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The Santa Needs Assessment

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Santa comes down the chimney on Christmas night. Most people put out milk and cookies. Should you be waiting there, ask him to sit for a bit and discuss insurance with him? Why has no one thought of this before?

Santa is head of a worldwide manufacturing and logistics operation. Amazon is good, but Santa is better. He gets everyone’s packages delivered in one night. He mastered in home delivery long before Amazon developed the technology. As agents and advisors attending holiday events know, you can’t get close to a corporate mover and shaker like Santa 11 months of the year, but be in the right place at the right time in December and he shows up.

(Related: What to Do for Clients at the Holidays)

The question isn’t should you sell Santa insurance, the bigger question is would he be insurable at all. There are lots of products to consider. Fortunately, in this story, you have all the necessary licenses. (Santa’s elves are great with paperwork.)

1. Life insurance

Apparently, Santa is 1,749 years old. He is off the charts on longevity tables.  The bigger issue may be Santa’s lifestyle. He climbs on roofs. How is that different from rock climbing? That’s often an exclusion, especially since Santa does his climbing outdoors, not in a gym.

Verdict: Santa would be difficult, if not impossible as a candidate for life insurance.

2. Health Insurance

At age 1,749 Santa is old enough to have qualified for Medicare 1,684 years ago. Maybe, if he’s coming to you for advice, he’s now an American. Assuming that’s the case, he would likely need a supplemental policy. Lung disease could be an issue. Apparently, he slides down chimneys. There’s that roof climbing issue again.

Verdict: Santa would likely have difficulty qualifying for medically underwritten health insurance. Thank goodness he’s eligible for Medicare.

3. Liability Insurance

Like driving a car overseas, your concern is the damage you might do to other people’s property. He lands that sleigh on house after house. If there’s 7.7 billion people in the world and the US has an average household size of 2.6 people (call it 3) Santa is visiting 2.567 billion households on Christmas night. If the chances of property damage are a million to one, that’s 2,567 instances.

Verdict: We are not insuring Santa for damage to other people’s property. The risk is open-ended.

4. Auto Insurance

Does the sleigh get classified as a car? Maybe a wagon, since it’s pulled by eight reindeer? Let’s assume it’s a car. He drives a lot. He uses it for work. It’s always full of packages. He leaves the sleigh, still loaded with packages to slide down each chimney. On the plus side, the sleigh is parked on a rooftop, not in the driveway. Also, the sleigh doesn’t seem like a complicated vehicle to repair. There are no records of Santa getting any traffic tickets.

Verdict: We can probably get Santa auto insurance, although he would likely go into an assigned risk pool.

5. Key Person Insurance

Santa is the face of the business. He is the quintessential key person. The business would suffer harm if he were gone, although it would probably recover. Because he delivers packages at night, no one has actually seen him. The firm could probably put another Santa in the delivery role, running the business by committee. As the majority owner, his share would need to be bought from his survivors by the company. Since Mrs. Santa doesn’t fly with him, she likely has other interests.

Verdict: This key person insurance policy could be a big ticket. You would work long and hard to find a way to make it happen. This might be a reinsurance issue.

6. Long-Term Care Insurance

This might not be that tough. If Santa has no problems with delivering gifts to the world’s children, or with verifying which ones are naughty or nice, there’s no reason to think that he would have problems with the ordinary activities of daily living, or with dementia. At age 1,749, he seems to be in perfect health.

Verdict: We could probably do it, although convincing Santa why he needs it might be tough, and the underwriters might have concerns about selling him a policy with lifetime benefits.

7. Disability Insurance

The problems here are the same as the problems for life insurance. Santa does dangerous stuff. Since he helps manufacture the toys himself and also handles delivery personally, paying out of his own pocket, replacing his lost income would be another open-ended expense.

Verdict: Sorry Santa, we can’t cover you for disability.

8. Homeowners Insurance

Apparently, Santa runs a home-based business. It’s located at the North Pole. Global warming and climate change are serious concerns. If his house is made of ice, it could melt. on the plus side, you can insure against earthquakes, floods and hurricanes.

Verdict: We could probably arrange it. It’s only one dwelling. The insurer would review the coverage each year to determine if it would be renewed.

9. Income Planning

Santa does not appear to be on track to retire soon. Annuity issuers might not like the sound of providing a guaranteed stream of lifetime income to someone who’s already 1,749 years old. But, certainly, Santa seems to be someone who could get his money’s worth from an annuity with a lifetime income feature.

What do we know so far? Santa is a good prospect for auto insurance, key person insurance, long-term care insurance, homeowners insurance, and an annuity.  It’s worth staying up on Christmas night to have a chat with Santa.

— Read How to Order Wine Like a Boss (Without Paying Like One)on ThinkAdvisor.

Bryce SandersBryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” can be found on Amazon.