Icy clock (Credit: Allison Bell/ALM)

No, I did not mean to write the title differently.

The amount of life insurance people own can be viewed as a status symbol for those that like to throw big numbers around.

I always thought life insurance was a way someone demonstrated their view of the value they place on themselves to others. Many years ago, I realized that there was a direct connection between the value a person places on their life and the value their life holds to others and the amount of life insurance they own.

I have never really had to work very hard to convince someone who knew that they needed life insurance to apply for any. The hardest situations I have encountered are the ones where a person would rather buy expensive jewelry, go on a long vacation, buy the biggest house, or buy the most costly clothes or car.

 

(Related: How to Help Prospects ‘Get’ Life Insurance)

This is as true in family situations as it is in business. A situation I was involved in several years ago involved the owner of the largest company of its type on Long Island. The man was in his late 60s. He had diabetes, and heart problems, but he ran his company like a lion.

His oldest son worked quietly within the company, primarily focused on keeping his father from overspending. The man was in the process of constructing a palace on the North Shore of Long Island, overlooking the Long Island Sound. It was kind of weird, because he had no spouse and was not all that close with his few children, so the question was, who was going to inhabit the walls of this big structure?

The man drew heavily from his company funds to pay for the building of this place. At one point, when he realized he was spending heavily, Mr. ___ decided to buy a life insurance policy for $1 million death benefit. Knowing a little about Mr. ___’s medical profile I was not that excited. I said, “You know I will have my work cut out for me, but, if you get your doctors to cooperate, I will do the best I can.”

He promised to complete an application and get his doctors to respond to the requests for medical records which were going to be coming from the life insurance companies. With his completed application in hand, I went to two different wholesalers with the man’s complete medical profile.

He was rejected by 14 companies from one wholesaler, and nine from another. Ironically, the second wholesaler received an approval from one of the companies that had rejected him from the first wholesaler. (That’s business, I guess). I went back to the man somewhat nervous, because I knew I would be presenting news Mr. _____ probably did not want to hear.

“Mr. ____, I have good news, and I have bad news,” I said. “Which do you want first?”

My client was a former U.S. Army Ranger and feared very little.

“Give me the bad news first,” he said, somewhat bored with the whole discussion.

“Well, you were rejected by about 23 life insurance companies,” I said with a hint of glee in my voice.

“And, now you are going to tell me good news!” Mr___ almost hissed at me with anger on his face.

“Yes, you are going to love this,” I blurted out. “You know the first list of 14 rejections…”

“Yeah, so,” Mr. ____ chimed in.

“Well, the same company that rejected you from list 1 said yes on list 2. Same company, different underwriter.”

Mr. ____ did not share my enthusiasm. Instead, he wanted to know the cost (which was roughly $21,000). He drew a deep breath and said, “Call me next week. I’m going to think about it.”

Mr. ___ never bought the insurance. Two years later, he was dead from a heart attack.

His dream home was still unfinished and had to be sold for pennies on the dollar, while the son fought hard to keep Mr. ___’s company operating.

A few months later, the doors of the company closed for the last time.

About 35 full-time employees were left without a job. The son was left to figure out his next occupation at the age of 42. If only Mr. __ had purchased the life insurance.

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Jerry Cohen (Photo: Jerry Cohen)Jerry Cohen is a broker in the life, health and Medicare supplement insurance markets. His office is in Port Jefferson Station, New York.