The story of life insurance is an important one in the history of our country, for it is one of the factors that distinguish our culture and economy from other nations. Insurance has played an important role in the creation of capital and the relief of distress to families and businesses when tragedy strikes.
The "Real Life Stories" publicized by LIFE, the Life and Health Insurance Foundation for Education, have been able to dramatize our story in a way that dispels many of the myths about our business. The stories help to convert some of the technical aspects of our products to actual situations that people can understand. They take us from the arcane to the real world.
Periodically, in the coming year, I would like to relate a "real life story
" from my own files to reinforce the work of the Life Foundation. The following is a true story which occurred in the early months of my career in the field.
This is a story about Willie, one of my closest friends. Shortly after I entered the life insurance business, this long-time friend and former business associate, assured me that my change in profession would not affect our friendship–as long as I did not try to sell him life insurance.
With the ground rules thus laid, our relationship continued as before for some months until one evening he very cautiously brought up the subject of being "insurance poor." Offering sympathy, I asked if I could look over his program. His portfolio consisted of a collection of industrial policies, insuring himself and his family, and a small whole life policy paid for by his employer. After a few minutes of rough calculations, I determined that Willie, in this assortment of small policies, owned a cash value of about $2700. He and his wife were stunned. Suddenly, they were capitalists, a status they had not even remotely suspected.
Over the years Willie had started and terminated countless savings programs, none of which had ever reached $100. He had long since accepted the fact that he just could not save money. Yet, almost by accident, here was a $2700 nest egg that had hatched silently and with less effort than any of his abortive attempts to save in other ways.
With the confidence born of his new station in life, he made a decision to acquire more of this form of property which he had heretofore regarded as something else contributing to his level of poverty. That evening I advanced him the monthly premium for a policy that doubled his coverage. After repaying the loan, he continued to pay monthly premiums without fail.
This newly acquired self-confidence bolstered his ability to manage money in other areas. A year later he purchased another policy, this time paying an annual premium. Still later, capitalist Willie became a businessman. He went into business for himself–a move made by relying partly on his recently found capital account. It was tough going at first, but he developed into a confident businessman and began to prosper.
Some years ago, Willie, to my great sorrow, went on to his reward. However, he left behind a significant estate which provided a fine college education for his son and a comfortable lifestyle for his widow for many years.
Several things about Willie's story (which I am sure have been repeated many times) seem to be significant.
First, Willie's initial entrance into the world of capitalism was a very small step prompted by the purchase of a number of small industrial policies. Willie's motivation to purchase these policies was almost mechanical because of the nature of the contact by a home service (debit) agent. No great fanfare, no estate or financial plan, just a series of small, but important steps. Knowing Willie and his wife as I did and his orientation at the time, it is unlikely that any other approach would have succeeded.
Additionally, I know with absolute certainty that his life was changed when he discovered he could save and acquire wealth. The business opportunity he opted for would never have been met absent his new confidence and attitude. Along with the small capital he had created I also noticed that as his net worth increased his family life moved from quiet despair to comfort and hope for the entire family.
When Willie died, I was a pallbearer at his funeral. On that occasion I felt a great sense of satisfaction in knowing that, in addition to our friendship, I had helped him to understand and appreciate life insurance as property. I was also thankful for another of my associates who had provided him with a substantial group insurance policy through the organization that Willie had affiliated his business.
But most of all, I offered a prayer of thanks for some unknown home service agent who built the foundation of Willie's small but important program.
At that moment, the fact that these policies had been produced by a high-cost delivery system somehow seemed not to have relevance.
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