Tell us how you came to appreciate just how uncertain life is.
In the world of employee benefits or health care, considering the evolving demographics of the population as the Baby Boomers retire, it’s the fact that the basic needs people have in life stay the same. The elements of making sure that people have the financial resources at hand when untoward events happen is as great as it ever was.
One of the great advantages of living now is that we live longer. One of the great disadvantages of living now is that we live longer and are more exposed to adverse financial events because of it. That sometimes lulls people into a sense of false security that bad things won’t happen. But they can come out of the blue.
I myself was in the hospital when I was in my 20s for almost a year and a half. I had a condition that they were never able to fully diagnose but it involved having seizures and a bunch of other things. I lost about 80 pounds and had several surgeries.
When I came to work for Aflac, one of the things that interested me was knowing that even if you’re young and healthy things can happen. At the time I was working for the federal government, which has very, very good employee benefits, and it wasn’t nearly enough for what I ended up having to pay out of pocket. I had to pay someone for meals. I had to pay someone to drive me around. That’s not the kind of thing your major medical company pays for.
At that time I came very close to dying, to the point that I had to seriously think about it. And there I was, with no life insurance about to stick my parents with a bill, potentially, because I was young and single and never thought of it. What keeps me up night is that because health care has come a long way, because the environment is changing, because there is such an influx of younger workers, that people will lose sight of the fact that life is precarious. And that a little bit of money today can help people protect a whole lot of heartache in the future.
Longevity risk is often noted in context of retirement planning. People are living longer, and are fitter in old age and are richer than ever before. That throws some notions of life insurance on their head.
One of the key features of the modern environment in terms of people making these decisions is that people feel very out of balance. The way to deal with the combination of what can happen today and the concern with outliving your benefits is a balanced approach in benefits. If you’re looking at life insurance, the classic view of “get something cheap now and invest money to make up the difference,” and to not buy whole life insurance, is very short-sighted. A lot of people now are turning to whole life insurance because returns from other financial vehicles are so poor. In terms of longevity risk, if you’re looking at the spectrum of things, one of the great things that whole life insurance does is it takes the average person and provides them with a number of financial instruments all in one: something you can borrow against, something that accrues value over time, something that ultimately will pay off no matter what. That is something that is for the long-term. There are other instruments out there that are available to people for long-term financial planning, but a lot of them aren’t available to the average person where they work, and life insurance is. Voluntary life insurance can be available even in small accounts where the employer isn’t paying for anything.
It comes down to a concern not only about where your money is today, but where it is going in the future? People live a long time after retirement and the money you invest when you’re younger is worth that much more when you are older.