's 66% to 6,000, um, youknow, you're getting, you're
getting that 6,000 if you'reearning over a 120 or something
like that.
(12:53):
So you're getting that full6,000, but then you gotta pay
tax on that.
So you're already getting ahaircut.
You're, and then it's a haircuton top of a haircut.
So.
Most people I'm talking to, youknow, ask the simple question,
okay, how much of your paycheckdo you need?
It's, they almost always laughbecause it's like a hundred
percent that, what kind ofstupid question is that?
So it's like, okay, well you'retalking about 60% and then
(13:15):
you're talking about paying taxon that as well.
So it ends up being a lot lessthan what a lot of people
realize.
Um, so again, great to havethese plans in place.
Almost always worth looking atsome type of supplemental
policy.
There's a few other factors likedefinitions and stuff like that.
We can dive into portability.
Um, so can you take that policywith you?
The answer's usually no.
(13:36):
The carrier can, can youunilaterally cancel the policy?
The employer can unilaterallycancel the policy.
So there's all different otherfactors that I think you gotta
take into consideration as wellas like, am I gonna be with this
company for life or am I evergonna maybe consider going out
and starting a venture on myown?
Or, you know, working for astartup that has zero coverage.
(13:56):
So there's, there's all theseconsiderations you gotta take
into place before you, like,just kind of rubber stamp it
done.
Um, you know, I've got my dithrough work.
Stoy (14:05):
Yeah.
Good points.
Made all very good points.
I'm, I'm on board with all ofit.
Awesome.
This other one is a longer,maybe deeper type answer
because.
People think about this all thetime.
Obviously, there's only oneguaranteed in life, although
people say two'cause of taxesand death, there's only really
one and that we're all gonna dieat some point.
So we're not really talkingabout life insurance per se when
(14:27):
it comes to this, but we aregonna talk about the long-term
care, disability, vision,dental, all of the other ones.
And this is what people say.
Insurance is just a waste ofmoney.
Right.
I'm not gonna see the benefitfrom it.
Mm-hmm.
What do you have to say to that?
Maxwell Schmitz (14:43):
Uh, it, it, I think the, where I usually end
up going is, again, taking thisoptimism with me.
It's like we could all be solucky if it is a waste of money,
and, and again, it just comesdown to that individual impact.
I try not to talk about thestatistics, but I think working
through a wider audience here,it's always helpful to just sort
of touch on that as well, youknow?
(15:04):
If you're, if you're a financialadvisor and you're looking at
the stats, you've got a hundredclients in your bank here and
you know that you're workingwith, and 25% potentially are
going to have some type ofdisabling illness or injury at
some point, you know, that'ssomething you just gotta pay
attention to.
And so talking about thestatistic I, I don't think is
super, super helpful.
(15:25):
But really, again, focusing onthat impact, understanding if
this was a one in 1000 riskwhere I'm not gonna be able to
provide for my family anymore.
What are you gonna do about it?
I mean, it doesn't even matterthat it's one in four.
It could be, yeah, one in ahundred, one in a thousand
doesn't really matter.
If there's action that I need totake to make sure that we're
gonna be okay, um, through avery challenging, probably the
(15:48):
hardest time in my life.
I am, you better believe I'm,I'm taking care of things and,
and making sure that we're,we're at least checking that box
to, to see what else is outthere.
Absolutely.
Stoy (15:59):
Next subject of ours is really one of my fun ones
because it, it dives into moreof your brain and how you
operate with your own clients,right?
We call this, this topic yourpoint of view, right?
And so we really want theaudience to understand like how
you operate, what you thinkthrough how your processes work
and regards to these questionsand things that you get into.
So let's dive into this firstone.
(16:21):
And, and it's kind of cool'causeit's a little combo of ours.
How do you, when someone sayswealth plan.
How are you reframing insuranceinside of the wealth plan?
Because like you had mentioned,a lot of advisors stick to, when
they say wealth, we're reallytalking about investments.
Investments and, and theirbusiness and stuff like that.
Right.
Less so not myself.
(16:41):
Guys.
Everyone, listen, it's not me.
I said some advisors don'treally speak about the
insurance.
So how do you reframe that forpeople who, when they hear
wealth plan insurance reallyisn't even part of it?
Maxwell Schmitz (16:52):
Right.
Uh, we see this a lot.
You know, I work with a ton ofRIAs and, and they're all doing
great work, truly.
But it, it is something thatthey'll self-identify as a, a, a
point of weakness.
For their, for their planning ingeneral.
So, you know, really the, thewhole point I, I think that I
try to invoke is that whenyou've got a wealth manager
(17:12):
who's focused on a wealth planand driving wealth and driving
value through investments andassets, I kind of see that as
like playing offense.
You know, we're trying to score,we're trying to go go hard at.
At all this stuff and, and makesure that we're, we're putting
people in the right position sothat we can get everything in
place for that final output,that that touchdown, that
(17:34):
victory, whatever.
But of course, that's one sideof the ball, right?
The other piece is the defense.
And so we, I mean, everybodyunderstands this to a certain
level.
I think they just, again, thatoptimism kind of overrides and
they're like, oh, no, but if wejust follow the playbook here,
it's all good.
Without even thinking aboutlike, okay, well what if life
takes over and.
You have that diagnosis or yourspouse has that diagnosis and,
(17:57):
and suddenly you're at homecaregiving.
I mean, this, this happened tomy folks too.
It's funny because we're, we'rea family business.
You know, my grandfather startedthe agency.
My mom and dad really built itup after my grandfather passed
away pretty young.
And so.
My mom and dad are doing allthis disability planning, and my
mom had a lung transplant outtanowhere.
So it was something where, youknow, this interstitial lung
(18:19):
disease, just, it sort of, itstarted slow, but then it really
accelerated and that resulted ina situation where, you know,
they had to suddenly, um, theyboth had to take time away from
work.
Right?
So it's not just, you know, oneindividual as, you know, a, a
financial contributor to thefamily.
(18:39):
There's so much more to thisproblem of of, of playing
defense that I think you'vegotta have really a whole sub
subset of, of people back thereto keep the football analogy
going a little bit here sincewe're we're in October, and in
the thick of it, you know, wereally gotta make sure that
you've got, you know, yourspecialists out there, the
people who just play on one sideof the field all the time
(19:02):
instead of trying to doeverything.
Imagine I'm a Niners fan, soimagine Brock Purdy playing
cornerback or, or a linebacker.
It's just he's gonna getsteamrolled all day long.
So, um, you know, you see thatstuff and, and you, you want the
right people in the right place.
Absolutely.
Stoy (19:19):
What do you think it is that people misunderstand the
most when it comes to insurance,but also disability in general
of between the cost and theoverall impact?
I know we've hit upon it alittle bit with everything that
we've been mentioning andeverything, but what do you
think's the most understmisunderstood?
Maxwell Schmitz (19:37):
The most misunderstood, I think around
insurance in general.
Is that there's people in suitswho are trying to screw you.
And I think it's something thatI've definitely subscribed to in
my life before I started meetinga lot of these people and sort
of understanding the balancesheets and stuff like that.
So I can, I'm skeptic by nature,cynic by nature, but.
(19:59):
It's one of those things whereif you actually have the
curiosity to take a look atthis, I'd really try to train
people's focus on loss ratioswhere you see that, you know, a
carrier's got a 60% loss ratiomaybe, and that sounds like, oh,
they're profiting 40%, butreally a lot of that is going to
reserves into operations and toall these, paying everybody for
(20:23):
sure.
And there's a CEO making a tonof money, of course.
But it's not just to, you know,polish his statute, right?
This is all about spreading therisk out.
So what a loss ratio is, is, youknow, you take a dollar and if
it's a 60% loss ratio, they'repaying 60 cents of that back out
to people in need, right?
And, and that's what disabilityis, especially.
(20:43):
It's like these are people goingthrough the most difficult stuff
in their life.
And so that's, that's the way Isee it now.
And after paying claims andseeing this firsthand with my
mom, we're seeing this reallykind of.
I, I think that shift is reallyimportant for people to
understand like, Hey, this is,this is a community aspect.
Like insurance is not, it's not,it wasn't invented to screw
(21:06):
people over.
It was actually invented to helpa community out, right?
To, to make sure that peoplewere cared for and that they had
the resources they need to, tohelp their families get through
life with or without them.
I think life insurance is one ofthe first types of insurance
invented for that reason.
And you've got, you know,disability, which has only been
around for a hundred years now,a little more than a hundred
(21:26):
years.
And so that's, that's one ofthose things where, you know, I
think we just forget as asociety that this is really
about taking care of each other.
Um, and similar to that, to thatGoFundMe type of thing.
Right?
You've got this GoFundMementality out there right now in
society.
Where it's like, okay, we allneed to band together and help
each other out.
So this is just, it's more likea prepaid GoFundMe, if you think
(21:48):
about it that way.
Like a subscription basedGoFundMe, if there's kind of
like a specific thing that'sgoing on and you don't have to
petition your community, youjust call up the 800 number and
start a claim or call your agentto help you start the claim.
So, so I think just the, thefocusing on the loss ratio in
the community, when I got reallycurious about that stuff, I
started to really see this forwhat it is, which is like.
(22:10):
We're helping people through themost difficult times in their
life, and I challenge carriersto, to keep that culture, keep
that mindset, and.
Fortunately, I've been blessedto work with some really good
carriers and, and have seen itall come through the right way.
There's been sticking points.
You know, I don't wanna paintjust a perfectly rosy picture
here.
There have been sticking pointsthat almost always falls on the
(22:32):
fact that there wasn't clearcommunication.
And so again, having an agentwho knows those communication
channels is really important.
Come claim time.
Stoy (22:41):
It's a great segue into the next, uh, subject of ours,
and that's actionable steps,right?
So in this one, we want you toprovide what should be their
actionable step that they cantake from this conversation,
right?
We've given a lot.
Um, and so the first one.
Actually, it's the second one onmy list.
However, what you had just said,I think triggers this a little
(23:01):
bit and that is what is onequestion that they should ask
their rep.
Maxwell Schmitz (23:07):
So asking the rep is, you know, do we have a
plan?
What's my, what's my plan?
B?
I think that's, that's reallythe question people need to ask
themselves.
Ask their rep if they, ifthey're working with a financial
advisor already, why hasn't thatbeen addressed, I guess would be
my main question because.
People know if it has or if ithasn't generally.
So asking that, that onequestion, what's my plan, is the
(23:28):
biggest thing.
But I think just to ize it alittle bit more, if somebody's
more DIY, a little morehands-on, or at least they need
to see a little more proofbefore they, before they get to
a point where they're gonnastart asking around about it, I
think it's just helpful tounderstand.
How much of a runway you have.
So an action point could be as,I mean, look at, look at your,
(23:49):
look at what you've got savedup.
You gotta know what you've gotat at some level, right?
You know, if you have a milliondollars saved up and you're
making 200,000 a year, well ifyour income goes south, that
million dollars sounds like agreat start to a retirement
saving.
But that's gonna last you fiveyears if you're using that full
(24:10):
income.
So that, that's just, that'sgonna create a lot of hardship
for you, because then you'regonna have to start from zero
when you get back to it.
Hopefully, you know, you're backto work after five years.
But if it goes beyond that, Imean, your lifestyle is changing
big time.
Um, your family's lifestyle ischanging.
So there's, uh, there's, it'snot hard, it's just math at the
end of the day.
It, and it takes a curiosity andit takes kind of like a.
(24:32):
A little, a little willpower, Ithink, to get people off the
starting line.
But once you go there, you'llfind it's pretty simple to do
the math.
Um, and, you know, so just help.
Do yourself a favor, do yourfamily a favor and, and do, do
some basic math here, and askyour advisor to fact check you
or math check you, or whateveryou want to do there.
But, um, definitely get your repinvolved so that you know, you
(24:54):
can, you can have somebodyworking alongside you to affirm
or tell you otherwise, like,Hey, no, you're good.
Actually, that 60% policythrough work is gonna cover
your.
The vast majority of your needsand you know, you're, you're
steady.
So it, it'll give you a lot of,a lot of, uh, a lot more peace
of mind to have that all figuredout.
Stoy (25:12):
What, give me two specific insurance policies that people
should check before the end ofthis year.
Maxwell Schmitz (25:19):
I mean, life and di stick out the most, to
me.
Health insurance is a given,right?
I think you have to have that tosome extent.
Um, but you know, those three,I, I like to focus on this kind
of group of, of coverages calledfamily benefits because this is,
um, if you, if you think abouthow we, how we.
(25:39):
The vernacular, at least withinthe industry, is like we're
looking at employee benefits andwe're looking at commercial
lines, and we're looking atpersonal lines, but there's
nothing really in that fourthquadrant, the personal lines and
commercial lines.
Of course being property andcasualty coverage, employee
benefits, you are looking atmore life and health type of
coverage.
But that family benefits isreally kind of the missing piece
(26:01):
that a lot of people aren'tfocused on, especially business
owners.
Right.
Family businesses and And Ithink are just.
Number one, you know, as far aswho needs this stuff the most on
a group basis, especiallybecause if you think about
working with your family, theseare all people you care about
for the most part.
Right?
Um, and so that's, you have tomake a really difficult decision
(26:22):
if you, if that person has totake, you know, six months off
to focus on that, you know, latestage cancer diagnosis that came
out of nowhere, you know?
And are you gonna continue topay that person throughout the
full six months?
What if it goes on to a year or24 months?
You have to have some kind ofplan designated for each one of
your employees.
(26:43):
And so you know, whether or notyou're gonna pay them or not is,
is, is good to identify, butthere's a way to transfer that
risk.
Both the risk of, you know,actually coming out of pocket
and paying the person.
You know, you can transfer thatto an insurance company, but you
can also transfer.
The decision, you know, if it'ssomething that's a little bit
more gray area, like, you know,maybe an employee has or a
(27:05):
family business partner hasbipolar or something where it's
just a little bit more, moredifficult for you to kind of
make that call, like, you know,I feel a little uncomfortable
about this.
You can have an an, an insurancecompany go through that process
and medically evaluate whetheror not the claim is legitimate
or not, or, or something, ifthere is a question mark about
(27:26):
that.
So, you know, you don't have tobear all of that as a business
owner.
And I think, you know, it justhelps for to, you know, I, I
just wanna encourage people to,to understand that that's
exactly what these companies arein the business of doing and we,
you can, can help'em get there.
Did I answer the question?
I feel like
Stoy (27:45):
I went, you actually answered both questions because
the next one was about whatentrepreneurs and small
businesses need to be reviewingand thinking about.
So you just bridged them all.
You jumped right in front.
That's fine.
I guess
Maxwell Schmitz (27:54):
that's good.
Stoy (27:56):
Alright, so the last one, and I think this probably is
gonna hit home for a lot ofpeople out there, what is one
move that they should make todayif they don't do anything else?
Listen to anything else we said.
What is that one move you thinkthey need to do today?
For their, for their health orfor their wealth journey and
stuff.
Maxwell Schmitz (28:15):
Oh man.
So the move today, and this ispretty blanket advice, but it's,
it's fully fund your emergencyfund.
Um, it's not by insurance.
It's not, you know, contactsomebody to help you through
this process.
It, it's.
You know, take, make yourselfaccountable to yourself and your
family and make sure that youhave a fully funded emergency
(28:36):
fund.
Six months is what I alwaysrecommend.
Um, you know, you might onlyhave to use three of it if
you've got a 90 day waitingperiod on your disability
insurance policy, but that's thetype of emergency we're talking
about, right?
You need to make sure that you,you guys, you, your family,
everybody can, can be in thesame place from a lifestyle
perspective for six months ifyou're not doing that.
(28:59):
I mean, really encourage you tojust put all your effort into
that.
So yeah, I guess that that's,that's where I'd leave it right
now is just make sure thatyou're, you're fully funding
that emergency fund and, andthat you can weather some storms
if they come your way.
Stoy (29:11):
That's very simple advice, like fund that thing.
Um, and it does a lot of things.
Not only does it help andprotect for.
Shit situations.
Right.
But the mental health side of itand how much freer you are
knowing that no matter reallywhat happens, like, we're good,
we'll figure it out, or we havesix months to figure it out.
That is, that is huge andmassive.
(29:33):
So I, I definitely jump on boardwith.
Today, let's make a plan andlet's start moving on that For
sure.
Maxwell Schmitz (29:40):
I remember, I, I mean, you bring up the
emotional side of it too.
Like, I remember to the daywhere, when that happened for us
and I was like, oh my God, Ifinally felt like that, like
there was some peace.
And as far as what, you know,'cause every, every once in a
while, you know, you'll still,when you're starting a family
and stuff and you just get ahouse and all this stuff.
Life can feel so expensive andso overwhelming, and those bills
(30:03):
just keep on coming.
And, and so you might go overthe credit card or, you know,
whatever balance you've got inthat account or, or what have
you.
And so it's good to just feellike, okay, I can, I can go over
a little bit here and there andI don't have to just like, you
know, just try to continue torecreate the wheel and rewrite
the budget every single month.
So that's, that's a powerfulpoint.
Stoy (30:25):
Yeah, everybody, Hey, you're not alone.
That's what we're doing.
All this whole topics and thecollectives for is the fact that
you are not alone in your life,right?
There are experts who have seena lot.
We've, we have more stories thanyou know, and we're here to
help.
And we understand that A lot ofyou think all of this is a money
decision, and truthfully, it'san emotional decision, right?
(30:48):
And that's why part of thecollective Max is part of it.
Obviously others are, we'refocused about you.
And what matters to you in yourlife?
Not what?
Plan A, plan B, step one.
Step three has taught every oneof us in a book, right?
Your situation in life isdifferent.
So it's insurance season review.
Take the time, reach out if youhave questions, we're here for
(31:10):
you.
Right?
And ultimately, again, it isyour life, your journey, but
you're not alone, max.
Appreciate you.
Maxwell Schmitz (31:18):
Alright, thanks soy.
Black Mammoth (31:33):
The proceeding program was sponsored by Black
Mammoth.
Any awards, rankings, orrecognition by unaffiliated
third parties or publicationsare in no way indicative of the
advisor's future performance orany individual client's
investment success.
No award ranking or recognitionshould be construed as a current
or past endorsement of blackmammoth.
(31:54):
Information regarding specificawards, rankings, or
recognitions is available on theBlack Mammoth website, www.black
mammoth.com.
All investment strategies havethe potential for profit or loss
Investment strategies such asasset allocation,
diversification, or rebalancingdo not assure or guarantee
(32:15):
better performance and cannoteliminate the risk of investment
losses.
There are no guarantees that aportfolio employing these or any
other strategy will outperform aportfolio that does not engage
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This broadcast should not beconstrued by any client or
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attempt to affect transactionsand securities or the rendering
(32:38):
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The information discussed inthis broadcast may no longer be
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Information presented isbelieved to be factual and up to
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Black mammoth do not guaranteeits accuracy and it should not
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(33:00):
discussed.
The tax and the estate planninginformation discussed is general
in nature and is provided forinformational purposes only, and
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Listeners should consult anattorney or tax professional
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Past performance is notindicative of future results.
Well then it's time.
It is that time of the year,right?
Open enrollment.
We all have benefits.
Well, hopefully we all havebenefits, but a lot of us do
have benefits, and that's whereinsurance really comes into play
for most of us.
Most of us are not like nerds,like Max and I sitting here
thinking about insurance all thetime, working with our clients
(00:45):
throughout the year on it.
Uh, a lot of us, it comes up nowand for a couple reasons.
One, you think it's boring andyou just want to get it over
with, but it's one of the mostimpactful things in someone's
life, right?
The foundation of their wealthis going to be the insurance
side of things.
So without further ado, we gotour expert Max on.
A lot of you have never seen himbefore'cause he is never been on
(01:06):
the podcast before, but he isdefinitely part of our new
collective and is going to be anintegral part of that.
So, without further ado, max,welcome to the show for the
first time.
Maxwell Schmitz (01:16):
Thank you, Stoy.
Yeah, longtime listener.
First time caller.
Happy to be here.
Stoy (01:20):
Yeah, absolutely.
And like I've said on the otherones, for the first time, first
timers, if you will, we're gonnahave his bio, we're gonna have a
newsletter come out.
We will do a deep dive into himas another episode.
But we wanted to get this wholenew collective going.
And when this one comes out inOctober, it's benefits season,
it's insurance time.
And so we really wanted to hit,hit that first.
(01:41):
So now that we've introduced thetopic, I think people understand
it's gonna be about insurance.
Uh, I think we've, uh.
Hit that one enough times.
So let's dive into kind of justan overarching question, right?
Here's your first one.
Why do people treat insurancelike an afterthought?
Why is it not on the forefrontof their mind?
Maxwell Schmitz (01:59):
Oh my gosh.
There's so many psychologicalbiases at play when we think
about risk and insurance.
I mean the, the one that jumpsout the most notably in just my
daily conversations is anoptimism bias, right?
We're sort of wired and it'sthis evolutionary, you know,
ideal where we think good stuffis gonna happen to us and, and
(02:20):
that maybe now today is kind ofthe bottom tier and we're always
gonna move up.
In fact, there was, I think itwas, it was John Steinbeck who
was talking about how people aremore likely to think that
they're just temporarilyembarrassed millionaires if they
don't have wealth yet or ifthey're in poverty.
So it's, it's just one of thosethings where we're always kind
of feeling the up and up.
(02:41):
Risk and certainly disabilityand death fall right into that
category too.
So I think that's number one,uh, as far as the objection goes
to, to speaking and thinkingabout insurance.
Stoy (02:52):
Absolutely.
And I'll throw in there too,it's kind of like the same thing
when people talk about theirmoney.
That again, the optimism one,two.
If I don't talk about it, thenit won't hurt me type of
situation.
And I see that a lot when itcomes to life insurance and, and
health insurance.
Not so much, but definitelydisability, long-term care and,
and life insurance of like,yeah, if I just don't talk about
(03:15):
it, it's not gonna happen to me.
Right.
It's, it's not gonna be me.
And that is such a poor way ofthinking about it.
And yeah, people listening, ifyou don't have any of those
policies.
And you're healthy enough to getone.
You might, you might want to getthat now, but when someone
thinks of the insurance policyas an afterthought, like we had
just said, what's truly at stakewhen they do think that way,
Maxwell Schmitz (03:36):
I, you know, there's a lot of things that can
go wrong.
I try not to focus too much onthe negative.
What we like to really sort offrame things around is the
impact to, to one person's.
Life so we could talk about thestatistics.
The statistics are just kind ofcrazy, especially looking at the
disability side.
That's where I'm, I'm, you know,kind of carry my expertise so to
(03:57):
speak, is, is on the disability,the long-term care planning
front.
But same goes for life insurancetoo, except life insurance is a
lot more splashy in a certainway because, you know, everybody
sees the obituary, they see thepost on social media about
somebody who's now gone.
From the community, from theirlives, from their families, and
that's, that's just like, thatalways hits you.
(04:18):
And disability is just so muchmore of an individual silent
struggle that not as many peopleput out there.
It happens.
I mean, you can't really log onto social media these days
without seeing a GoFundMe forsomebody's health issues or
something going on like that.
But it's still one of thosethings where you're just not,
you don't see the person'smental health issues on display
(04:40):
like you would see a death.
You don't see their back issuesand the musculoskeletal problems
that come across a claims desk.
Cancer's a little bit morevisible, but even that, so many
people wait until.
It's deep into the process oftrying to either, you know,
reintegrate or really take thisfight to a more public level.
So there's, there's so much thatwe don't see under the surface
(05:01):
and under the current with thedisability that I think is just,
uh, it's just a different flavorof risk, but the impact is so
outsized because.
Of one, the probability there'sabout one in four of us entering
the workforce as 20 year oldswill experience a long-term
disability more than 90 days atsome point during their working
career.
(05:21):
I compare that to life insuranceand, you know, a death during a
working career.
It's, it's absolutely somethingthat can happen and something
everybody needs to prepare for,prepare their family for
financially.
But you know, it, it pales incomparison to the disability
statistics, but it could be justas impactful from a financial
standpoint.
(05:41):
And that's where I think a lotof people just kind of.
Either omit this part of theprocess in their planning, or,
you know, aren't aware quitefrankly about what's going on
because it's not being broughtup by their advisors.
The advisors wanna focus on, youknow, wealth management and
growing assets.
And that's just, and it's,that's obviously incredibly
important in the financialplanning space, but so is that
(06:02):
protection of the income becauseall those assets that you're
planning on accumulating downthe road, all that is fueled by
this, or you know, it's createdby this engine of your income.
So disability insurance is, isuniquely designed to protect an
income and create an incomereplacement source for somebody
who can no longer work justbecause they, they need a leave
(06:23):
of absence to focus on theirrecovery or maybe because
they're completely unable towork for the foreseeable future.
So you see this stuff reallyhave an impact on people's
lives?
Stoy (06:34):
For sure.
For sure.
Our next segment's really fun'cause we, we pull from social
media to society.
The regular asks media and wepose about four questions if
they're myths or not.
Right?
Kind of like MythBuster, if youwill in this.
So first one, I'm too young forthat.
We hear that a lot.
Anything insurance, not justdisability across the board.
(06:55):
It is always, I'm too young forthat.
What do you have to say to that?
Maxwell Schmitz (06:58):
Whew.
Uh, yeah, so I, I think about itin two ways.
One is the benefit side, so howmuch benefits at stake when
you're younger versus whenyou're older.
Um, you know, if you're making,let's just try to keep this math
easy for my, for my brain here,but you say you're making a
hundred thousand dollars a yearat age 35, and then you've got.
(07:22):
30 more years, right of, of yourworking career for most people.
So a thousand dollars saythere's no increases in pay.
It's just a hundred thousand for30 years.
That's$3 million.
And a lot of people don'trealize that that potential,
that they're yet worth theirfuture earnings, their human
life values, what some peoplecall it.
I think there's a little morevalue to human life than just
(07:42):
the earnings, but you, you know,you have this impact that you're
not really calculating andtabulating.
So that's one side of theequation for saying youth is
more important, right?
You, you need to take care ofthis while you're young because
something happens to you whenyou're 26, you know, that's 40
years potentially, you know, of,of, you know, dealing with a
traumatic brain injury or somesort of catastrophic scenario
(08:05):
that could.
That could take you outta theworkforce for a prolonged period
of time.
The other piece is theunderwriting side because a lot
of people don't wanna confrontthis, but there is the subject
of medical evaluation andeligibility for these benefits,
right?
Not just anybody can sign up.
There is an underwritingprocess, and I can promise
probably 99% of people they aregoing to be in their best health
(08:30):
when they're at age 25.
And while, you know, they mightphysically or like, you know,
they might get jacked whenthey're late, a little later in
life or something.
That's not what I'm talkingabout.
I'm talking about diagnoses andthings that show up in your
medical records because that'swhat prevents people from being
able to access this type ofcoverage later on.
So those are really the two mainpoints that I would, I would
(08:51):
probably highlight for why it'simportant to consider this stuff
while you're still young andhealthy and have a lot of
earnings left to, to create.
Stoy (08:59):
And it costs less when you're younger, right?
And it costs less all of that.
Plus it's gonna cost you less toget started now.
Uh, hundred percent.
Just like we say when we'reinvesting and everything else,
if you just get started now,it'll pay dividends down the
road.
And I wholeheartedly believethat on the insurance side,
specifically the disability sideas well.
Alright, next one.
I just got, I got somethingthrough work.
(09:20):
I'm good, right?
I'm good.
I see this one a lot comethrough both on the life
insurance and disability.
But the importance of like whatwork coverage means, I don't
think people really grasp.
So what would you say to that,that situation where someone's
like, you know what, I gotthrough work.
I'm good.
Maxwell Schmitz (09:37):
So it's, it's always good to, to, I think,
fortify that position and, andmake sure that they understand
that is an awesome benefit if anemployer is extending that.
I give them kudos all day long.
I'm not one to, to crap on, onthose types of policies.
There are some things you gottabe aware of if you're relying
that on that as your sole incomereplacement plan.
(09:58):
And that, I think that's, youknow, that's just something to
highlight here is like, youknow, you don't think of really
a 401k as a financial plan.
So you could, you shouldn'treally think about just a group
disability policy as adisability plan because it's
just one component, right?
And it's a vehicle for sure forreplacing income.
But what happens is a lot of thetime people just aren't aware of
(10:20):
this vast majority of groupdisability policy.
Are based solely on a salary.
So for people in sales, forbusiness owners taking
distributions, most of the timethat that type of income is not
even being covered.
So you're just looking at basesalary.
Um, and that's fine for a lot ofpeople.
You know, if you're making lessthan a hundred thousand dollars
(10:42):
a year, maybe even less than150,000.
You might be good if it's allsalary.
Your group disability is gonnabe pretty awesome in that
situation.
But if you have that, thatbonus, that commission, that
distribution, or even the RSUsthat we see a lot these days,
you know, again, that equitycompensation is a major factor,
a major component for your, foryour compensation.
(11:03):
Um, none of that's covered.
And if you stop working forFacebook or whoever, I don't
know if we're allowed to saynames here, but.
If, if, if that's the case andyou're no longer getting those,
those, uh, grants that werepromised to you, um, because you
can't work there anymore, that'sa huge loss to your overall
portfolio, to your financialplan and everything.
So that's all insurable on theindividual side, but not gonna
(11:27):
be covered by a group policy.
The other factor, the big factoris the taxation on that.
So.
Again, the vast majority, ninetimes outta 10 or more, the
group disability policy is gonnabe paid for by the employer.
You know, that's a, it soundsgreat, sounds very, um, you
know, benevolent, I think whenyou put it that way.
But guess what?
They're also taking that taxdeduction for those premium
(11:49):
dollars that they're spending.
So they're getting, they'regetting a little bit of.
You know, a, a kick, I shouldn'tsay kickback, but you know,
there's some sort of like, it's,there's something in it for them
too, right?
They get a big, nice taxdeduction for all of the
premiums that they're paying fortheir workforce.
And so with that.
Uncle Sam's gotta get paidsomehow.
Right?
And so since the, the employer'staking a deduction, that means
(12:11):
any tax is gonna be collected onthe benefits paid from the
policy.
So if you go on claim and you'recollecting your$6,000 a month
benefit, um, from your grouppolicy, well, you're gonna have
to pay back what, 20%, 25% forsome people.
So it's gonna be prettysignificant to have to, you're
already getting 60%.
(12:33):
Of, of your paycheck.
Typically, that's how thesepolicies are structured.
It's like 60 or 66% of yoursalary up to a certain maximum.
So if it's 66% to 6,000, um, youknow, you're getting, you're
getting that 6,000 if you'reearning over a 120 or something
like that.
(12:53):
So you're getting that full6,000, but then you gotta pay
tax on that.
So you're already getting ahaircut.
You're, and then it's a haircuton top of a haircut.
So.
Most people I'm talking to, youknow, ask the simple question,
okay, how much of your paycheckdo you need?
It's, they almost always laughbecause it's like a hundred
percent that, what kind ofstupid question is that?
So it's like, okay, well you'retalking about 60% and then
(13:15):
you're talking about paying taxon that as well.
So it ends up being a lot lessthan what a lot of people
realize.
Um, so again, great to havethese plans in place.
Almost always worth looking atsome type of supplemental
policy.
There's a few other factors likedefinitions and stuff like that.
We can dive into portability.
Um, so can you take that policywith you?
The answer's usually no.
(13:36):
The carrier can, can youunilaterally cancel the policy?
The employer can unilaterallycancel the policy.
So there's all different otherfactors that I think you gotta
take into consideration as wellas like, am I gonna be with this
company for life or am I evergonna maybe consider going out
and starting a venture on myown?
Or, you know, working for astartup that has zero coverage.
(13:56):
So there's, there's all theseconsiderations you gotta take
into place before you, like,just kind of rubber stamp it
done.
Um, you know, I've got my dithrough work.
Stoy (14:05):
Yeah.
Good points.
Made all very good points.
I'm, I'm on board with all ofit.
Awesome.
This other one is a longer,maybe deeper type answer
because.
People think about this all thetime.
Obviously, there's only oneguaranteed in life, although
people say two'cause of taxesand death, there's only really
one and that we're all gonna dieat some point.
So we're not really talkingabout life insurance per se when
(14:27):
it comes to this, but we aregonna talk about the long-term
care, disability, vision,dental, all of the other ones.
And this is what people say.
Insurance is just a waste ofmoney.
Right.
I'm not gonna see the benefitfrom it.
Mm-hmm.
What do you have to say to that?
Maxwell Schmitz (14:43):
Uh, it, it, I think the, where I usually end
up going is, again, taking thisoptimism with me.
It's like we could all be solucky if it is a waste of money,
and, and again, it just comesdown to that individual impact.
I try not to talk about thestatistics, but I think working
through a wider audience here,it's always helpful to just sort
of touch on that as well, youknow?
(15:04):
If you're, if you're a financialadvisor and you're looking at
the stats, you've got a hundredclients in your bank here and
you know that you're workingwith, and 25% potentially are
going to have some type ofdisabling illness or injury at
some point, you know, that'ssomething you just gotta pay
attention to.
And so talking about thestatistic I, I don't think is
super, super helpful.
(15:25):
But really, again, focusing onthat impact, understanding if
this was a one in 1000 riskwhere I'm not gonna be able to
provide for my family anymore.
What are you gonna do about it?
I mean, it doesn't even matterthat it's one in four.
It could be, yeah, one in ahundred, one in a thousand
doesn't really matter.
If there's action that I need totake to make sure that we're
gonna be okay, um, through avery challenging, probably the
(15:48):
hardest time in my life.
I am, you better believe I'm,I'm taking care of things and,
and making sure that we're,we're at least checking that box
to, to see what else is outthere.
Absolutely.
Stoy (15:59):
Next subject of ours is really one of my fun ones
because it, it dives into moreof your brain and how you
operate with your own clients,right?
We call this, this topic yourpoint of view, right?
And so we really want theaudience to understand like how
you operate, what you thinkthrough how your processes work
and regards to these questionsand things that you get into.
So let's dive into this firstone.
(16:21):
And, and it's kind of cool'causeit's a little combo of ours.
How do you, when someone sayswealth plan.
How are you reframing insuranceinside of the wealth plan?
Because like you had mentioned,a lot of advisors stick to, when
they say wealth, we're reallytalking about investments.
Investments and, and theirbusiness and stuff like that.
Right.
Less so not myself.
(16:41):
Guys.
Everyone, listen, it's not me.
I said some advisors don'treally speak about the
insurance.
So how do you reframe that forpeople who, when they hear
wealth plan insurance reallyisn't even part of it?
Maxwell Schmitz (16:52):
Right.
Uh, we see this a lot.
You know, I work with a ton ofRIAs and, and they're all doing
great work, truly.
But it, it is something thatthey'll self-identify as a, a, a
point of weakness.
For their, for their planning ingeneral.
So, you know, really the, thewhole point I, I think that I
try to invoke is that whenyou've got a wealth manager
(17:12):
who's focused on a wealth planand driving wealth and driving
value through investments andassets, I kind of see that as
like playing offense.
You know, we're trying to score,we're trying to go go hard at.
At all this stuff and, and makesure that we're, we're putting
people in the right position sothat we can get everything in
place for that final output,that that touchdown, that
(17:34):
victory, whatever.
But of course, that's one sideof the ball, right?
The other piece is the defense.
And so we, I mean, everybodyunderstands this to a certain
level.
I think they just, again, thatoptimism kind of overrides and
they're like, oh, no, but if wejust follow the playbook here,
it's all good.
Without even thinking aboutlike, okay, well what if life
takes over and.
You have that diagnosis or yourspouse has that diagnosis and,
(17:57):
and suddenly you're at homecaregiving.
I mean, this, this happened tomy folks too.
It's funny because we're, we'rea family business.
You know, my grandfather startedthe agency.
My mom and dad really built itup after my grandfather passed
away pretty young.
And so.
My mom and dad are doing allthis disability planning, and my
mom had a lung transplant outtanowhere.
So it was something where, youknow, this interstitial lung
(18:19):
disease, just, it sort of, itstarted slow, but then it really
accelerated and that resulted ina situation where, you know,
they had to suddenly, um, theyboth had to take time away from
work.
Right?
So it's not just, you know, oneindividual as, you know, a, a
financial contributor to thefamily.
(18:39):
There's so much more to thisproblem of of, of playing
defense that I think you'vegotta have really a whole sub
subset of, of people back thereto keep the football analogy
going a little bit here sincewe're we're in October, and in
the thick of it, you know, wereally gotta make sure that
you've got, you know, yourspecialists out there, the
people who just play on one sideof the field all the time
(19:02):
instead of trying to doeverything.
Imagine I'm a Niners fan, soimagine Brock Purdy playing
cornerback or, or a linebacker.
It's just he's gonna getsteamrolled all day long.
So, um, you know, you see thatstuff and, and you, you want the
right people in the right place.
Absolutely.
Stoy (19:19):
What do you think it is that people misunderstand the
most when it comes to insurance,but also disability in general
of between the cost and theoverall impact?
I know we've hit upon it alittle bit with everything that
we've been mentioning andeverything, but what do you
think's the most understmisunderstood?
Maxwell Schmitz (19:37):
The most misunderstood, I think around
insurance in general.
Is that there's people in suitswho are trying to screw you.
And I think it's something thatI've definitely subscribed to in
my life before I started meetinga lot of these people and sort
of understanding the balancesheets and stuff like that.
So I can, I'm skeptic by nature,cynic by nature, but.
(19:59):
It's one of those things whereif you actually have the
curiosity to take a look atthis, I'd really try to train
people's focus on loss ratioswhere you see that, you know, a
carrier's got a 60% loss ratiomaybe, and that sounds like, oh,
they're profiting 40%, butreally a lot of that is going to
reserves into operations and toall these, paying everybody for
(20:23):
sure.
And there's a CEO making a tonof money, of course.
But it's not just to, you know,polish his statute, right?
This is all about spreading therisk out.
So what a loss ratio is, is, youknow, you take a dollar and if
it's a 60% loss ratio, they'repaying 60 cents of that back out
to people in need, right?
And, and that's what disabilityis, especially.
(20:43):
It's like these are people goingthrough the most difficult stuff
in their life.
And so that's, that's the way Isee it now.
And after paying claims andseeing this firsthand with my
mom, we're seeing this reallykind of.
I, I think that shift is reallyimportant for people to
understand like, Hey, this is,this is a community aspect.
Like insurance is not, it's not,it wasn't invented to screw
(21:06):
people over.
It was actually invented to helpa community out, right?
To, to make sure that peoplewere cared for and that they had
the resources they need to, tohelp their families get through
life with or without them.
I think life insurance is one ofthe first types of insurance
invented for that reason.
And you've got, you know,disability, which has only been
around for a hundred years now,a little more than a hundred
(21:26):
years.
And so that's, that's one ofthose things where, you know, I
think we just forget as asociety that this is really
about taking care of each other.
Um, and similar to that, to thatGoFundMe type of thing.
Right?
You've got this GoFundMementality out there right now in
society.
Where it's like, okay, we allneed to band together and help
each other out.
So this is just, it's more likea prepaid GoFundMe, if you think
(21:48):
about it that way.
Like a subscription basedGoFundMe, if there's kind of
like a specific thing that'sgoing on and you don't have to
petition your community, youjust call up the 800 number and
start a claim or call your agentto help you start the claim.
So, so I think just the, thefocusing on the loss ratio in
the community, when I got reallycurious about that stuff, I
started to really see this forwhat it is, which is like.
(22:10):
We're helping people through themost difficult times in their
life, and I challenge carriersto, to keep that culture, keep
that mindset, and.
Fortunately, I've been blessedto work with some really good
carriers and, and have seen itall come through the right way.
There's been sticking points.
You know, I don't wanna paintjust a perfectly rosy picture
here.
There have been sticking pointsthat almost always falls on the
(22:32):
fact that there wasn't clearcommunication.
And so again, having an agentwho knows those communication
channels is really important.
Come claim time.
Stoy (22:41):
It's a great segue into the next, uh, subject of ours,
and that's actionable steps,right?
So in this one, we want you toprovide what should be their
actionable step that they cantake from this conversation,
right?
We've given a lot.
Um, and so the first one.
Actually, it's the second one onmy list.
However, what you had just said,I think triggers this a little
(23:01):
bit and that is what is onequestion that they should ask
their rep.
Maxwell Schmitz (23:07):
So asking the rep is, you know, do we have a
plan?
What's my, what's my plan?
B?
I think that's, that's reallythe question people need to ask
themselves.
Ask their rep if they, ifthey're working with a financial
advisor already, why hasn't thatbeen addressed, I guess would be
my main question because.
People know if it has or if ithasn't generally.
So asking that, that onequestion, what's my plan, is the
(23:28):
biggest thing.
But I think just to ize it alittle bit more, if somebody's
more DIY, a little morehands-on, or at least they need
to see a little more proofbefore they, before they get to
a point where they're gonnastart asking around about it, I
think it's just helpful tounderstand.
How much of a runway you have.
So an action point could be as,I mean, look at, look at your,
(23:49):
look at what you've got savedup.
You gotta know what you've gotat at some level, right?
You know, if you have a milliondollars saved up and you're
making 200,000 a year, well ifyour income goes south, that
million dollars sounds like agreat start to a retirement
saving.
But that's gonna last you fiveyears if you're using that full
(24:10):
income.
So that, that's just, that'sgonna create a lot of hardship
for you, because then you'regonna have to start from zero
when you get back to it.
Hopefully, you know, you're backto work after five years.
But if it goes beyond that, Imean, your lifestyle is changing
big time.
Um, your family's lifestyle ischanging.
So there's, uh, there's, it'snot hard, it's just math at the
end of the day.
It, and it takes a curiosity andit takes kind of like a.
(24:32):
A little, a little willpower, Ithink, to get people off the
starting line.
But once you go there, you'llfind it's pretty simple to do
the math.
Um, and, you know, so just help.
Do yourself a favor, do yourfamily a favor and, and do, do
some basic math here, and askyour advisor to fact check you
or math check you, or whateveryou want to do there.
But, um, definitely get your repinvolved so that you know, you
(24:54):
can, you can have somebodyworking alongside you to affirm
or tell you otherwise, like,Hey, no, you're good.
Actually, that 60% policythrough work is gonna cover
your.
The vast majority of your needsand you know, you're, you're
steady.
So it, it'll give you a lot of,a lot of, uh, a lot more peace
of mind to have that all figuredout.
Stoy (25:12):
What, give me two specific insurance policies that people
should check before the end ofthis year.
Maxwell Schmitz (25:19):
I mean, life and di stick out the most, to
me.
Health insurance is a given,right?
I think you have to have that tosome extent.
Um, but you know, those three,I, I like to focus on this kind
of group of, of coverages calledfamily benefits because this is,
um, if you, if you think abouthow we, how we.
(25:39):
The vernacular, at least withinthe industry, is like we're
looking at employee benefits andwe're looking at commercial
lines, and we're looking atpersonal lines, but there's
nothing really in that fourthquadrant, the personal lines and
commercial lines.
Of course being property andcasualty coverage, employee
benefits, you are looking atmore life and health type of
coverage.
But that family benefits isreally kind of the missing piece
(26:01):
that a lot of people aren'tfocused on, especially business
owners.
Right.
Family businesses and And Ithink are just.
Number one, you know, as far aswho needs this stuff the most on
a group basis, especiallybecause if you think about
working with your family, theseare all people you care about
for the most part.
Right?
Um, and so that's, you have tomake a really difficult decision
(26:22):
if you, if that person has totake, you know, six months off
to focus on that, you know, latestage cancer diagnosis that came
out of nowhere, you know?
And are you gonna continue topay that person throughout the
full six months?
What if it goes on to a year or24 months?
You have to have some kind ofplan designated for each one of
your employees.
(26:43):
And so you know, whether or notyou're gonna pay them or not is,
is, is good to identify, butthere's a way to transfer that
risk.
Both the risk of, you know,actually coming out of pocket
and paying the person.
You know, you can transfer thatto an insurance company, but you
can also transfer.
The decision, you know, if it'ssomething that's a little bit
more gray area, like, you know,maybe an employee has or a
(27:05):
family business partner hasbipolar or something where it's
just a little bit more, moredifficult for you to kind of
make that call, like, you know,I feel a little uncomfortable
about this.
You can have an an, an insurancecompany go through that process
and medically evaluate whetheror not the claim is legitimate
or not, or, or something, ifthere is a question mark about
(27:26):
that.
So, you know, you don't have tobear all of that as a business
owner.
And I think, you know, it justhelps for to, you know, I, I
just wanna encourage people to,to understand that that's
exactly what these companies arein the business of doing and we,
you can, can help'em get there.
Did I answer the question?
I feel like
Stoy (27:45):
I went, you actually answered both questions because
the next one was about whatentrepreneurs and small
businesses need to be reviewingand thinking about.
So you just bridged them all.
You jumped right in front.
That's fine.
I guess
Maxwell Schmitz (27:54):
that's good.
Stoy (27:56):
Alright, so the last one, and I think this probably is
gonna hit home for a lot ofpeople out there, what is one
move that they should make todayif they don't do anything else?
Listen to anything else we said.
What is that one move you thinkthey need to do today?
For their, for their health orfor their wealth journey and
stuff.
Maxwell Schmitz (28:15):
Oh man.
So the move today, and this ispretty blanket advice, but it's,
it's fully fund your emergencyfund.
Um, it's not by insurance.
It's not, you know, contactsomebody to help you through
this process.
It, it's.
You know, take, make yourselfaccountable to yourself and your
family and make sure that youhave a fully funded emergency
(28:36):
fund.
Six months is what I alwaysrecommend.
Um, you know, you might onlyhave to use three of it if
you've got a 90 day waitingperiod on your disability
insurance policy, but that's thetype of emergency we're talking
about, right?
You need to make sure that you,you guys, you, your family,
everybody can, can be in thesame place from a lifestyle
perspective for six months ifyou're not doing that.
(28:59):
I mean, really encourage you tojust put all your effort into
that.
So yeah, I guess that that's,that's where I'd leave it right
now is just make sure thatyou're, you're fully funding
that emergency fund and, andthat you can weather some storms
if they come your way.
Stoy (29:11):
That's very simple advice, like fund that thing.
Um, and it does a lot of things.
Not only does it help andprotect for.
Shit situations.
Right.
But the mental health side of itand how much freer you are
knowing that no matter reallywhat happens, like, we're good,
we'll figure it out, or we havesix months to figure it out.
That is, that is huge andmassive.
(29:33):
So I, I definitely jump on boardwith.
Today, let's make a plan andlet's start moving on that For
sure.
Maxwell Schmitz (29:40):
I remember, I, I mean, you bring up the
emotional side of it too.
Like, I remember to the daywhere, when that happened for us
and I was like, oh my God, Ifinally felt like that, like
there was some peace.
And as far as what, you know,'cause every, every once in a
while, you know, you'll still,when you're starting a family
and stuff and you just get ahouse and all this stuff.
Life can feel so expensive andso overwhelming, and those bills
(30:03):
just keep on coming.
And, and so you might go overthe credit card or, you know,
whatever balance you've got inthat account or, or what have
you.
And so it's good to just feellike, okay, I can, I can go over
a little bit here and there andI don't have to just like, you
know, just try to continue torecreate the wheel and rewrite
the budget every single month.
So that's, that's a powerfulpoint.
Stoy (30:25):
Yeah, everybody, Hey, you're not alone.
That's what we're doing.
All this whole topics and thecollectives for is the fact that
you are not alone in your life,right?
There are experts who have seena lot.
We've, we have more stories thanyou know, and we're here to
help.
And we understand that A lot ofyou think all of this is a money
decision, and truthfully, it'san emotional decision, right?
(30:48):
And that's why part of thecollective Max is part of it.
Obviously others are, we'refocused about you.
And what matters to you in yourlife?
Not what?
Plan A, plan B, step one.
Step three has taught every oneof us in a book, right?
Your situation in life isdifferent.
So it's insurance season review.
Take the time, reach out if youhave questions, we're here for
(31:10):
you.
Right?
And ultimately, again, it isyour life, your journey, but
you're not alone, max.
Appreciate you.
Maxwell Schmitz (31:18):
Alright, thanks soy.
Black Mammoth (31:33):
The proceeding program was sponsored by Black
Mammoth.
Any awards, rankings, orrecognition by unaffiliated
third parties or publicationsare in no way indicative of the
advisor's future performance orany individual client's
investment success.
No award ranking or recognitionshould be construed as a current
or past endorsement of blackmammoth.
(31:54):
Information regarding specificawards, rankings, or
recognitions is available on theBlack Mammoth website, www.black
mammoth.com.
All investment strategies havethe potential for profit or loss
Investment strategies such asasset allocation,
diversification, or rebalancingdo not assure or guarantee
(32:15):
better performance and cannoteliminate the risk of investment
losses.
There are no guarantees that aportfolio employing these or any
other strategy will outperform aportfolio that does not engage
in such strategies.
This broadcast should not beconstrued by any client or
prospective client as asolicitation to affect or
attempt to affect transactionsand securities or the rendering
(32:38):
of personalized investmentadvice due to various factors
including changing marketconditions.
The information discussed inthis broadcast may no longer be
reflective of current positionsor recommendations.
Information presented isbelieved to be factual and up to
date.
Black mammoth do not guaranteeits accuracy and it should not
be regarded as a completeanalysis of the subjects
(33:00):
discussed.
The tax and the estate planninginformation discussed is general
in nature and is provided forinformational purposes only, and
should not be construed as legalor tax advice.
Listeners should consult anattorney or tax professional
regarding their specific legalor tax situation.
Past performance is notindicative of future results.
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