May 5, 2025 • 56 mins
This week's show is called "Insurance: Are You Covered?" with guest Johnnie Lloyd. Tune in and hear Steve and Johnnie continue their series Right Thinking: Life, Money, Relationships. This week taking a look at how important it is to have a good insurance program in your life. Think you can’t afford it? Think twice as you understand the consequences when something goes really wrong.
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Speaker 1 (00:14):
There must be lies harning brighter somewhere.
Speaker 2 (00:22):
Got to be birs hi.
Speaker 1 (00:26):
In the sky.
Speaker 3 (00:29):
Good morning, welcome to Right Thinking with Steve Copeland. I'm
your host, Steve Copeland, and thank you for tuning in.
Let's have a great day.
Speaker 1 (00:40):
Good morning, everybody, glad to be with you. Well.
Speaker 3 (00:43):
Today's episode two thirty four Right Thinking with Steve Copeland
is very pleased to announced that this week's show is
called Insurance.
Speaker 1 (00:50):
Are You Covered?
Speaker 3 (00:52):
With guests Johnny Lloyd, tun Engineer, Steve and Johnny continue
their series Right Thinking Life, Money Relationships this week, taking
a look at how important it is to have a
good insurance program in your life. Think you can't afford it,
Think twice as you understand the consequences when something goes
really wrong. Good morning, Johnny, thanks for being with us.
Speaker 2 (01:14):
Good morning, Steve.
Speaker 4 (01:15):
I'm excited about the direction we're going to take and
the insight that we're going to provide.
Speaker 3 (01:21):
Well, Johnny, I guess this is the eighth part of
the series that we've done.
Speaker 1 (01:26):
Now let me count them. Let's see one, two, three, four.
I think it's the eighth. I lost track five' six
it's the ninth.
Speaker 3 (01:36):
Johnny, My, how time flies when you're having a good time. Well,
you know, Johnny, I want to go back to the
basics again. Today we're talking about insurance, and a lot
of people don't think a whole lot about insurance because
wherever they're at with their life, it's just something that
it's one of those things, certain things you got to do.
But there's so much more about insurance that a lot
(01:58):
of people aren't thinking about.
Speaker 1 (01:59):
They could really help them have a better light. So
that's my basics.
Speaker 3 (02:04):
Everything we're doing is geared toward just managing your finances,
your money and your finances, you're planning of how it
all fits together. You know, we've covered so many different
things up to today's episode, But the point is what
we really are doing here is we're trying to get
people thinking about things that they might not have been
(02:27):
thinking about, thinking about things.
Speaker 1 (02:29):
That they could do to make it.
Speaker 3 (02:31):
Even better when they get a little more aware, get
more disciplined, and ultimately the tools that we're providing will
help them manage their affairs in a way that all
of a sudden, it's like better, less stress, starting to
see things happen that I didn't think, whatever happened, and
what a wonderful feeling.
Speaker 1 (02:50):
It is. And some of the people that are listening,
you know, they're doing very well.
Speaker 3 (02:55):
They're stable, And I point out almost every week pass
on other people. And that's all we're trying to do
is get it in the forefront of your mind, so
that if you've got a really good program that you
live by in all aspects of your financial life, pass
it on to your children, passing on to your friends,
passing on to people that you know could benefit.
Speaker 1 (03:15):
And that's just all Johnny and I are trying to
do for you.
Speaker 3 (03:18):
If you're a person though that's in the proverbial, trapped
in some kind of a box that you don't think
you can get out of, we are promising you, we
are guaranteeing you that you can. You know, today is
the first day of the rest of your life. I
said that a couple of weeks ago. No matter how
bad your situation is, if you start now, you're going
(03:39):
to have it improve. So let's get back onto that.
And in the next couple of weeks we're going to
go from today insurance. We're going to be talking about medical,
the effect of everything medical that goes on in your life,
health issues, you know, my medical crisises all that stuff,
and some of that will come out today as we
talk about insurance, because health insurance is a key part
(04:02):
of insurance that fits into your medical, uh, your your
health life there. But but Johnny, the last couple of
weeks to the next couple of weeks that we're going
to be getting into, you made a comment last week
that really summed it up beautifully, and I want to
I want to repeat it. In the last ten minutes
of last week's show on debt, you talked about building wealth. See,
(04:25):
that's what we're really trying to do, is they're trying
to get people out of this uh Robin Peter and
pay Paul, which is the name of the show a
couple of weeks ago, hand and mouth kind of stuff
to where you can actually start to understand what what.
Speaker 1 (04:40):
Wealth is for you.
Speaker 3 (04:43):
And so so we're leading into that and hopefully when
people look back over the series, they go, you know,
they really opened up my eyes to a lot of things,
and and I like, I like what Johnny and Steve
brought into my life.
Speaker 1 (04:56):
We hope we can do that for you.
Speaker 3 (04:57):
So without further ado, let's talk about insurance. So, Johnny,
you know in my introduction I ended it with if
you think you can afford it, think twice as you
understand the consequences when something really goes wrong. So what
we really want to focus on is this is not
(05:18):
a seminar in all aspects of insurance. We're going to
talk about a lot of parts of insurance in your life.
We might leave some out. We're not insurance salesman here.
We are make your life better type friends. And so
with that said, again not a seminar, but just try
to open up your eyes to the importance of insurance.
Take a good look at your life to see if
(05:39):
you're properly insured in case something goes wrong in your life. So, Johnny,
let me start off with I'm going to give you
eight or nine, ten types of insurance, and then you
just take it from there as long as you want,
and then we'll see where it goes.
Speaker 1 (05:55):
Are you ready?
Speaker 3 (05:57):
Car, car insurance, motorcycle insurance, boat insurance, health insurance, homeowner's insurance,
umbrella insurance, travel insurance, flood insurance, life insurance, dental insurance,
eye insurance, sports insurance, medicare, medicaid supplemental insurance, prescription insurance,
(06:21):
automobile goes down to standard nonstandard, high risk, uninsured motorists,
full liability collision only. Those are just a few that
come to my mind as I talk about insurance. Johnny,
what are your thoughts on insurance coverages for a person,
single person perhaps and a family person a difference again
(06:46):
between single versus married, young versus old. What are your
thoughts about insurance in a person's life.
Speaker 2 (06:54):
Insurance?
Speaker 4 (06:54):
First of all, you've listed all of those, and there
are so many more because people have pet and insurance
and all that. I did a TikTok this week on
the fact that not having pet insurance, whether it be
in your renter's policy or your homeowner's policy, and you
have this wonderful animal that you absolutely love.
Speaker 2 (07:17):
And part of the family.
Speaker 4 (07:19):
However, if they lash out and beat invite someone, it
could cost you a fortune.
Speaker 2 (07:23):
I could literally I did not know how big it cost.
Speaker 4 (07:26):
So let's talk about the fact of buying insurance versus
what you get.
Speaker 2 (07:32):
And I'm gonna use that example.
Speaker 4 (07:33):
So in my review is said can cost anywhere from
forty on the low end to sixty thousand dollars. If
someone gets bitten by your pet, by your dog, for
an example, so in your renters and you have to
make sure you are covered. Just because you have renters insurance,
(07:53):
you need to know what's in it.
Speaker 2 (07:55):
If you have a pet, make sure your pet is covered.
Speaker 4 (07:58):
If you have homeowners insure and you have a pet,
make sure your pet is insurance insure in it and
cover it in it if something happens with that. So
now that won't cover your pet medical stuff. That's a
different type of insurance.
Speaker 1 (08:14):
Right.
Speaker 4 (08:15):
So my point for saying anything about insurance is this,
when you shift your life, when you step off and
be going from living with someone else, and even before
then moving forward, you need to ensure. Now, what I
tell my clients is this, I have some clients that
(08:37):
recently or have young children, and one just recently had
a baby.
Speaker 2 (08:41):
I said, get the baby life insurance now.
Speaker 4 (08:44):
And so the first thing they said was no, no,
uh uh uh uh. Because sometimes in people's mind, when
you get insurance, it's almost like acting the thing to happen.
It's like you're not going to die because you have
life insurance. Honestly, that's not that your're that's going to happen. However,
when you get a life insurance for a young infant,
(09:06):
then they don't have to work. They will never be
able to be turned down for insurance in their future.
Then let's talk about you have an insurance, especially in
a crisis environment like we're in. There are sometimes when
you end up with certain problems or medical conditions that
you end up having a higher policy premium because of
(09:32):
your history. So when you get insurance when you're all
wonderful and healthy, or when you're very young, insurance can
cost you less money. And that is key to me
because it's about being covered. It's about having an umbrella.
Speaker 2 (09:51):
You're in the rain. Life is rain.
Speaker 4 (09:54):
You need insurance to cover yourself so that, yeah, you
can enjoy the rain out there, but it's not pouring
down on you and you getting wet, okay, because most
people don't have enough money set aside in a bank
account to cover things like that. And then I'll tell
you a couple of personal things. During this pandemic, there
(10:16):
were people that succumbed to it that nobody had any idea.
I mean, they were young, they were older, they whatever
the situation was. There was a couple in specific to
me that people were looking for people to help them
bury the person your family when something like that happens,
(10:36):
the family is already grieving. The last thing you want
your family to be dealing with in the midst of
a great loss is how are we going to put
away or to bury our loved one. They have a
lot of pressure on them already, So you don't want
(11:00):
want that to happen in your family. So, like see
you said earlier, you may be covered, you may have
great insurance, but you know, Bobby, Sue or Sally or whoever,
or Jim may not have any insurance. You can just
get into a casual relationship, I mean talk and you'll
laughing and talking. You can then bring it up. You
(11:20):
can bring up the things we're saying. And did you
know did you know that putting someone in the ground
is expensive? Did you know that it's not taxable, especially
if you're in state in Virginia and other states that
whatever the person gets back is When I say get back,
I'm saying the money that they received from a policy
(11:44):
would cover is not taxable to them on the federal
or the state.
Speaker 2 (11:49):
Did you know them? Did you know?
Speaker 4 (11:51):
If you're married, let's talk about marriage for just a minute, Steve.
If I'm married, so you I mean, this is July.
In June and July, most people are a lot of
people are getting married. Like I told you before, I
had a friend recently, her daughter got married this past weekend, right,
so newlywed, all that love bouncing around in the air.
(12:12):
Can we talk about the fact that you need insurance.
Can we talk about the fact that less than forty
seven percent of most households have insurance. Can we talk
about the fact that if something happens unexpected to either
one of you, if you have a mortgage.
Speaker 2 (12:28):
How was that covered? Right?
Speaker 4 (12:31):
Can we talk about the fact that if you have children,
how are they going.
Speaker 2 (12:35):
To be taken care of if something happens. Can we
talk about how.
Speaker 4 (12:39):
Much debt you may have, So you're you would be
leaving this person that you love with all of these responsibilities,
and you don't want to do that.
Speaker 2 (12:51):
You don't want to leave your husband or your wife
or your significant other.
Speaker 4 (12:56):
You don't want to leave anybody with additional pressure in
the middle of them grieving.
Speaker 2 (13:02):
So just consider that.
Speaker 4 (13:04):
And then I'm gonna say this for especially the military
that may be listening, make sure that your policy that
the military has on you has the right benefactor. I
used to work in that space, and sometimes the women
and men forgot to change when their life changed, they
forgot to change the benefactor on their money. When you
(13:27):
do that, and this is not just for military as everybody,
when you do that, they have no other choice but
to pay who you said to be paid.
Speaker 2 (13:38):
It's not optional. It's not a battle.
Speaker 1 (13:41):
It is.
Speaker 2 (13:42):
I mean, let's Steve know something. I don't know this.
That's not that's not a joke.
Speaker 4 (13:47):
So we had in one case, we had a guy
who was divorced, but he had children. Of course, well
in this case, he had children and his previous wife
ended up with all the resources because he never changed
his paperwork. There was nothing anybody could do.
Speaker 2 (14:06):
Nothing.
Speaker 4 (14:08):
So make sure not only that you have insurance, but
if you already have insurance, make sure the benefactors in
the insurance and you're covered properly. Now I went back
to the scenario with the umbrella. It's great to have umbrella,
but if you have a bunch of holes and cut
(14:30):
marks in the umbrella because you don't have it right,
you still don't get it.
Speaker 2 (14:35):
You still gonna get wet.
Speaker 4 (14:37):
So make sure not only are you protected, but you're
protected based on your current situation today. And what I
tell people is at least once a year, like you
have New Year's resolutions or whatever, look at your likee,
how you're covering your family in that. Look at that
(14:59):
as a renew to Just look at you know.
Speaker 2 (15:02):
Is your wheelwright? Is your insurance coverage?
Speaker 1 (15:05):
Right?
Speaker 4 (15:05):
All of those things, because anytime you're not covered, then
that means that your risk factor is open and your
liability for someone to come in and take things or
to attach things, uh, or to come after things that
(15:29):
you've worked hard for. You don't want that to happen.
Speaker 2 (15:32):
So Steve, I know you have.
Speaker 4 (15:34):
I just opened up Pandora's box with a bunch of stuff,
So bring it.
Speaker 2 (15:38):
Let's bring it in.
Speaker 3 (15:40):
That was a wonderful response to my asking you to
kind of open up the conversation on insurance today. Yeah,
and you know you brought up three right off the
bat head, renters and funeral expense. But you know what, again,
this is not we're not insurance. That was when I'm
stressing that point again. There's a concept that we need
(16:03):
to talk about though that's based on a person's character.
Everything we're talking about is character.
Speaker 1 (16:11):
And maybe that's a value statement. Maybe that's subjective. What
I just said. If a person goes through life not thinking.
Speaker 3 (16:20):
About the well being of their family, if something were
to happen to them, to me, that's poor character, just
because it's a selfishness that I don't think is a
good quality. But here's what I really want to get into.
Everything you said leads me into this. If you look
at what stability is go back to my topic papers
in the first couple episodes of this series, what are
(16:43):
your goals? What are your priorities? Now, not everybody's family oriented.
Some people don't want to have a family. They just
want to go out in life and live it to
the fullest. And you know that's fine. If that's what
they want to do, fine, we're still going to help
you do your budget, make sure that you can can
cover things. But what we're getting at here is this,
(17:03):
there are many many ways that you can take what
your life priorities are and align them with how you
spend your money, and so how you spend your money
on insurance. That's getting kind of into the trenches because
a lot of young people in particular, they can't afford
(17:23):
much insurance, and some people are so concerned about having
plenty of insurance that they might be going overboard for
that phase of their life. And there's a name for
that that's called insurance poor, where you have tons of insurance,
but you're not doing many other things because you're just
too concerned. And you can add to some of it later.
(17:47):
First of all, getting insurance for the infant, getting insurance.
Speaker 1 (17:51):
When you're young.
Speaker 3 (17:52):
The word that you spoke to guaranteed insurability. And I
was given that concept when I was a very young person,
because let me tell you, nobody wants to think it's
going to happen to you. But if you get a
terminal illness, you're unensurable for certain things at that point.
And you know what Johnny and I bring to is
(18:16):
we've got a certain we've got a certain knowledge base
here from experience. We both work and we're both accountants.
We both work and finance our whole careers. But we
go beyond just working and finance. You know, we we
care about people. We do a lot of things outside
of just our career, of course, but we bring a
lot of personal situations that we've gone through. And I'm like, hey,
(18:38):
I'm the poster child for the Qemlinphoma Society Light the Night,
you know, for cancer survivors and people that have been
recently diagnosed with cancer that want to survive.
Speaker 1 (18:48):
But what I want to.
Speaker 3 (18:49):
Tell you is is that I was diagnosed with my
illness right about fifty years old, just in my mid
between fifty and fifty one years old. My birthday is
in July. Was diagnosed in February, I think, before I
turned fifty one, just less than one year earlier, I
(19:10):
took out a million dollar term term life insurance policy.
That was a policy that it was time that I
could finally afford a high coverage because at that point
my kids were at an age where I wanted to
have in case something happened to me. See, let me
just go back to this. This is what we're talking
(19:31):
about here. If you're making good income and you're spending it.
And I gave an example in an early lesson here
that of a person that, hey, I don't want to
think about savings yet, I don't want to think about
investing yet. Well, insurance is probably one of the single
best investments that you can make because the rate of
(19:54):
return is phenomenal. I mean, think about it. A million
dollar life insurance policy. My premium was thirteen hundred dollars
a year level thirteen hundred and forty six dollars a
year for ten years. I took a level term policy
that was very affordable for ten years, but then it
went up dramatically. It went from thirteen hundred and forty
(20:15):
six dollars a year for this flat million dollars. It
didn't have any cash value. We'll talk about that in
a detail in a moment, what cash value is. But
it was just a term policy that basically has a
death benefit. And so I said, you know what, just
like you you said, Johnny, if something were.
Speaker 1 (20:33):
To happen to me at that stage of my life.
Speaker 3 (20:38):
And I were to die, I would want my family
to be able to continue living what they call the
lifestyle that they're accustomed to.
Speaker 1 (20:48):
You don't want them to suffer.
Speaker 3 (20:49):
The loss of a loved one and then all of
a sudden be uprooted from They can't afford to live
in that house anymore, they can't do whatever, their whole
life changes overnight. So what you want want to do
is you want to fund their future if you're not here.
And that's what life insurance is all about. But this
particular policy, it was a million dollar coverage. It was
(21:10):
affordable to me just thirteen hundred about a little over
one hundred dollars one hundred dollars a month, and for
ten years I could afford it. Now, when it got
to the type of policy that was going to cost
ten thousand a year, and then it went up a
little over a thousand dollars a year for the next
eight to ten years. When I kept the policy, that's
(21:30):
very hard to afford. That's one thousand dollars a month,
not one hundred dollars a month. But it's a transition.
The term policy at that stage of your career is
a transition policy to where you're covered without having savings.
If something were to happen to you, the death benefit
kicks in. Look at the ready to return. What if
I had paid on it for say a year, thirteen
(21:51):
hundred dollars, and then I died and my family got
a million dollars. You're not ever going to get a
return like that in any other way, no matter what
you do, even if you bought some kind of technology
stock that went crazy, you know in the first year
or two. Well, the concept, though, is is that you
want to use term insurance to get you through that
(22:12):
period to where you're young and establishing yourself, getting your
first house, maybe whatever gets your career going. But then
you're not going to be able to afford that kind
of coverage. So hopefully you will be able to have
coverage that is what they call convertible to where you
turn it into a policy that has a cash value
in it that you can make a you can pay something,
(22:35):
and as you pay it, the policy after a certain
point in time will give you the death benefit and
it will grow into a savings type of an investment account.
I'm going to talk about that later, but first of all,
I just want you to be thinking as far as
your priorities go.
Speaker 1 (22:54):
Right now.
Speaker 3 (22:55):
Do you care so much about your family, your loved ones,
that if some thing were to happen to you, you
want them to be comfortable at least the best that
you can. And insurance is what that's for. But if
you don't care about that, then hey, I still love you,
but uh, you know, just we'll help you, will help
you budget.
Speaker 1 (23:15):
Your money, but we want you to be thinking about
other people. We really do. Okay, Johnny, let me just
stop on that and throw it.
Speaker 3 (23:22):
Back to you for a minute, because that's you really
got into, you know, the laws, the funeral, the guarantee
and insurability and U that pet insurance concept is that's
gone off the charts the last couple of years with
people that are just loving on their pets and uh
they want to they're like a family member. Uh you
know we buried We buried dogs in a pet cemetery
(23:43):
throughout my whole life because they're family members. Okay, So, Johnny,
I brought up the concept of insurance poor when you
want to talk about that for a moment.
Speaker 4 (23:53):
Yeah, So based on what you talked about as far
as insurance poor is, it sounds like when a person
is in that realm, they may be fearful. So the
question when you're going after too much insurance and not
being able to meet your obligations and commitments.
Speaker 2 (24:18):
And if you haven't seen the previous.
Speaker 4 (24:24):
Show that we did, please go back and look at that.
But the obligations and commitments are the most current requirement.
So if you find yourself in a position where you
have amazing insurance whatever the title number is, because you're
young and you went out for this huge policy, but
(24:44):
you're having problems paying or living your life right now.
And when I say that, please, that doesn't mean taking fifty.
Speaker 2 (24:52):
Thousand trips or anything like that. That's not what I'm saying.
Speaker 4 (24:55):
I'm saying that you having a problem with your rent,
you're having a problem with your utilities.
Speaker 2 (25:01):
Then go back and look at.
Speaker 4 (25:02):
Your insurance coverage and ensure that it is reasonable. So
the way you look at insurance being reasonable, especially for
those who are married on both sides. See, this is
not just about your husband or the bread I'm gonna
called breadwinner have an insurance. It's also about maybe she's
(25:25):
a stay at home mom or he's a stay at
home mom, whoever it is.
Speaker 2 (25:30):
You have to look at both sides of it, right.
Speaker 4 (25:33):
You want to be covered, but you don't want to
be drowned by insurance, you know. So being insurance poor
is not where we're leading you, and it's not what
we recommend. What we are recommending, though, is this is
when you look at whatever your requirements are for your household.
(25:56):
And so when I look at someone who is a
stay at home parent, you would have it, but the
other person is working all the time, right, but you
need some might take care of the kids.
Speaker 2 (26:07):
So have you considered what that would cause.
Speaker 4 (26:10):
Let's say the person stays at home and you don't
have a person coming in and cleaning the house. Does
that mean that you're going to clean the house? Know,
that may mean somebody else is going to come in
and clean. So when you look at it, don't just
look at how much money the person is making on
a monthly or annual basis and try to replace that.
Speaker 2 (26:32):
You can't replace the person. Let's first of.
Speaker 4 (26:35):
All say that we know you cannot replace the person. However,
look at all the things the person is bringing to
the table, Look at how your lifestyle is, look at
that you don't want them to have to move a
Steve alluded to, you don't want your family to have
to pick up and move to a smaller place or
another area because their life has already been disrupted. Then
(27:01):
let's look at the other side. Let's not say it's death.
Let's say it's like it's health.
Speaker 2 (27:07):
He talked about that.
Speaker 4 (27:09):
So some people have insurance and in the middle of
certain diagnoses, they can get a portion of the insurance
for the current time to help deal with that diagnosis. Right,
based on what kind of insurance you have. Then you
look at the fact that what about losing your job.
(27:31):
When I say losing your job, I'm saying you can't work.
So look at liability insurance. It's covered for you not
being able to work. Now I'm not telling you all
this so you can go out and buy a bunch
of insurance.
Speaker 2 (27:45):
Let's start just like.
Speaker 4 (27:46):
We did the budget, just like we did other things.
You want to build an emergency fund, you want to
do all those things that we've brought up. Right, However,
you don't want to be in a situation where you're
not covered.
Speaker 2 (28:00):
And this is the deal.
Speaker 4 (28:00):
Most people look at insurance and say, well, if I
have car insurance.
Speaker 2 (28:04):
I'm okay.
Speaker 4 (28:06):
And then they'll bring down the car insurance to a
point where, let's say you don't have a payment on it.
It's all they do is liability. But are you covered
if somebody's not insured? So just look at all of
those things as possible. And I'm gonna call it this word,
and I hope it connects with people, is look at
(28:28):
your risk versus your reward. Look at the risk factor
that you have and then look at the reward. For
an example, and this may or may not apply if
a person has. And I'm gonna say this, If a
person has a million dollars in the bank and they're
(28:48):
paying let's say one thousand dollars a month on a policy,
if you can leave the million dollars untouched and know
that that is your coverage for insurance.
Speaker 2 (29:00):
Then a person could do that.
Speaker 4 (29:03):
But let me tell you the difference in having whether
it be a house or having an.
Speaker 2 (29:08):
Asset and saying.
Speaker 4 (29:09):
Well, I got them covered because I have this asset
that's going to cover them, or remember, they have to
sell the asset unless it's cash. And if it is cash,
then remember there are ramifications from that. Then the other
thing is again I mentioned that a little bit earlier,
but I don't want you to miss what I said,
is that the money that a person receives from an
(29:32):
insurance death benefit, it's not taxable.
Speaker 2 (29:39):
Did you hear me?
Speaker 4 (29:40):
It is not taxable to the state or either the
federal And I'm saying this from the space perspective that
I am in Virginia.
Speaker 2 (29:50):
I can't tell you about your state. I can tell
you I'm gonna tell you about Virginia. It's not taxable.
Speaker 4 (29:56):
And I'm saying that because that's huge because if somebody
gives somebody or they work and make a million dollars,
they have taxes and all that other stuff connected to it.
So look at that and look at how they get it.
Look at all of those dynamics. And that's why we're
talking about money, because you want to be a great
(30:17):
steward of everything you have. A million dollars is honestly
not a lot of money based on the way you
spend it. A person can get a million dollars today
and be broke tomorrow if they spend a million in
one So it's not just about the it's not just
(30:38):
about the income or the insurance. We're saying, ensure your
brain by learning these principles of financial stewardship and so
that when money comes in or when you make decisions
about how your money goes out, that you do it
(30:58):
from a place. And I'm gonna call it this where
you're sober. And when I say sober, we're not We're
not talking about liquor or anything. We're talking about where
you're not emotionally making decisions that will impact the rest
of your life. Okay, So just think about that and
think about how many years you would like to have
(31:20):
your family taken care of so that they didn't have
to worry about anything but healing from losing whoever has passed.
Think about that, and so again for the people who
are newly with or the people who are married. Don't
cover just one person, cover both people with insurance. Because
(31:45):
I've heard people say, well, I'm not leaving her all
that money, but you love her enough to bring your
money into the household.
Speaker 2 (31:52):
You want to protect it.
Speaker 4 (31:53):
Or I'm not leaving him all that money, but you're
lov him enough to bring your money into the household.
So make sure that he doesn't or she doesn't have
to get married or leave the situation that they can
grieve the loss right where they're at.
Speaker 2 (32:11):
And I don't want to just stay there.
Speaker 4 (32:14):
Let's talk about some other Let's talk about some other insurances,
because it's not just about death, it's about other liability insurance.
Speaker 2 (32:25):
Right, you need.
Speaker 4 (32:26):
Health coverage, I mean, and I'm gonna talk a minute
about car insurance because a lot of times car companies,
and remember we're not insurance agents, but car companies. You
can get a discount for having more than one vehicle covered.
You get a second vehicle, a third vehicle discount.
Speaker 3 (32:47):
Right.
Speaker 4 (32:49):
However, if those people don't live in that household, you
need to make sure your coverage is right because you
just can't put people just because you're chill or whatever.
You just can't put them on your policy and think
it's okay when they don't live that is not their residence.
Speaker 2 (33:07):
Some policies will.
Speaker 4 (33:10):
You can't have a negative impact on your policy if
that is the case. So you have to know what
you have. And I'm not telling you to read the
five thousand pages. I'm telling you to ask questions and
then have and then say, well, where is that in
my policy? And you circle it because the person you're
dealing with should know so that they can identify it.
Speaker 2 (33:30):
So you don't have to read everything. But know what
you need. That's the key. Know what you need. Same
thing as a budget, right, know what you need.
Speaker 4 (33:41):
You need to know what you need and then you
can look at all the extra stuff because it's wonderful
to have the extra but if you don't have the
basic needs, meant there's a problem.
Speaker 2 (33:53):
So just be careful of that. And so Steve, what
do you think about that?
Speaker 1 (33:58):
Oh, you know for not being an agent, you know
your stuff?
Speaker 3 (34:04):
Yeah, so you know you're bringing up an awful lot
of wonderful stuff. Let me go back to the life
insurance just for a second. Put an end on that.
So I bought that term policy and it had a provision
that was called convertible to whole life. And years later,
when I was into my incurable terminal illness, that means
(34:25):
that it's a protracted illness, that there's no cure for it,
and you know, that's a major drain on finances. I
can speak from insurance. I have one that just doesn't
go away. And so eventually I was on the virgual
loser in my house and my lawyer told me something
that I did not know, and this is obscure.
Speaker 1 (34:45):
I hope none of you have a termal illness, and
you got to do this.
Speaker 3 (34:48):
But there's a thing called a life settlement to where
there are companies out there that will we'll take over
the premium. Like that policy got to eighteen thousand dollars
a year, unaffordable for me. I was having, you know,
I just and afford it. I did everything I could
to keep the policy alive. But at one point when
I had a five and a half year diagnosis and
(35:09):
I'm outliving it. Thank God for that, but you know
it's incurable. I went to the doctor just yesterday and
he says, I'm doing just fine right now, but you
never know when it might come back. And so my
family and I we live with the knowledge that, you know,
something might happen to me.
Speaker 1 (35:25):
But I want to make sure that I take care
of my family.
Speaker 3 (35:28):
But bottom line is this life settlement was we got
a broker and there's companies out there that buy insurance policies,
life insurance policies and people that have t o we illnesses,
and there was this big process and long story short,
it took four years to do.
Speaker 1 (35:45):
It won't get into all the details right now.
Speaker 3 (35:47):
But we sold that life insurance policy and it had
that feature that it was convertible to a whole life
where they could just keep making the premiums on it
and then when I die, they are the beneficiary. So
they gave a lump sum to me through my agent,
he got a commission. But that was a major infusion
in my finances that I was able to clear up
(36:09):
an awful lot of debt that I was carrying a
whole lot of different things that I was doing, and
so life insurance can be used like that. And with
that one concept, I had a policy. I have very
few regrets.
Speaker 1 (36:21):
Of my life, Johnny. I mean, I've done a lot wrong,
but I don't kick myself too hard. I just try to.
Speaker 3 (36:26):
Learn and ask for forgiveness. But here's my thing. I
got a policy when I was about thirty four years
old that was just a whole life what they call
it extraordinary life policy. It had a savings component in
it when you made your premium, and it had a
death benefit in it. And I paid on it for
(36:49):
only four years. It was very affordable. It had one
hundred thousand dollars death benefit. I paid on it for
four years and then I couldn't afford payments for.
Speaker 1 (36:59):
A while, I didn't have to make payments.
Speaker 3 (37:01):
The dividends and the policy that they give you self
perpetuated the policy, so that the policy dividends were reinvested
in paying off my term policy. And it gets complicated,
but here's the cliff notes version of it. I paid
on that policy and it created cash value, which means
(37:23):
there was a sum of money cash that I owned
and that would grow and I had to quit making premiums.
But I didn't make a premium on that policy. For
about twelve years, I just let it be dormant, but
it always had a death benefit, and the cash value
didn't grow very much because I wasn't putting my premiums in.
(37:45):
And then at one time I got to where I
could start paying premiums and I paid on it. Had
I paid on that policy all the way back to
when I started at about thirty five years ago, that
policy would be worth four hundred and sixty five thousand dollars.
I checked it just the other day. That policy right
now is worth less than one hundred thousand dollars to me.
But I've had loans against it over the last couple
(38:09):
of years when I've been struggling. And here's the best
thing that I can tell you, if nothing else in
this show on insurance, is this piece of advice that
I've learned in my life. One of my few regrets.
I wish I'd found a way to just pay those
premiums and had that death benefit go up, and the
cash value would have been that kind of money I
(38:31):
could have borrowed against it, and the death benefit kept
getting higher, and I would have got higher and higher,
and my cash value would have been in the hundreds
of thousands of dollars if I'd made my premiums. But
here's here's what that policy did for me. Even though
I didn't pay on it enough. The money that was
built up into that cash value, and there were a
(38:51):
number of years where I did pay premiums. The policy
had a cash value about five six years ago of
one hundred and thirty or so thousand dollars. That's my money,
and the death benefit had risen up also, and so
my estate had money in it that if something were
to happen to me, I had a life insurance policy
that would come back to my family, which would be
(39:13):
a tidy sum of money. When I ran into a
financial crisis several years ago for thepteenth time because of
my illness, I was able to borrow money from my
own policy and not pay premiums and have that policy
still have the death benefit, and you can borrow up
to about ninety five percent of what your cash is
(39:35):
in it because the dividends each year will keep paying
paying the coverage for your death benefit. Too many complications
in this example, but what I'm trying to tell you
is imagine not having credit good enough to consolidate your debts.
That we taught last week. Imagine not having enough credit
to really get the kind of finance that you need
for something. If you've got an insurance policy that has
(39:57):
a cash value in it, and there's different names for these,
whole life, Extraordinary life, universal life. If you've got that
kind of carverage, you don't need to have good credit
to borrow money. It's your money, and they charge interest
on it against your own money, which dilutes the amount
of premium that it's paying on your behalf.
Speaker 1 (40:19):
But the bottom line is it's your money. You're your
own bank.
Speaker 3 (40:23):
You can tap into it anytime you want, up to
a certain amount. It's there for all your emergencies, and
you still have a death benefit. If you have a
loan against your own policy, it comes out of the
death benefit if you die. So if your death benefits
up to one hundred and sixty thousand dollars and you
owe eighty five or ninety thousand, the insurance company pays
(40:44):
off the loan against your policy and the death benefit
is reduced. But do you hear the financial wisdom of
having good life insurance that you know how to use.
I've been able to bar against that policy. When I
sold the one to the life settlement, where I got
a large sum of money. About five years ago, I
(41:04):
paid off the loan on the other policy, so that
I went from having the coverage that now and I
got money for the coverage. I no longer had that coverage,
but I was able to totally restore the other policy
and bring the death benefit up to about one hundred
and eighty thousand dollars at the time. So I'm managing
my finances, I'm looking at my cash flow.
Speaker 1 (41:26):
I do what I can afford. I knew my cash
flow wouldn't.
Speaker 3 (41:29):
Allow me to make full premiums for a period of
time because I had other things that I had to
do because I had medical bills, et cetera.
Speaker 1 (41:36):
But as long as I'm looking.
Speaker 3 (41:37):
At it ahead of time, I can make these determinations.
I didn't want to go off of pay insurance premiums
because it was diluting the death benefit. But at this
stage of my life, my wife and I decided it's
more important to keep the house that we live in
than to worry about how much she's going to get
if I die. And so the good news for me
(41:57):
is that I that I tapped into. You know, I
finally qualified for full Social Security at seventy the maximum amount,
and that's going to provide a decent income for my
wife to supplement whatever else I have in my Statemhen
it comes, we're going to be talking about estate planning,
and we're going to be talking about medicals at great length.
So the health insurance coverage, Johnny, let's defer that to
(42:20):
next week's show and tie that into medicals, because without
adequate health insurance coverage, you're not going to be able
to have all that you need for prescription drugs and
doctor's visits, and your health my deteriorate because you're not
getting proper care because you can't afford it. So Johnny,
let's take the last ten or fifteen minutes to the
show and not go into medical yet. We'll wait till
(42:41):
next week on that night. Okay, I've covered part of
the investment build your wealth component that we're going to
get deep into when we get back into investing in
two weeks.
Speaker 4 (42:52):
Okay, Okay, so I have it's interesting that you brought
that up, because you know how we play off each other.
Two things that really came up when you were talking
about that this is one thing. Sometimes you're in a
situation that that you want to put money aside for
(43:13):
your child to go to school. Right, So, and I'm
just going to do this as a scenario. I'm not
telling you to do this. This is a scenario. This
is a possibility for you to think about when you
talk to an agent and you maybe can do a
two for two for one kind of thing. So if
you did a whole life policy that you could use
(43:38):
that you're that you could use to offset the debt
of school when your child gets older, you would have
a life insurance policy for them, right, and you could
have a possibility they could do a loan against the
life the cash value of the policy and pay for
(43:58):
their school without going into heavy debt.
Speaker 2 (44:03):
That's a two four one, is what I'm telling you.
Speaker 4 (44:06):
So you have this amazing life insurance policy for your
child whole life, though it is very.
Speaker 1 (44:10):
Important a savings component.
Speaker 4 (44:13):
A savings component of it, and then you'll be able
to do that. So just look at that kind of thing.
Speaker 3 (44:20):
Now.
Speaker 4 (44:20):
The other things he brought up I don't want you
to miss is the type of insurance he was talking
about when he talks about Medicare, is a social type
of system, which is insurance still because when you get
to a certain age, the government will cover you and
provide certain benefits because you've worked the thirty five years
(44:41):
or whatever. What the benefits are connected based on what
you've done for social security. So that's a social insurance
type system. So there are some social systems that are
sitting out there for the benefit of everybody that meets
the requirements, and you want to make sure sure that
(45:01):
that is something that you think about when you think
about your long term planning.
Speaker 2 (45:06):
You want to look at everything.
Speaker 4 (45:08):
That is available to you and make the best decisions ever. Now,
I don't know if you heard Steve also say that
he waited to get social Security and he was considering
the potential death benefits, that his wife would get the
highest rate and all of that. He made some decisions, right,
So this is the deal. Remember if you go after
(45:30):
social security as soon as it's available, that there are
situation there are limits as to how much income you
can make. Just keep that in mind and then or
once you go over a number, there are some dynamics
about that. So when you wait and you get the
maximum amouth, there may be a benefit to you, so
(45:50):
always go in and ask the professional. Can I just
give you a word with some ex professionals, people that
are excellent in that space. I'm giving you enough information
to just ask some really good questions.
Speaker 2 (46:05):
That is the intent. We are not teaching insurance.
Speaker 4 (46:07):
We're not teaching you know, telling you what you should
do with life health whatever.
Speaker 2 (46:13):
We're giving you information so.
Speaker 4 (46:15):
That when you go look at your policy, when you
start going out and doing things, that you will jot
down some questions so that you can say, what about this?
Speaker 2 (46:25):
What about this? It's my pet? You know, I have
a dog. I have two dogs.
Speaker 4 (46:28):
You know, all they covered if somebody bite them. And
you said, but but you said, my dog is so cute,
They're not gonna bite anybody. Okay, it only takes one turn,
one time, somebody get bitten in your wrapped I mean,
you know what I'm saying. So that's not about you
paying more for it. It's making sure you're covered. We
want to make sure you're covered. So we're just giving
(46:49):
you information to ask amazing questions to people that are
in this space so you can do what's best for
your life. That's what we're doing here. Were about you.
We value you. We value you building wealth. We don't
want people to come in and take you, know your stuff.
We're giving you information so that you and your items
(47:13):
that you valued and paid for are protected.
Speaker 2 (47:16):
But more than anything, let me say this as I
passed it over to Steve. This is what I'll tell you.
Speaker 4 (47:23):
It's one thing to hear information, it's another thing to
gain knowledge higher level. However, you don't really know know
until you do. You don't really know a thing until
you start doing a thing. A lot of people have knowledge,
(47:45):
and people used to say when I was growing up,
they said knowledge is power, and I'm here to tell
you knowledge is not power.
Speaker 2 (47:53):
You know what's powerful when you.
Speaker 4 (47:56):
Put action with the knowledge you have that when you
are in power, you hear me when you add action.
We're giving you information, we're giving you knowledge. We're giving
you all the stuff that's in our head. However, if
you never act upon it.
Speaker 2 (48:16):
It's not powerful.
Speaker 4 (48:18):
If you never share it with another person, it's not
as powerful. So we want you to share the information.
Speaker 2 (48:26):
We want you to learn it. We want you more.
Speaker 4 (48:29):
Than anything, to make sure that you do what you
need to do to have your best life as you
move forward.
Speaker 2 (48:36):
Steve Johnny.
Speaker 3 (48:39):
There used to be these two guys that they've been
in the newspaper my whole life. Click and Clack, I think,
is who they are, and they're the car guys. Anybody
can ask any question they want advice about something having
to do with the car, fixing, buy and selling whatever
you know. And I feel like you and I are
(48:59):
the final acial version of Click and Claque because because
you know, we're using our expertise, because we care about people,
and we're advised and people to go get somebody that
they can listen to a little bit maybe, And let
me tell you we're going to talk about medical extensively
next next show. But remember this. In medical, you got
(49:21):
to have doctor you can trust. In insurance, you got
to have insurance agents you can trust. Banking, you got
to have a banker that you like working with. I
didn't say trust.
Speaker 1 (49:31):
But you got to have a banker you like working with.
It's a trust your banker too. I'm just joking, but.
Speaker 3 (49:36):
I want to close my part of the show here
with anything that we didn't cover will pick up a
little more next week because it's all interrelated. But I
hope people can see that the tools that we've been
trying to give them for the last seven weeks or so.
Are going to help them make these better decisions. But
I want to focus on one aspect of a population
right now. Young people fancy free, enjoying life, putting off
(50:02):
responsibility as long as they can, which is fine.
Speaker 1 (50:05):
I did it myself, you know.
Speaker 3 (50:07):
But if something happens to you and you get yourself
in debt when you're young, or you make a really
bad decision when you're young, it can haunt you for
a long long time. Johnny, I absolutely love the one
you said about somebody with a life insurance policy and
they forgot to change the beneficiary and the ex wife
(50:27):
gets the money.
Speaker 1 (50:28):
Ooh, that's awful, you.
Speaker 3 (50:30):
Know, the poor wife, the second wife that that didn't
get anything.
Speaker 1 (50:35):
What a shock to her life, you know.
Speaker 3 (50:37):
That's that's the kind of life story that you meet
her one day and she just tells you her story
and talks about how then my husband died and we
had a beautiful life insurance policy, but he hadn't changed
it to me, And then I had to go back
and move back to you know, Ohio, and and and
start all over again.
Speaker 1 (50:57):
And it's been hard. Now we don't want that. But
here's the one thing.
Speaker 3 (51:01):
I know a lot of young people that are struggling
financially because they.
Speaker 1 (51:05):
Don't do budgeting.
Speaker 3 (51:06):
They don't look at their life yet in financial terms,
and they'll go without insurance, they'll go without health insurance,
they'll go out with car insurance. And let me tell you,
if your finances are that poor. And what I find
about this population that I'm speaking to, they're usually very
angry and it's everybody else's fault with their own.
Speaker 1 (51:25):
I can't help it.
Speaker 3 (51:26):
I don't have enough, bunny. I'm just going to have
to not you know, I'll get the policy later. Parents
worry about children like that that aren't making responsible decisions.
But let me tell you, if your finances are bad
for whatever reason, and your car insurance gets canceled and
you don't get it back as quick as possible. After
(51:49):
the first month or two that you don't have it,
you tend to forget about it, and then you'll be saying, well,
you know, I really, you know, nothing's happened yet, you know.
Speaker 1 (51:59):
I mean, I'm not going to get an accent.
Speaker 3 (52:01):
I'm going to be really careful when that person gets
in an accent and they're uninsured, They don't have any insurance,
and it could be a bad accent. First of all,
they lose their car if it's a bad accident, they
don't have a car anymore, they have hard time working,
But they could be into the hundreds of thousands dollars
of liability that they're going to be having to pay
(52:24):
without insurance to the poor family that they might have
injured for years to come, and their future has been
totally sacrificed or destroyed jeopardized because of a rass decision
to where, well, I don't have the money right now,
and you know, I'm not going to get into an accent.
(52:45):
I'm asking everyone that thinks like that, that thinks that
you're invincible, that's not going to happen to you, to
start paying attention to what Johnny and I are trying
to do with this series. We are trying to help
people have a better life through proper financial management of
(53:05):
their affairs and have stability built into what we're talking about.
The whole idea of stability means don't just be out
there not being able to afford basic insurances. One concept
that I want to put out there is you can
get car insurance if you own a home cheaper if
(53:25):
you buy it as a bundle with your homeowner's policy.
So there's so many things to insurance, but the main
one that I'm concentrating on is don't not have the
ones that are any stable minded person has to have.
You're not going to have a mortgage if you don't
have homeowners So that one's going to be forced onto.
(53:47):
But car insurance is a huge one. Medical insurance goes
hand in hand with that. I know so many people
that don't carry medical insurance because they they say they
can't afford it. Well, you can't afford not to. So
Johnny closing comment, then we'll say thank you.
Speaker 4 (54:02):
Okay, So my closing comment is to continue to listen
and hear. And when he was talking about the homeowners
and all that, I just want to reiterate Renner's insurance.
Make sure you have Renner's insurance. Remember the person who
owns the property. Because I'm a property investor, I've protected
my property. It doesn't protect the stuff inside the building.
(54:25):
That's your responsibility. So make sure that you have Renters insurance.
If you rent apartment, whatever, make sure you do that.
And if you have questions to do research. Google is
your friend, but just keep in mind to look a
little bit lower than the first thing on the line
and do some research and ask some great questions. So
(54:46):
we appreciate you and Steve appreciate this format because this
is very powerful and engaging.
Speaker 2 (54:54):
And I hand it over back over to you.
Speaker 1 (54:57):
Thank you, Johnny.
Speaker 3 (54:58):
I haven't I haven't thought to say the last couple
of shows, but you can reach Johnny and I at
rightthink dot org. You you might be listening to the
show through a number of different channels that's out there,
but R I, G H T T H I, n
K dot org, rightthin dot org contact me and you
can say, hey, Steve, no offense, but I'd rather talk
(55:20):
to Johnny.
Speaker 1 (55:21):
Can you get me in touch with Johnny. I'd love
to pass you on to Johnny because she's helped me,
she'll help you well. Johnny. Thanks for today.
Speaker 3 (55:28):
You've brought some wonderful thoughts into the into the equation
here and I look forward to next week where we
talk about medical insurance and and and the need to
have good medical insurance. Well, everybody, have a wonderful week.
Thank you very much, God bless you. Thanks for listening
to Right Thinking with Steve Coper. I'll look forward to
(55:50):
being with you again next week and remember don't quit,
plan ahead, It will get better. God bless you and
have a great week.
There must be lies harning brighter somewhere.
Speaker 2 (00:22):
Got to be birs hi.
Speaker 1 (00:26):
In the sky.
Speaker 3 (00:29):
Good morning, welcome to Right Thinking with Steve Copeland. I'm
your host, Steve Copeland, and thank you for tuning in.
Let's have a great day.
Speaker 1 (00:40):
Good morning, everybody, glad to be with you. Well.
Speaker 3 (00:43):
Today's episode two thirty four Right Thinking with Steve Copeland
is very pleased to announced that this week's show is
called Insurance.
Speaker 1 (00:50):
Are You Covered?
Speaker 3 (00:52):
With guests Johnny Lloyd, tun Engineer, Steve and Johnny continue
their series Right Thinking Life, Money Relationships this week, taking
a look at how important it is to have a
good insurance program in your life. Think you can't afford it,
Think twice as you understand the consequences when something goes
really wrong. Good morning, Johnny, thanks for being with us.
Speaker 2 (01:14):
Good morning, Steve.
Speaker 4 (01:15):
I'm excited about the direction we're going to take and
the insight that we're going to provide.
Speaker 3 (01:21):
Well, Johnny, I guess this is the eighth part of
the series that we've done.
Speaker 1 (01:26):
Now let me count them. Let's see one, two, three, four.
I think it's the eighth. I lost track five' six
it's the ninth.
Speaker 3 (01:36):
Johnny, My, how time flies when you're having a good time. Well,
you know, Johnny, I want to go back to the
basics again. Today we're talking about insurance, and a lot
of people don't think a whole lot about insurance because
wherever they're at with their life, it's just something that
it's one of those things, certain things you got to do.
But there's so much more about insurance that a lot
(01:58):
of people aren't thinking about.
Speaker 1 (01:59):
They could really help them have a better light. So
that's my basics.
Speaker 3 (02:04):
Everything we're doing is geared toward just managing your finances,
your money and your finances, you're planning of how it
all fits together. You know, we've covered so many different
things up to today's episode, But the point is what
we really are doing here is we're trying to get
people thinking about things that they might not have been
(02:27):
thinking about, thinking about things.
Speaker 1 (02:29):
That they could do to make it.
Speaker 3 (02:31):
Even better when they get a little more aware, get
more disciplined, and ultimately the tools that we're providing will
help them manage their affairs in a way that all
of a sudden, it's like better, less stress, starting to
see things happen that I didn't think, whatever happened, and
what a wonderful feeling.
Speaker 1 (02:50):
It is. And some of the people that are listening,
you know, they're doing very well.
Speaker 3 (02:55):
They're stable, And I point out almost every week pass
on other people. And that's all we're trying to do
is get it in the forefront of your mind, so
that if you've got a really good program that you
live by in all aspects of your financial life, pass
it on to your children, passing on to your friends,
passing on to people that you know could benefit.
Speaker 1 (03:15):
And that's just all Johnny and I are trying to
do for you.
Speaker 3 (03:18):
If you're a person though that's in the proverbial, trapped
in some kind of a box that you don't think
you can get out of, we are promising you, we
are guaranteeing you that you can. You know, today is
the first day of the rest of your life. I
said that a couple of weeks ago. No matter how
bad your situation is, if you start now, you're going
(03:39):
to have it improve. So let's get back onto that.
And in the next couple of weeks we're going to
go from today insurance. We're going to be talking about medical,
the effect of everything medical that goes on in your life,
health issues, you know, my medical crisises all that stuff,
and some of that will come out today as we
talk about insurance, because health insurance is a key part
(04:02):
of insurance that fits into your medical, uh, your your
health life there. But but Johnny, the last couple of
weeks to the next couple of weeks that we're going
to be getting into, you made a comment last week
that really summed it up beautifully, and I want to
I want to repeat it. In the last ten minutes
of last week's show on debt, you talked about building wealth. See,
(04:25):
that's what we're really trying to do, is they're trying
to get people out of this uh Robin Peter and
pay Paul, which is the name of the show a
couple of weeks ago, hand and mouth kind of stuff
to where you can actually start to understand what what.
Speaker 1 (04:40):
Wealth is for you.
Speaker 3 (04:43):
And so so we're leading into that and hopefully when
people look back over the series, they go, you know,
they really opened up my eyes to a lot of things,
and and I like, I like what Johnny and Steve
brought into my life.
Speaker 1 (04:56):
We hope we can do that for you.
Speaker 3 (04:57):
So without further ado, let's talk about insurance. So, Johnny,
you know in my introduction I ended it with if
you think you can afford it, think twice as you
understand the consequences when something really goes wrong. So what
we really want to focus on is this is not
(05:18):
a seminar in all aspects of insurance. We're going to
talk about a lot of parts of insurance in your life.
We might leave some out. We're not insurance salesman here.
We are make your life better type friends. And so
with that said, again not a seminar, but just try
to open up your eyes to the importance of insurance.
Take a good look at your life to see if
(05:39):
you're properly insured in case something goes wrong in your life. So, Johnny,
let me start off with I'm going to give you
eight or nine, ten types of insurance, and then you
just take it from there as long as you want,
and then we'll see where it goes.
Speaker 1 (05:55):
Are you ready?
Speaker 3 (05:57):
Car, car insurance, motorcycle insurance, boat insurance, health insurance, homeowner's insurance,
umbrella insurance, travel insurance, flood insurance, life insurance, dental insurance,
eye insurance, sports insurance, medicare, medicaid supplemental insurance, prescription insurance,
(06:21):
automobile goes down to standard nonstandard, high risk, uninsured motorists,
full liability collision only. Those are just a few that
come to my mind as I talk about insurance. Johnny,
what are your thoughts on insurance coverages for a person,
single person perhaps and a family person a difference again
(06:46):
between single versus married, young versus old. What are your
thoughts about insurance in a person's life.
Speaker 2 (06:54):
Insurance?
Speaker 4 (06:54):
First of all, you've listed all of those, and there
are so many more because people have pet and insurance
and all that. I did a TikTok this week on
the fact that not having pet insurance, whether it be
in your renter's policy or your homeowner's policy, and you
have this wonderful animal that you absolutely love.
Speaker 2 (07:17):
And part of the family.
Speaker 4 (07:19):
However, if they lash out and beat invite someone, it
could cost you a fortune.
Speaker 2 (07:23):
I could literally I did not know how big it cost.
Speaker 4 (07:26):
So let's talk about the fact of buying insurance versus
what you get.
Speaker 2 (07:32):
And I'm gonna use that example.
Speaker 4 (07:33):
So in my review is said can cost anywhere from
forty on the low end to sixty thousand dollars. If
someone gets bitten by your pet, by your dog, for
an example, so in your renters and you have to
make sure you are covered. Just because you have renters insurance,
(07:53):
you need to know what's in it.
Speaker 2 (07:55):
If you have a pet, make sure your pet is covered.
Speaker 4 (07:58):
If you have homeowners insure and you have a pet,
make sure your pet is insurance insure in it and
cover it in it if something happens with that. So
now that won't cover your pet medical stuff. That's a
different type of insurance.
Speaker 1 (08:14):
Right.
Speaker 4 (08:15):
So my point for saying anything about insurance is this,
when you shift your life, when you step off and
be going from living with someone else, and even before
then moving forward, you need to ensure. Now, what I
tell my clients is this, I have some clients that
(08:37):
recently or have young children, and one just recently had
a baby.
Speaker 2 (08:41):
I said, get the baby life insurance now.
Speaker 4 (08:44):
And so the first thing they said was no, no,
uh uh uh uh. Because sometimes in people's mind, when
you get insurance, it's almost like acting the thing to happen.
It's like you're not going to die because you have
life insurance. Honestly, that's not that your're that's going to happen. However,
when you get a life insurance for a young infant,
(09:06):
then they don't have to work. They will never be
able to be turned down for insurance in their future.
Then let's talk about you have an insurance, especially in
a crisis environment like we're in. There are sometimes when
you end up with certain problems or medical conditions that
you end up having a higher policy premium because of
(09:32):
your history. So when you get insurance when you're all
wonderful and healthy, or when you're very young, insurance can
cost you less money. And that is key to me
because it's about being covered. It's about having an umbrella.
Speaker 2 (09:51):
You're in the rain. Life is rain.
Speaker 4 (09:54):
You need insurance to cover yourself so that, yeah, you
can enjoy the rain out there, but it's not pouring
down on you and you getting wet, okay, because most
people don't have enough money set aside in a bank
account to cover things like that. And then I'll tell
you a couple of personal things. During this pandemic, there
(10:16):
were people that succumbed to it that nobody had any idea.
I mean, they were young, they were older, they whatever
the situation was. There was a couple in specific to
me that people were looking for people to help them
bury the person your family when something like that happens,
(10:36):
the family is already grieving. The last thing you want
your family to be dealing with in the midst of
a great loss is how are we going to put
away or to bury our loved one. They have a
lot of pressure on them already, So you don't want
(11:00):
want that to happen in your family. So, like see
you said earlier, you may be covered, you may have
great insurance, but you know, Bobby, Sue or Sally or whoever,
or Jim may not have any insurance. You can just
get into a casual relationship, I mean talk and you'll
laughing and talking. You can then bring it up. You
(11:20):
can bring up the things we're saying. And did you
know did you know that putting someone in the ground
is expensive? Did you know that it's not taxable, especially
if you're in state in Virginia and other states that
whatever the person gets back is When I say get back,
I'm saying the money that they received from a policy
(11:44):
would cover is not taxable to them on the federal
or the state.
Speaker 2 (11:49):
Did you know them? Did you know?
Speaker 4 (11:51):
If you're married, let's talk about marriage for just a minute, Steve.
If I'm married, so you I mean, this is July.
In June and July, most people are a lot of
people are getting married. Like I told you before, I
had a friend recently, her daughter got married this past weekend, right,
so newlywed, all that love bouncing around in the air.
(12:12):
Can we talk about the fact that you need insurance.
Can we talk about the fact that less than forty
seven percent of most households have insurance. Can we talk
about the fact that if something happens unexpected to either
one of you, if you have a mortgage.
Speaker 2 (12:28):
How was that covered? Right?
Speaker 4 (12:31):
Can we talk about the fact that if you have children,
how are they going.
Speaker 2 (12:35):
To be taken care of if something happens. Can we
talk about how.
Speaker 4 (12:39):
Much debt you may have, So you're you would be
leaving this person that you love with all of these responsibilities,
and you don't want to do that.
Speaker 2 (12:51):
You don't want to leave your husband or your wife
or your significant other.
Speaker 4 (12:56):
You don't want to leave anybody with additional pressure in
the middle of them grieving.
Speaker 2 (13:02):
So just consider that.
Speaker 4 (13:04):
And then I'm gonna say this for especially the military
that may be listening, make sure that your policy that
the military has on you has the right benefactor. I
used to work in that space, and sometimes the women
and men forgot to change when their life changed, they
forgot to change the benefactor on their money. When you
(13:27):
do that, and this is not just for military as everybody,
when you do that, they have no other choice but
to pay who you said to be paid.
Speaker 2 (13:38):
It's not optional. It's not a battle.
Speaker 1 (13:41):
It is.
Speaker 2 (13:42):
I mean, let's Steve know something. I don't know this.
That's not that's not a joke.
Speaker 4 (13:47):
So we had in one case, we had a guy
who was divorced, but he had children. Of course, well
in this case, he had children and his previous wife
ended up with all the resources because he never changed
his paperwork. There was nothing anybody could do.
Speaker 2 (14:06):
Nothing.
Speaker 4 (14:08):
So make sure not only that you have insurance, but
if you already have insurance, make sure the benefactors in
the insurance and you're covered properly. Now I went back
to the scenario with the umbrella. It's great to have umbrella,
but if you have a bunch of holes and cut
(14:30):
marks in the umbrella because you don't have it right,
you still don't get it.
Speaker 2 (14:35):
You still gonna get wet.
Speaker 4 (14:37):
So make sure not only are you protected, but you're
protected based on your current situation today. And what I
tell people is at least once a year, like you
have New Year's resolutions or whatever, look at your likee,
how you're covering your family in that. Look at that
(14:59):
as a renew to Just look at you know.
Speaker 2 (15:02):
Is your wheelwright? Is your insurance coverage?
Speaker 1 (15:05):
Right?
Speaker 4 (15:05):
All of those things, because anytime you're not covered, then
that means that your risk factor is open and your
liability for someone to come in and take things or
to attach things, uh, or to come after things that
(15:29):
you've worked hard for. You don't want that to happen.
Speaker 2 (15:32):
So Steve, I know you have.
Speaker 4 (15:34):
I just opened up Pandora's box with a bunch of stuff,
So bring it.
Speaker 2 (15:38):
Let's bring it in.
Speaker 3 (15:40):
That was a wonderful response to my asking you to
kind of open up the conversation on insurance today. Yeah,
and you know you brought up three right off the
bat head, renters and funeral expense. But you know what, again,
this is not we're not insurance. That was when I'm
stressing that point again. There's a concept that we need
(16:03):
to talk about though that's based on a person's character.
Everything we're talking about is character.
Speaker 1 (16:11):
And maybe that's a value statement. Maybe that's subjective. What
I just said. If a person goes through life not thinking.
Speaker 3 (16:20):
About the well being of their family, if something were
to happen to them, to me, that's poor character, just
because it's a selfishness that I don't think is a
good quality. But here's what I really want to get into.
Everything you said leads me into this. If you look
at what stability is go back to my topic papers
in the first couple episodes of this series, what are
(16:43):
your goals? What are your priorities? Now, not everybody's family oriented.
Some people don't want to have a family. They just
want to go out in life and live it to
the fullest. And you know that's fine. If that's what
they want to do, fine, we're still going to help
you do your budget, make sure that you can can
cover things. But what we're getting at here is this,
(17:03):
there are many many ways that you can take what
your life priorities are and align them with how you
spend your money, and so how you spend your money
on insurance. That's getting kind of into the trenches because
a lot of young people in particular, they can't afford
(17:23):
much insurance, and some people are so concerned about having
plenty of insurance that they might be going overboard for
that phase of their life. And there's a name for
that that's called insurance poor, where you have tons of insurance,
but you're not doing many other things because you're just
too concerned. And you can add to some of it later.
(17:47):
First of all, getting insurance for the infant, getting insurance.
Speaker 1 (17:51):
When you're young.
Speaker 3 (17:52):
The word that you spoke to guaranteed insurability. And I
was given that concept when I was a very young person,
because let me tell you, nobody wants to think it's
going to happen to you. But if you get a
terminal illness, you're unensurable for certain things at that point.
And you know what Johnny and I bring to is
(18:16):
we've got a certain we've got a certain knowledge base
here from experience. We both work and we're both accountants.
We both work and finance our whole careers. But we
go beyond just working and finance. You know, we we
care about people. We do a lot of things outside
of just our career, of course, but we bring a
lot of personal situations that we've gone through. And I'm like, hey,
(18:38):
I'm the poster child for the Qemlinphoma Society Light the Night,
you know, for cancer survivors and people that have been
recently diagnosed with cancer that want to survive.
Speaker 1 (18:48):
But what I want to.
Speaker 3 (18:49):
Tell you is is that I was diagnosed with my
illness right about fifty years old, just in my mid
between fifty and fifty one years old. My birthday is
in July. Was diagnosed in February, I think, before I
turned fifty one, just less than one year earlier, I
(19:10):
took out a million dollar term term life insurance policy.
That was a policy that it was time that I
could finally afford a high coverage because at that point
my kids were at an age where I wanted to
have in case something happened to me. See, let me
just go back to this. This is what we're talking
(19:31):
about here. If you're making good income and you're spending it.
And I gave an example in an early lesson here
that of a person that, hey, I don't want to
think about savings yet, I don't want to think about
investing yet. Well, insurance is probably one of the single
best investments that you can make because the rate of
(19:54):
return is phenomenal. I mean, think about it. A million
dollar life insurance policy. My premium was thirteen hundred dollars
a year level thirteen hundred and forty six dollars a
year for ten years. I took a level term policy
that was very affordable for ten years, but then it
went up dramatically. It went from thirteen hundred and forty
(20:15):
six dollars a year for this flat million dollars. It
didn't have any cash value. We'll talk about that in
a detail in a moment, what cash value is. But
it was just a term policy that basically has a
death benefit. And so I said, you know what, just
like you you said, Johnny, if something were.
Speaker 1 (20:33):
To happen to me at that stage of my life.
Speaker 3 (20:38):
And I were to die, I would want my family
to be able to continue living what they call the
lifestyle that they're accustomed to.
Speaker 1 (20:48):
You don't want them to suffer.
Speaker 3 (20:49):
The loss of a loved one and then all of
a sudden be uprooted from They can't afford to live
in that house anymore, they can't do whatever, their whole
life changes overnight. So what you want want to do
is you want to fund their future if you're not here.
And that's what life insurance is all about. But this
particular policy, it was a million dollar coverage. It was
(21:10):
affordable to me just thirteen hundred about a little over
one hundred dollars one hundred dollars a month, and for
ten years I could afford it. Now, when it got
to the type of policy that was going to cost
ten thousand a year, and then it went up a
little over a thousand dollars a year for the next
eight to ten years. When I kept the policy, that's
(21:30):
very hard to afford. That's one thousand dollars a month,
not one hundred dollars a month. But it's a transition.
The term policy at that stage of your career is
a transition policy to where you're covered without having savings.
If something were to happen to you, the death benefit
kicks in. Look at the ready to return. What if
I had paid on it for say a year, thirteen
(21:51):
hundred dollars, and then I died and my family got
a million dollars. You're not ever going to get a
return like that in any other way, no matter what
you do, even if you bought some kind of technology
stock that went crazy, you know in the first year
or two. Well, the concept, though, is is that you
want to use term insurance to get you through that
(22:12):
period to where you're young and establishing yourself, getting your
first house, maybe whatever gets your career going. But then
you're not going to be able to afford that kind
of coverage. So hopefully you will be able to have
coverage that is what they call convertible to where you
turn it into a policy that has a cash value
in it that you can make a you can pay something,
(22:35):
and as you pay it, the policy after a certain
point in time will give you the death benefit and
it will grow into a savings type of an investment account.
I'm going to talk about that later, but first of all,
I just want you to be thinking as far as
your priorities go.
Speaker 1 (22:54):
Right now.
Speaker 3 (22:55):
Do you care so much about your family, your loved ones,
that if some thing were to happen to you, you
want them to be comfortable at least the best that
you can. And insurance is what that's for. But if
you don't care about that, then hey, I still love you,
but uh, you know, just we'll help you, will help
you budget.
Speaker 1 (23:15):
Your money, but we want you to be thinking about
other people. We really do. Okay, Johnny, let me just
stop on that and throw it.
Speaker 3 (23:22):
Back to you for a minute, because that's you really
got into, you know, the laws, the funeral, the guarantee
and insurability and U that pet insurance concept is that's
gone off the charts the last couple of years with
people that are just loving on their pets and uh
they want to they're like a family member. Uh you
know we buried We buried dogs in a pet cemetery
(23:43):
throughout my whole life because they're family members. Okay, So, Johnny,
I brought up the concept of insurance poor when you
want to talk about that for a moment.
Speaker 4 (23:53):
Yeah, So based on what you talked about as far
as insurance poor is, it sounds like when a person
is in that realm, they may be fearful. So the
question when you're going after too much insurance and not
being able to meet your obligations and commitments.
Speaker 2 (24:18):
And if you haven't seen the previous.
Speaker 4 (24:24):
Show that we did, please go back and look at that.
But the obligations and commitments are the most current requirement.
So if you find yourself in a position where you
have amazing insurance whatever the title number is, because you're
young and you went out for this huge policy, but
(24:44):
you're having problems paying or living your life right now.
And when I say that, please, that doesn't mean taking fifty.
Speaker 2 (24:52):
Thousand trips or anything like that. That's not what I'm saying.
Speaker 4 (24:55):
I'm saying that you having a problem with your rent,
you're having a problem with your utilities.
Speaker 2 (25:01):
Then go back and look at.
Speaker 4 (25:02):
Your insurance coverage and ensure that it is reasonable. So
the way you look at insurance being reasonable, especially for
those who are married on both sides. See, this is
not just about your husband or the bread I'm gonna
called breadwinner have an insurance. It's also about maybe she's
(25:25):
a stay at home mom or he's a stay at
home mom, whoever it is.
Speaker 2 (25:30):
You have to look at both sides of it, right.
Speaker 4 (25:33):
You want to be covered, but you don't want to
be drowned by insurance, you know. So being insurance poor
is not where we're leading you, and it's not what
we recommend. What we are recommending, though, is this is
when you look at whatever your requirements are for your household.
(25:56):
And so when I look at someone who is a
stay at home parent, you would have it, but the
other person is working all the time, right, but you
need some might take care of the kids.
Speaker 2 (26:07):
So have you considered what that would cause.
Speaker 4 (26:10):
Let's say the person stays at home and you don't
have a person coming in and cleaning the house. Does
that mean that you're going to clean the house? Know,
that may mean somebody else is going to come in
and clean. So when you look at it, don't just
look at how much money the person is making on
a monthly or annual basis and try to replace that.
Speaker 2 (26:32):
You can't replace the person. Let's first of.
Speaker 4 (26:35):
All say that we know you cannot replace the person. However,
look at all the things the person is bringing to
the table, Look at how your lifestyle is, look at
that you don't want them to have to move a
Steve alluded to, you don't want your family to have
to pick up and move to a smaller place or
another area because their life has already been disrupted. Then
(27:01):
let's look at the other side. Let's not say it's death.
Let's say it's like it's health.
Speaker 2 (27:07):
He talked about that.
Speaker 4 (27:09):
So some people have insurance and in the middle of
certain diagnoses, they can get a portion of the insurance
for the current time to help deal with that diagnosis. Right,
based on what kind of insurance you have. Then you
look at the fact that what about losing your job.
(27:31):
When I say losing your job, I'm saying you can't work.
So look at liability insurance. It's covered for you not
being able to work. Now I'm not telling you all
this so you can go out and buy a bunch
of insurance.
Speaker 2 (27:45):
Let's start just like.
Speaker 4 (27:46):
We did the budget, just like we did other things.
You want to build an emergency fund, you want to
do all those things that we've brought up. Right, However,
you don't want to be in a situation where you're
not covered.
Speaker 2 (28:00):
And this is the deal.
Speaker 4 (28:00):
Most people look at insurance and say, well, if I
have car insurance.
Speaker 2 (28:04):
I'm okay.
Speaker 4 (28:06):
And then they'll bring down the car insurance to a
point where, let's say you don't have a payment on it.
It's all they do is liability. But are you covered
if somebody's not insured? So just look at all of
those things as possible. And I'm gonna call it this word,
and I hope it connects with people, is look at
(28:28):
your risk versus your reward. Look at the risk factor
that you have and then look at the reward. For
an example, and this may or may not apply if
a person has. And I'm gonna say this, If a
person has a million dollars in the bank and they're
(28:48):
paying let's say one thousand dollars a month on a policy,
if you can leave the million dollars untouched and know
that that is your coverage for insurance.
Speaker 2 (29:00):
Then a person could do that.
Speaker 4 (29:03):
But let me tell you the difference in having whether
it be a house or having an.
Speaker 2 (29:08):
Asset and saying.
Speaker 4 (29:09):
Well, I got them covered because I have this asset
that's going to cover them, or remember, they have to
sell the asset unless it's cash. And if it is cash,
then remember there are ramifications from that. Then the other
thing is again I mentioned that a little bit earlier,
but I don't want you to miss what I said,
is that the money that a person receives from an
(29:32):
insurance death benefit, it's not taxable.
Speaker 2 (29:39):
Did you hear me?
Speaker 4 (29:40):
It is not taxable to the state or either the
federal And I'm saying this from the space perspective that
I am in Virginia.
Speaker 2 (29:50):
I can't tell you about your state. I can tell
you I'm gonna tell you about Virginia. It's not taxable.
Speaker 4 (29:56):
And I'm saying that because that's huge because if somebody
gives somebody or they work and make a million dollars,
they have taxes and all that other stuff connected to it.
So look at that and look at how they get it.
Look at all of those dynamics. And that's why we're
talking about money, because you want to be a great
(30:17):
steward of everything you have. A million dollars is honestly
not a lot of money based on the way you
spend it. A person can get a million dollars today
and be broke tomorrow if they spend a million in
one So it's not just about the it's not just
(30:38):
about the income or the insurance. We're saying, ensure your
brain by learning these principles of financial stewardship and so
that when money comes in or when you make decisions
about how your money goes out, that you do it
(30:58):
from a place. And I'm gonna call it this where
you're sober. And when I say sober, we're not We're
not talking about liquor or anything. We're talking about where
you're not emotionally making decisions that will impact the rest
of your life. Okay, So just think about that and
think about how many years you would like to have
(31:20):
your family taken care of so that they didn't have
to worry about anything but healing from losing whoever has passed.
Think about that, and so again for the people who
are newly with or the people who are married. Don't
cover just one person, cover both people with insurance. Because
(31:45):
I've heard people say, well, I'm not leaving her all
that money, but you love her enough to bring your
money into the household.
Speaker 2 (31:52):
You want to protect it.
Speaker 4 (31:53):
Or I'm not leaving him all that money, but you're
lov him enough to bring your money into the household.
So make sure that he doesn't or she doesn't have
to get married or leave the situation that they can
grieve the loss right where they're at.
Speaker 2 (32:11):
And I don't want to just stay there.
Speaker 4 (32:14):
Let's talk about some other Let's talk about some other insurances,
because it's not just about death, it's about other liability insurance.
Speaker 2 (32:25):
Right, you need.
Speaker 4 (32:26):
Health coverage, I mean, and I'm gonna talk a minute
about car insurance because a lot of times car companies,
and remember we're not insurance agents, but car companies. You
can get a discount for having more than one vehicle covered.
You get a second vehicle, a third vehicle discount.
Speaker 3 (32:47):
Right.
Speaker 4 (32:49):
However, if those people don't live in that household, you
need to make sure your coverage is right because you
just can't put people just because you're chill or whatever.
You just can't put them on your policy and think
it's okay when they don't live that is not their residence.
Speaker 2 (33:07):
Some policies will.
Speaker 4 (33:10):
You can't have a negative impact on your policy if
that is the case. So you have to know what
you have. And I'm not telling you to read the
five thousand pages. I'm telling you to ask questions and
then have and then say, well, where is that in
my policy? And you circle it because the person you're
dealing with should know so that they can identify it.
Speaker 2 (33:30):
So you don't have to read everything. But know what
you need. That's the key. Know what you need. Same
thing as a budget, right, know what you need.
Speaker 4 (33:41):
You need to know what you need and then you
can look at all the extra stuff because it's wonderful
to have the extra but if you don't have the
basic needs, meant there's a problem.
Speaker 2 (33:53):
So just be careful of that. And so Steve, what
do you think about that?
Speaker 1 (33:58):
Oh, you know for not being an agent, you know
your stuff?
Speaker 3 (34:04):
Yeah, so you know you're bringing up an awful lot
of wonderful stuff. Let me go back to the life
insurance just for a second. Put an end on that.
So I bought that term policy and it had a provision
that was called convertible to whole life. And years later,
when I was into my incurable terminal illness, that means
(34:25):
that it's a protracted illness, that there's no cure for it,
and you know, that's a major drain on finances. I
can speak from insurance. I have one that just doesn't
go away. And so eventually I was on the virgual
loser in my house and my lawyer told me something
that I did not know, and this is obscure.
Speaker 1 (34:45):
I hope none of you have a termal illness, and
you got to do this.
Speaker 3 (34:48):
But there's a thing called a life settlement to where
there are companies out there that will we'll take over
the premium. Like that policy got to eighteen thousand dollars
a year, unaffordable for me. I was having, you know,
I just and afford it. I did everything I could
to keep the policy alive. But at one point when
I had a five and a half year diagnosis and
(35:09):
I'm outliving it. Thank God for that, but you know
it's incurable. I went to the doctor just yesterday and
he says, I'm doing just fine right now, but you
never know when it might come back. And so my
family and I we live with the knowledge that, you know,
something might happen to me.
Speaker 1 (35:25):
But I want to make sure that I take care
of my family.
Speaker 3 (35:28):
But bottom line is this life settlement was we got
a broker and there's companies out there that buy insurance policies,
life insurance policies and people that have t o we illnesses,
and there was this big process and long story short,
it took four years to do.
Speaker 1 (35:45):
It won't get into all the details right now.
Speaker 3 (35:47):
But we sold that life insurance policy and it had
that feature that it was convertible to a whole life
where they could just keep making the premiums on it
and then when I die, they are the beneficiary. So
they gave a lump sum to me through my agent,
he got a commission. But that was a major infusion
in my finances that I was able to clear up
(36:09):
an awful lot of debt that I was carrying a
whole lot of different things that I was doing, and
so life insurance can be used like that. And with
that one concept, I had a policy. I have very
few regrets.
Speaker 1 (36:21):
Of my life, Johnny. I mean, I've done a lot wrong,
but I don't kick myself too hard. I just try to.
Speaker 3 (36:26):
Learn and ask for forgiveness. But here's my thing. I
got a policy when I was about thirty four years
old that was just a whole life what they call
it extraordinary life policy. It had a savings component in
it when you made your premium, and it had a
death benefit in it. And I paid on it for
(36:49):
only four years. It was very affordable. It had one
hundred thousand dollars death benefit. I paid on it for
four years and then I couldn't afford payments for.
Speaker 1 (36:59):
A while, I didn't have to make payments.
Speaker 3 (37:01):
The dividends and the policy that they give you self
perpetuated the policy, so that the policy dividends were reinvested
in paying off my term policy. And it gets complicated,
but here's the cliff notes version of it. I paid
on that policy and it created cash value, which means
(37:23):
there was a sum of money cash that I owned
and that would grow and I had to quit making premiums.
But I didn't make a premium on that policy. For
about twelve years, I just let it be dormant, but
it always had a death benefit, and the cash value
didn't grow very much because I wasn't putting my premiums in.
(37:45):
And then at one time I got to where I
could start paying premiums and I paid on it. Had
I paid on that policy all the way back to
when I started at about thirty five years ago, that
policy would be worth four hundred and sixty five thousand dollars.
I checked it just the other day. That policy right
now is worth less than one hundred thousand dollars to me.
But I've had loans against it over the last couple
(38:09):
of years when I've been struggling. And here's the best
thing that I can tell you, if nothing else in
this show on insurance, is this piece of advice that
I've learned in my life. One of my few regrets.
I wish I'd found a way to just pay those
premiums and had that death benefit go up, and the
cash value would have been that kind of money I
(38:31):
could have borrowed against it, and the death benefit kept
getting higher, and I would have got higher and higher,
and my cash value would have been in the hundreds
of thousands of dollars if I'd made my premiums. But
here's here's what that policy did for me. Even though
I didn't pay on it enough. The money that was
built up into that cash value, and there were a
(38:51):
number of years where I did pay premiums. The policy
had a cash value about five six years ago of
one hundred and thirty or so thousand dollars. That's my money,
and the death benefit had risen up also, and so
my estate had money in it that if something were
to happen to me, I had a life insurance policy
that would come back to my family, which would be
(39:13):
a tidy sum of money. When I ran into a
financial crisis several years ago for thepteenth time because of
my illness, I was able to borrow money from my
own policy and not pay premiums and have that policy
still have the death benefit, and you can borrow up
to about ninety five percent of what your cash is
(39:35):
in it because the dividends each year will keep paying
paying the coverage for your death benefit. Too many complications
in this example, but what I'm trying to tell you
is imagine not having credit good enough to consolidate your debts.
That we taught last week. Imagine not having enough credit
to really get the kind of finance that you need
for something. If you've got an insurance policy that has
(39:57):
a cash value in it, and there's different names for these,
whole life, Extraordinary life, universal life. If you've got that
kind of carverage, you don't need to have good credit
to borrow money. It's your money, and they charge interest
on it against your own money, which dilutes the amount
of premium that it's paying on your behalf.
Speaker 1 (40:19):
But the bottom line is it's your money. You're your
own bank.
Speaker 3 (40:23):
You can tap into it anytime you want, up to
a certain amount. It's there for all your emergencies, and
you still have a death benefit. If you have a
loan against your own policy, it comes out of the
death benefit if you die. So if your death benefits
up to one hundred and sixty thousand dollars and you
owe eighty five or ninety thousand, the insurance company pays
(40:44):
off the loan against your policy and the death benefit
is reduced. But do you hear the financial wisdom of
having good life insurance that you know how to use.
I've been able to bar against that policy. When I
sold the one to the life settlement, where I got
a large sum of money. About five years ago, I
(41:04):
paid off the loan on the other policy, so that
I went from having the coverage that now and I
got money for the coverage. I no longer had that coverage,
but I was able to totally restore the other policy
and bring the death benefit up to about one hundred
and eighty thousand dollars at the time. So I'm managing
my finances, I'm looking at my cash flow.
Speaker 1 (41:26):
I do what I can afford. I knew my cash
flow wouldn't.
Speaker 3 (41:29):
Allow me to make full premiums for a period of
time because I had other things that I had to
do because I had medical bills, et cetera.
Speaker 1 (41:36):
But as long as I'm looking.
Speaker 3 (41:37):
At it ahead of time, I can make these determinations.
I didn't want to go off of pay insurance premiums
because it was diluting the death benefit. But at this
stage of my life, my wife and I decided it's
more important to keep the house that we live in
than to worry about how much she's going to get
if I die. And so the good news for me
(41:57):
is that I that I tapped into. You know, I
finally qualified for full Social Security at seventy the maximum amount,
and that's going to provide a decent income for my
wife to supplement whatever else I have in my Statemhen
it comes, we're going to be talking about estate planning,
and we're going to be talking about medicals at great length.
So the health insurance coverage, Johnny, let's defer that to
(42:20):
next week's show and tie that into medicals, because without
adequate health insurance coverage, you're not going to be able
to have all that you need for prescription drugs and
doctor's visits, and your health my deteriorate because you're not
getting proper care because you can't afford it. So Johnny,
let's take the last ten or fifteen minutes to the
show and not go into medical yet. We'll wait till
(42:41):
next week on that night. Okay, I've covered part of
the investment build your wealth component that we're going to
get deep into when we get back into investing in
two weeks.
Speaker 4 (42:52):
Okay, Okay, so I have it's interesting that you brought
that up, because you know how we play off each other.
Two things that really came up when you were talking
about that this is one thing. Sometimes you're in a
situation that that you want to put money aside for
(43:13):
your child to go to school. Right, So, and I'm
just going to do this as a scenario. I'm not
telling you to do this. This is a scenario. This
is a possibility for you to think about when you
talk to an agent and you maybe can do a
two for two for one kind of thing. So if
you did a whole life policy that you could use
(43:38):
that you're that you could use to offset the debt
of school when your child gets older, you would have
a life insurance policy for them, right, and you could
have a possibility they could do a loan against the
life the cash value of the policy and pay for
(43:58):
their school without going into heavy debt.
Speaker 2 (44:03):
That's a two four one, is what I'm telling you.
Speaker 4 (44:06):
So you have this amazing life insurance policy for your
child whole life, though it is very.
Speaker 1 (44:10):
Important a savings component.
Speaker 4 (44:13):
A savings component of it, and then you'll be able
to do that. So just look at that kind of thing.
Speaker 3 (44:20):
Now.
Speaker 4 (44:20):
The other things he brought up I don't want you
to miss is the type of insurance he was talking
about when he talks about Medicare, is a social type
of system, which is insurance still because when you get
to a certain age, the government will cover you and
provide certain benefits because you've worked the thirty five years
(44:41):
or whatever. What the benefits are connected based on what
you've done for social security. So that's a social insurance
type system. So there are some social systems that are
sitting out there for the benefit of everybody that meets
the requirements, and you want to make sure sure that
(45:01):
that is something that you think about when you think
about your long term planning.
Speaker 2 (45:06):
You want to look at everything.
Speaker 4 (45:08):
That is available to you and make the best decisions ever. Now,
I don't know if you heard Steve also say that
he waited to get social Security and he was considering
the potential death benefits, that his wife would get the
highest rate and all of that. He made some decisions, right,
So this is the deal. Remember if you go after
(45:30):
social security as soon as it's available, that there are
situation there are limits as to how much income you
can make. Just keep that in mind and then or
once you go over a number, there are some dynamics
about that. So when you wait and you get the
maximum amouth, there may be a benefit to you, so
(45:50):
always go in and ask the professional. Can I just
give you a word with some ex professionals, people that
are excellent in that space. I'm giving you enough information
to just ask some really good questions.
Speaker 2 (46:05):
That is the intent. We are not teaching insurance.
Speaker 4 (46:07):
We're not teaching you know, telling you what you should
do with life health whatever.
Speaker 2 (46:13):
We're giving you information so.
Speaker 4 (46:15):
That when you go look at your policy, when you
start going out and doing things, that you will jot
down some questions so that you can say, what about this?
Speaker 2 (46:25):
What about this? It's my pet? You know, I have
a dog. I have two dogs.
Speaker 4 (46:28):
You know, all they covered if somebody bite them. And
you said, but but you said, my dog is so cute,
They're not gonna bite anybody. Okay, it only takes one turn,
one time, somebody get bitten in your wrapped I mean,
you know what I'm saying. So that's not about you
paying more for it. It's making sure you're covered. We
want to make sure you're covered. So we're just giving
(46:49):
you information to ask amazing questions to people that are
in this space so you can do what's best for
your life. That's what we're doing here. Were about you.
We value you. We value you building wealth. We don't
want people to come in and take you, know your stuff.
We're giving you information so that you and your items
(47:13):
that you valued and paid for are protected.
Speaker 2 (47:16):
But more than anything, let me say this as I
passed it over to Steve. This is what I'll tell you.
Speaker 4 (47:23):
It's one thing to hear information, it's another thing to
gain knowledge higher level. However, you don't really know know
until you do. You don't really know a thing until
you start doing a thing. A lot of people have knowledge,
(47:45):
and people used to say when I was growing up,
they said knowledge is power, and I'm here to tell
you knowledge is not power.
Speaker 2 (47:53):
You know what's powerful when you.
Speaker 4 (47:56):
Put action with the knowledge you have that when you
are in power, you hear me when you add action.
We're giving you information, we're giving you knowledge. We're giving
you all the stuff that's in our head. However, if
you never act upon it.
Speaker 2 (48:16):
It's not powerful.
Speaker 4 (48:18):
If you never share it with another person, it's not
as powerful. So we want you to share the information.
Speaker 2 (48:26):
We want you to learn it. We want you more.
Speaker 4 (48:29):
Than anything, to make sure that you do what you
need to do to have your best life as you
move forward.
Speaker 2 (48:36):
Steve Johnny.
Speaker 3 (48:39):
There used to be these two guys that they've been
in the newspaper my whole life. Click and Clack, I think,
is who they are, and they're the car guys. Anybody
can ask any question they want advice about something having
to do with the car, fixing, buy and selling whatever
you know. And I feel like you and I are
(48:59):
the final acial version of Click and Claque because because
you know, we're using our expertise, because we care about people,
and we're advised and people to go get somebody that
they can listen to a little bit maybe, And let
me tell you we're going to talk about medical extensively
next next show. But remember this. In medical, you got
(49:21):
to have doctor you can trust. In insurance, you got
to have insurance agents you can trust. Banking, you got
to have a banker that you like working with. I
didn't say trust.
Speaker 1 (49:31):
But you got to have a banker you like working with.
It's a trust your banker too. I'm just joking, but.
Speaker 3 (49:36):
I want to close my part of the show here
with anything that we didn't cover will pick up a
little more next week because it's all interrelated. But I
hope people can see that the tools that we've been
trying to give them for the last seven weeks or so.
Are going to help them make these better decisions. But
I want to focus on one aspect of a population
right now. Young people fancy free, enjoying life, putting off
(50:02):
responsibility as long as they can, which is fine.
Speaker 1 (50:05):
I did it myself, you know.
Speaker 3 (50:07):
But if something happens to you and you get yourself
in debt when you're young, or you make a really
bad decision when you're young, it can haunt you for
a long long time. Johnny, I absolutely love the one
you said about somebody with a life insurance policy and
they forgot to change the beneficiary and the ex wife
(50:27):
gets the money.
Speaker 1 (50:28):
Ooh, that's awful, you.
Speaker 3 (50:30):
Know, the poor wife, the second wife that that didn't
get anything.
Speaker 1 (50:35):
What a shock to her life, you know.
Speaker 3 (50:37):
That's that's the kind of life story that you meet
her one day and she just tells you her story
and talks about how then my husband died and we
had a beautiful life insurance policy, but he hadn't changed
it to me, And then I had to go back
and move back to you know, Ohio, and and and
start all over again.
Speaker 1 (50:57):
And it's been hard. Now we don't want that. But
here's the one thing.
Speaker 3 (51:01):
I know a lot of young people that are struggling
financially because they.
Speaker 1 (51:05):
Don't do budgeting.
Speaker 3 (51:06):
They don't look at their life yet in financial terms,
and they'll go without insurance, they'll go without health insurance,
they'll go out with car insurance. And let me tell you,
if your finances are that poor. And what I find
about this population that I'm speaking to, they're usually very
angry and it's everybody else's fault with their own.
Speaker 1 (51:25):
I can't help it.
Speaker 3 (51:26):
I don't have enough, bunny. I'm just going to have
to not you know, I'll get the policy later. Parents
worry about children like that that aren't making responsible decisions.
But let me tell you, if your finances are bad
for whatever reason, and your car insurance gets canceled and
you don't get it back as quick as possible. After
(51:49):
the first month or two that you don't have it,
you tend to forget about it, and then you'll be saying, well,
you know, I really, you know, nothing's happened yet, you know.
Speaker 1 (51:59):
I mean, I'm not going to get an accent.
Speaker 3 (52:01):
I'm going to be really careful when that person gets
in an accent and they're uninsured, They don't have any insurance,
and it could be a bad accent. First of all,
they lose their car if it's a bad accident, they
don't have a car anymore, they have hard time working,
But they could be into the hundreds of thousands dollars
of liability that they're going to be having to pay
(52:24):
without insurance to the poor family that they might have
injured for years to come, and their future has been
totally sacrificed or destroyed jeopardized because of a rass decision
to where, well, I don't have the money right now,
and you know, I'm not going to get into an accent.
(52:45):
I'm asking everyone that thinks like that, that thinks that
you're invincible, that's not going to happen to you, to
start paying attention to what Johnny and I are trying
to do with this series. We are trying to help
people have a better life through proper financial management of
(53:05):
their affairs and have stability built into what we're talking about.
The whole idea of stability means don't just be out
there not being able to afford basic insurances. One concept
that I want to put out there is you can
get car insurance if you own a home cheaper if
(53:25):
you buy it as a bundle with your homeowner's policy.
So there's so many things to insurance, but the main
one that I'm concentrating on is don't not have the
ones that are any stable minded person has to have.
You're not going to have a mortgage if you don't
have homeowners So that one's going to be forced onto.
(53:47):
But car insurance is a huge one. Medical insurance goes
hand in hand with that. I know so many people
that don't carry medical insurance because they they say they
can't afford it. Well, you can't afford not to. So
Johnny closing comment, then we'll say thank you.
Speaker 4 (54:02):
Okay, So my closing comment is to continue to listen
and hear. And when he was talking about the homeowners
and all that, I just want to reiterate Renner's insurance.
Make sure you have Renner's insurance. Remember the person who
owns the property. Because I'm a property investor, I've protected
my property. It doesn't protect the stuff inside the building.
(54:25):
That's your responsibility. So make sure that you have Renters insurance.
If you rent apartment, whatever, make sure you do that.
And if you have questions to do research. Google is
your friend, but just keep in mind to look a
little bit lower than the first thing on the line
and do some research and ask some great questions. So
(54:46):
we appreciate you and Steve appreciate this format because this
is very powerful and engaging.
Speaker 2 (54:54):
And I hand it over back over to you.
Speaker 1 (54:57):
Thank you, Johnny.
Speaker 3 (54:58):
I haven't I haven't thought to say the last couple
of shows, but you can reach Johnny and I at
rightthink dot org. You you might be listening to the
show through a number of different channels that's out there,
but R I, G H T T H I, n
K dot org, rightthin dot org contact me and you
can say, hey, Steve, no offense, but I'd rather talk
(55:20):
to Johnny.
Speaker 1 (55:21):
Can you get me in touch with Johnny. I'd love
to pass you on to Johnny because she's helped me,
she'll help you well. Johnny. Thanks for today.
Speaker 3 (55:28):
You've brought some wonderful thoughts into the into the equation
here and I look forward to next week where we
talk about medical insurance and and and the need to
have good medical insurance. Well, everybody, have a wonderful week.
Thank you very much, God bless you. Thanks for listening
to Right Thinking with Steve Coper. I'll look forward to
(55:50):
being with you again next week and remember don't quit,
plan ahead, It will get better. God bless you and
have a great week.
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