Insurance Understood: Just like a football Hail Mary

By Medicine Hat News on November 17, 2018.

In football a Hail Mary pass is a very long forward pass made in desperation, with only a small chance of success and time running out on the clock. These passes are amazing when they work but they rarely do. It is usually better to have a huddle with your teammates to decide on a series of smaller plays that allow you to make adjustments to your strategy to get further up the field.

This almost sounds like life insurance to me. Let me explain. I often have people come into my office who have purchased life insurance years ago from another advisor. They bought it as a way to protect their loved ones. They just bought it and simply left it alone hoping that is all that needed to be done. Unfortunately, they did not review it often enough, if at all. Now they find themselves in a desperate position to afford it and realize that they have been missing opportunities to improve it. The pressure builds when time is running out. Life insurance should be monitored and adjusted based on your life events, goals and priorities.

When I do an audit of an insurance policy, I find clients are usually surprised by its features. Some features provide wonderful opportunities. For example, guaranteed after-tax returns within a permanent insurance policy greater than current GIC rates. Or, the ability to access cash or use it as security for a loan to start a business venture. On the flip side there may be features that increase costs or even cancel the coverage before a person thought it would. This is what I would call a failed Hail Mary pass.

I think it is important to have a regular huddle with your insurance advisor and if applicable your accountant to determine if adjustments or smaller wins can be made each year. Otherwise you are treating your life insurance like a Hail Mary pass. You may still catch it but with smaller adjustments your chances of success are better.

Steve Meldrum B.Mgt. CFP CLU is the founder of Swell Private Wealth Ltd. For over a decade he has specialized in helping individuals and businesses expand protect and perpetuate their wealth. For further information or tailored advice, contact him at 403-487-0490, steve@swellwealth.com or connect on social media.

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