Archimedes is alleged to have said, “Give me a lever long enough and a fulcrum upon which to apply it, and I’ll move the world.” (Rumors to the contrary notwithstanding, I wasn’t there to hear him say it. I’m taking it on faith that’s an accurate quote.) The military refers to powerful weapons systems or concepts as force multipliers.
Paging back through the history books we can see countless examples of this in every field. The tractor came along and accomplished in a fraction of the time more than what many farmers with horses and mules possibly could. Nuclear power drives huge Navy ships further and faster than wind power ever could. Even small computers now achieve more than what thousands of people with adding machines or the first electronic calculators ever thought possible.
Those of us in financial services have a financial tool that is at once blindingly simple and unimaginably powerful. This is a lever so powerful that we haven’t yet fully harnessed that power to do good or even visualized its ultimate potential. It has the ability to benefit people and to change the world.
What is this financial force multiplier? We hardly have to ask. Plain and simple, it is life insurance.
Americans are demonstrably some of the most generous and philanthropic people in the world. Every year they give huge amounts of money to worthy causes all over the globe. Almost before a disaster is done wreaking its havoc, Americans have opened their hearts and wallets and are sending aid to the victims. Private assistance usually precedes and, in some cases, even surpasses, government help.
If underwriting rules say that total life insurance on high net worth individuals can match the value of their assets, imagine harnessing a fraction of that asset value to double an individual’s net worth. Imagine the transformational potential if even a fraction of our collective wealth– say, ten percent– tapped and used for charitable purposes linked to life insurance.
Over the last decade or so, microloans have become a growing method to help those in need in other countries. They are used to launch enterprises that start them on the path to self- sufficiency. Seeds are purchased to start small food plots for market crops. Livestock is provided to start small farms. Fabric and treadle sewing machines launch clothing manufacturing shops.
The loan repayment rates by recipients of the microloans are exceptional and the return-on-investment generated for those contributing to the funds is respectable. The largest return, however, is the satisfaction in seeing the dramatic changes created by the loans.