Full Transcript for 81. Essential tools for protecting your family

kind of check that box. So the philosophy changes where it could make sense or doesn't make sense for folks. So those are the questions that I'm asking when I, you know, I'm a big, I like to think of financial planning as kind of like a painting, I guess, you know, you want to look at the whole picture. You want to see it in totality before you start looking at the little nooks and crannies like life insurance. So it's always best informed looking, at that potential solution in the grand scheme of the overall plan and seeing where, if it fits. 00:06:41 Speaker 5: Right. 00:06:41 Speaker 2: And I think the approach to financial planning is, and Sammy, I'll let you weigh in on this, where we approach it differently is it's a math problem. It isn't an emotional scenario, right? It's looking at if someone... dies before they reach their plan objectives, what's the financial implication? Right. And then how do we mathematically say, okay, what's the financial implication and what needs, what, what expenses need picked up from there and what's the best way to go about it. 00:07:16 Speaker 1: Right. 00:07:16 Speaker 5: Yes. 00:07:17 Speaker 2: Okay. So Sammy, how do you go about deducing that? Is it software that we use like money guy pro to get there? 00:07:26 Speaker 3: Um, Yes, and it's also you have to own in on the philosophy of the couple or the parties involved. Over my years in the business, the attitude of the breadwinner was not always favorable towards life insurance, and the attitude wasn't always favorable. Well, you know, I want to leave my wife, so she doesn't have any worries. Some of it is, hey, she's a big girl. She can take care of herself. I don't really care. you know, I'll plan this as I'm doing it, and, you know, she can take care of herself. So that's important when you come down to finally trying to get them to do something if there is a need. I think that the need has changed recently because of the tax ramifications of qualified money. When you and I started in the business, we had a lot of... Drawings on a legal pad to construct Social Security life insurance to do the L and But now when you reach it the estate limit is what twenty million dollars each? I think 15 15. 00:08:45 Speaker 2: Yeah, just shy of 15. 00:08:47 Speaker 3: So people walk around in the off wall I don't have 15 million so I don't have to worry about you know a state or life insurance to pay for my estate taxes because I I got $ 15 million to give away. You're right. You don't have to. Next question. How is the tax implication on your children going to be? And are you aware of that impact? And is there something you'd like to do to take care of that impact? And they're like, why? What do you mean? Well, I mean, how much? You know, you have accumulated all these assets. You got $ 3 million. How much of that's qualified? 401K, pension, IRA, how much of that is qualified money? Oh, well, I got, you know, $ 2 million of it. Great. What happens when you and your wife die? Who gets all that? Well, I got two kids. Great. Well, how does that impact a million dollars of taxable income to each child when you die? Is that a concern to you? And again, my responses are, well, I don't really care. That's their problem. Or, gee, I really didn't think about that. So where we were taught that there's a need for life insurance almost all the way up until the guy dies, with the estate tax laws, it kind of brought life insurance out of the question because everybody said, well, I have all that money. You know, I could handle it. I don't have any liabilities, all that kind of stuff. But I think today, with a little bit more of a society that's sort of a lot of different activities, a lot of different ideas, all that work, optional lifestyles, the impact on kids, that is kind of missed. And that's some of my discussions. Even if somebody doesn't have a lot of money, even if they're looking at Passing assets on to make sure that goes to their kids. Do you concern with that transition? And some people say, yeah, I mean, what can I do? They might say. Well, then the life insurance question comes up in a different manner. 00:11:10 Speaker 2: It's interesting you put it in that perspective because here's kind of how I see what I'm calling the modern day estate tax situation. is folks, especially over the last 10 years, market performance has been phenomenal. People have more money in their 401ks and their IRAs than they ever thought they would have. If you're in your 60s, you've accumulated probably more money than you would have thought. And even though you have that $ 15 million exemption, and to your point, Sammy, people are going, I'm never going to hit it. I'm not going to pay an estate tax. But if you trend that money out over time, To your point, if that ends up becoming a $ 2 million IRA, and people go, well, I'll never get there. And my challenge, many of them saying, you never thought you would get to where you're at either. But then that money, upon the death of both spouses, flips to a beneficiary IRA. Money has to be spent within 10 years, which means it's taxed within 10 years. So that's becoming the modern day estate tax to me. because of how that money's getting taxed. And to where I started the show saying, we live in a dual income world these days. And since you're having a lot of professionals that are earning a strong income, if you pass a million dollars on to one of your children and they have to spend it within 10 years, and for the sake of our argument, let's say they just withdraw and equal installments over 10 years, that's $ 100, 000 a year you added to their income. How much did you push up their tax bracket? How much of that money? So which means you pushed up, did you push them from a 15 to a 25? So now you have a 25% estate tax on your inherited IRA, you know, times a million dollars. That's a quarter million dollars of your hard-earned money that went for taxes. That sounds a lot to me

like an estate tax. 00:13:10 Speaker 4: Yeah, I think if we're going to talk, I guess, a bit of policy and tax policy, I think it's legislative risk. And I also think that's what I would call the risk of estate taxes kind of coming back into the fray, becoming part of the tax code that people have to be considering. It would be legislative risk if they knock that exemption down substantially. But also, I think that's another thing that's why people really are doing a lot more Roth conversions. It's a buzzword in our industry. It's something that clients want to talk about and have a conversation about, even if it does or doesn't make sense to them. They want to be able to start thinking about having tax-free income in retirement by, you know, taking a tax hit now, taking your pre-tax 401k, switching it to a Roth, and then letting that, you know, be distributed to heirs in a much more, much, much more tax efficient way. Plus you, you duck some RMDs. So that's, you know, there's pros and cons to that, but it's, I think that's why it's been a kind of a buzz. You know, there's been a lot of buzz around it is because it's the new, it's one of the new ways of trying to avoid the estate, the estate tax, which is really the transfer of pre-tax qualified accounts. 00:14:31 Speaker 2: And, and that, to balance that out, Steve, and then you say, okay, you know, if you're taking larger amounts, RMDs, required minimum distributions, because of the success and the growth of your portfolio, but you're wanting to try to convert, that's expensive. And then that's where the conversation of life insurance creeps back in and says, what's cheaper? Is it cheaper to pay a premium on, for instance, if you have that $ 2 million that you're passing to each kid where you have a half-million-dollar insurance policy to pay the tax, is it cheaper to pay the premium on that? That's why I set the stage by saying, Sometimes it's a math discussion, which is a more cost-efficient thing to do so that when you pass away, you're passing on the money to the kids that's going to be taxable, but you've also passed on a tax-free death benefit to subsidize them for the tax implications of that inheritance. 00:15:25 Speaker 3: Another aspect that we need to think about is the replacement of income for the retired couple that may be on Social Security that one person's Social Security benefit is higher than the other person's benefit. And when that person dies, the transfer of that income goes to the surviving spouse, but it's not at 100% of both of their incomes. So if one spouse is making $ 2, 000, the other spouse is making $ 4, 000, that spouse at $ 4, 000 dies, that $ 4, 000 amount of $ 4, 000 transfer to spouse in regard to another $ 2, 000. So she still loses $ 2, 000 of income because the person died. I think that's forgotten in the conversation about life insurance. If that's a key matter, if the spouse has maybe significantly less assets to live on, and that will become a little bit of a burden to her, that's another reason that comes into play today where maybe years ago it wasn't. 00:16:36 Speaker 2: Jimmy, should you always be assuming the guy dies first? 00:16:41 Speaker 3: I'm not going to touch that with a 10-foot pole. I mean, statistically speaking, an aggregate. 00:16:46 Speaker 4: Law of large numbers, you put it up. 00:16:48 Speaker 2: I know that's statistically the game. 00:16:51 Speaker 3: I know, I know. 00:16:52 Speaker 2: So that's the practical scenario. So I just had to bust your chops on that a little bit. 00:16:55 Speaker 3: You should be happy I'm still wearing a different shirt. Yeah, right. 00:16:59 Speaker 2: Steve, we spoke in an earlier podcast. It took years, years for Sammy not to wear a Steelers shirt during the show. 00:17:07 Speaker 5: Oh, boy. 00:17:08 Speaker 4: Man, we really are going to touch on some controversial topics today, aren't we? 00:17:16 Speaker 2: So these are elements back to, you know, and I've always been this way, even though I grew up in the insurance business, that whatever insurance you buy, it has to make sense. And there has to be a reason for it and a purpose for it. Otherwise, don't spend your money. Just don't be emotionally connected to it because when you do that, you forget the reason you buy it. And then those reasons don't matter. And then you end up canceling it at some point in time. And especially in a life insurance policy, if you're canceling early years in the contract, it is not to your advantage to do that. 00:17:45 Speaker 3: It's got to be a value decision. 00:17:47 Speaker 2: Yeah, absolutely. 00:17:48 Speaker 3: There's got to be a value in doing what you're doing because then you know you're doing the right thing. 00:17:53 Speaker 2: It's got to have reason and purpose. 00:17:54 Speaker 3: Yeah. 00:17:55 Speaker 2: So back to critical financial events, Stephen. 00:17:58 Speaker 3: Yeah. 00:17:59 Speaker 2: And that's why I wanted to bring this up. 00:18:00 Speaker 5: Yeah. 00:18:01 Speaker 2: And to the point that even if there's enough income, when one spouse passes, we've seen in cases that the surviving spouse doesn't have enough income. And maybe the assets aren't strong enough to support a one income scenario. We've seen that a lot. And there's different solutions we've had to that. You know, for instance, one of the solutions we have, and I say a client may not have been around long enough to create the estate to just ensure a more confident work-optional lifestyle where we've done maybe a term policy for 15 years. That's not a big, expensive life or indexed universal life contract to solve the problem, but we were able to define the period of time that the critical event, if something happened, the client or surviving spouse was most at risk. Right. So there's reasons for it that people don't necessarily think about. So we, we, we deployed this tool, this life insurance tool to solve that if that person passed before, when we had, when

we actually had accumulation targets of where we needed to be. So if it was a one income scenario, what that one income scenario would actually look like. So again, that's probably not a solution people thought of, but that's the problem came up. And actually the The interesting thing was it wasn't really even brought up by me. It was brought up by the client by saying, I don't think this one over here has enough money if I'm not here. How do we fix that? Yeah. 00:19:40 Speaker 4: And I think that's just kind of that philosophy, too, is, you know, we talk, me and you, senior, talk a lot about having a well diversity. 00:19:50 Speaker 3: Portfolio, right? 00:19:51 Speaker 4: So depending on what things come your way or what things come in the way of the market, you have a strategy or other things that'll hedge your bet, right? 00:20:01 Speaker 3: It makes things overall safer. 00:20:04 Speaker 2: It gives you options. 00:20:05 Speaker 4: And I think kind of applying that, and I have this conversation with some of my younger clients probably more more often is, you know, I think you want to have this, a similar philosophy with different aspects of your financial plan, right? Diversifying what you're doing in some ways to give yourself options to hedge in case something different comes up in your life that we didn't expect or something different happens with policy, right? And something you do now might actually work better. I think life insurance is certainly something to be thinking about with that because younger clients are, need tend to need more quantity of insurance. 00:20:45 Speaker 3: Right. 00:20:46 Speaker 4: So there's different ways to fund that. But I think when people are starting to consider it, it's, well, you don't necessarily want to have everything in term for some people, you know, for the people that fit into that is you don't necessarily want everything in term. You know, sometimes you want whole life because when you are retired, you've already paid a lot into a life insurance policy. And if, you know, you still need it for a reason that just because I can't tell you right now i can speculate i can give you ideas of why you might need it but i don't know right you know you've given yourself an option to have life insurance till you pass instead of just having it for 20 30 years and i think that's you know again goes back to the point i was trying to make is do you give yourself options because if even if you don't need it sure you spent money that you lost on insurance that you didn't need anymore same thing with term except you actually have something in there that you can either, you know, you could take out, you can loan out, you can take up a paid up reduced amount, right. You could keep paying on it if you need it in full, right. You have a number, so many more options, you know, for maybe a smaller amount. And that's why I think a diversified approach to life insurance is something people should just have at the back of

their mind and consider, right. I think a professional guide you to the right conclusion. Um, but oftentimes a blended approach can give you options that you don't think you needed. 00:22:14 Speaker 2: Right, okay. Sammy, did you want to weigh in on that? 00:22:18 Speaker 3: Yeah, I mean, coming from Stephen's point of view as a wealth advisor and wealth management and managing people's money, his attitude on life insurance is just like his attitude on planning, very open-minded and looking at solutions because normally you get, In the investment business, when you're an advisor, life insurance is not part of the equation because you don't need that. I'll make you enough money. We have enough money. You don't need any life insurance. You don't have any debts. You have all this money. You don't have to worry about that. And why mess around with whole life insurance? Because the last six weeks, I've had three or four people come in. Their term is ending at 63 years of age. Their term is ending. and they want to do something. Well, I proposed what the conversion was and what new term would be. They chose the new term because obviously they had other assets in under because they talked to their investment guy and they were satisfied that they had enough cash build up. But I think it is different. You have to look at it not just as far as cash build up. Life insurance is not an investment, okay? It's not an investment. If I got to put $ 100 a month to try to build my wealth and I'm putting in a life insurance versus giving him $ 100 a month, I better give it to him because he's going to give me more money than what the life insurance is going to give me. However, 15 years down the road, if I bought a whole life insurance policy for $ 100 or $ 200 a month, That dividend could pay the premium for the rest of my life, so I only have 15 years or 20 years of investment in it. And now I've got to pay the policy for the rest of my life. I don't have to make decisions based upon, oh, my term is ending. Or I had a client who's 70s and she has a term conversion that's going to expire in October. Well, she's decided to convert most of it. Okay. 00:24:30 Speaker 2: Sammy, that's a great point. I need to jump in here, take a break, but we will get back. I want to take this discussion further using the philosophy that we talk about frequently on this program of the difference between optimizing and maximizing. 00:24:44 Speaker 3: Okay. 00:24:44 Speaker 2: I'm with Sam Morocco and Stephen Duprilli. We're talking about the financial planning process, the shocks in the system and where life insurance can help solve that. This is Leo Duprilli. This is the Gem Young Wealthcast. We'll be back after this break. 00:24:58 Speaker 5: At Jem Young Insurance and Wealth Advisors, we know every financial journey is unique. That's why our team of financial planners, paraplanners, and service professionals work together to provide personalized strategies for a work-optional lifestyle, investments, and risk management. We're here to help you plan for today, protect tomorrow, and enjoy the life you've worked so hard for. Take the first step toward financial confidence. Call Jem Young Insurance and Wealth Advisors at 330-533-6936 to schedule your fit meeting today. At Jem Young Insurance and Wealth Advisors, we know insurance can feel complicated and overwhelming. That's why our team is here to listen, understand your unique situation, and provide solutions that work for you. From home and auto to life, plus a team dedicated just to commercial insurance, we help protect what matters most without the stress. Don't wait until an issue arises. Call Jem Young Insurance and Wealth Advisors at 330-533-7941 to schedule your fit meeting and get the protection you need today. 00:26:00 Speaker 1: Hey there, this is Dan Rivers. Friends, if you're planning for a work-optional lifestyle or looking for financial insight or just want real conversations that help you make smarter decisions, we've got you covered. Listen to the Gem Young Wealthcast anywhere you get your podcasts, including Apple Podcasts, Spotify, and the iHeart app. And now you can watch the full video podcast on their YouTube channel. Gem Young Wealthcast with Leo. New episodes every week featuring professionals, local leaders, and conversations that matter. Now, back to the Gem Young Wealthcast, brought to you by Gem Young Insurance and Wealth Advisors. Once again, here's Leo DiPrilli. 00:26:45 Speaker 2: Welcome back to the Gem Young Wealthcast. 00:26:47 Speaker 3: This is Leo DiPrilli. 00:26:48 Speaker 2: If you're just joining the program, I have with me Sam Morocco and Steve DiPrilli. Hello, boys. 00:26:54 Speaker 3: Good to be back. Hello. Yes. Thank you for having us. 00:26:57 Speaker 2: Yeah, this is part of our series on different elements of insurance this month and trying to be more specific. of what we're trying to do. We've talked this month so far a lot about Sam, you being a registered social security analyst. We've talked about the storms and the floods and the implications on insurance, how the insurance team on. Talked about our product depth. We've done a lot of that too. So it's been a lot of informative shows. And today, everybody talks about life insurance or doesn't talk about life insurance. It's probably more the reality. And we want to talk this segment which I said before the break, we want to talk more about optimization because that's a term we use a lot in our financial planning process and the difference between maximizing and optimizing and why that's important when you look at a plan holistically with what we do and the different elements to it. Because no matter how well we plan, a plan is just that, a plan. And plans change and shocks happen and uncontrolled events happen. You know, we've all been around long enough that we see these things, and we have to talk about if these shocks happen or these untimed critical financial events

happen or unplanned critical financial events happen. You know, how does your plan handle it? And this is where insurance comes in. It's about protecting your wealth and your assets, right? And not everything, you know, Sam and Steve, before the break, you're bringing up, you know, it's not just about the return. That's always... the objective and the given to get there. But how do you manage when things don't go the way you expect them to? And whether it's market performance, a divorce, death of a spouse, you know, loss of income when one of the spouses passes during retirement, you know, these could be landmines. These could critically devastate people. And that's why, number one, that's why the plan is so important because you have to objectively identify those Instead of just say, we're fine. I think we'll be okay. And we've heard that a lot. And people say, well, if one spouse passes, I'll be fine with what I have. And when we run out the plan, we're like, well, you're not really, you know, because people tend to focus on what life is today. Our job is to look five, 10, 30 years down the road and what those implications will be and try to plug those things in and along the way too. So one of the conversations about life insurance, the other one's disability. You know, Steve, you alluded to in the first segment about, you know, the biggest, we used to call it, Sam, back in the day, the goose that laid the gold egg. Those are the people earning the money. So what are you doing to protect? 00:29:39 Speaker 3: Male or female. 00:29:40 Speaker 2: Yeah, that's why in today's world, if you work for a large company, they typically offer short-term, long-term disability, better life insurance benefits. But the reality is 95% of the businesses in this country are small businesses. You've heard me say that times before. Many small businesses don't offer that. So, you know, another key component is, you know, what if something happens where you're not able to go back to work, you know, and you lose that earning capacity. You're here, you're okay, unable to work, you know. So there's, these are, I'm just bringing up examples of unexpected critical financial events, what that does to a plan of things you need to consider. And, you know, it's not fun to spend extra money on these things, but until you need them. The lesson we learned earlier this month is, People that were just buying their insurance based on price and the coverages they didn't have and the financial pain that's causing them. It's how many people that weren't insured properly aren't going on vacation next year because of the money they had to come up out of pocket to pay for things to get their house fixed. 00:30:43 Speaker 3: One other thing you have to think about, I think, is the loss of a spouse and what did that spouse contribute towards the operation of the family? What things did they take care of? And that that surviving spouse has to additionally take care of now because he or she

doesn't have that partner doing what they were doing. I think sometimes the person, the survivor, forgets about that. 00:31:12 Speaker 2: Oh, gee, I've got to do that. And in today's world, I would say it's a split-duty world. It's not how jobs were defined in the past. It's many couples today saying, here's what it takes to run the house, whether it's washing clothes... putting gas in the car, paying the bills, and I find today that the division of duties is gender neutral of how people approach it. But to your point, Sam, if somebody's gone 20 or 30 years not doing these things and these things come back into the fold, you know, especially if the person that was in charge of paying the bills passes first, that's what we're seeing as the biggest challenge because, you know, the other spouse just completely relies on them. You know, so there's a, there's a big challenge for us to help get them on their feet with that and figuring it out, you know, a little and finding out. And fortunately that's why in that situation, their client, our clients have, you know, we're managing most, if not all their money with what we're not, we know where it's at. So we know where to direct them. 00:32:20 Speaker 5: Right. 00:32:21 Speaker 4: Yes. 00:32:21 Speaker 2: So, so back to the optimization. So, and I'll let you both, kind of both alluded to it before we went on the break of saying, okay, how do we optimize covering the risk, manage the expense, and then managing the additional money we have to invest? So, Steve, with your client base, how do you attack that? 00:32:42 Speaker 4: I think step one is always try to identify, and this is, you know, again, I try and go probably deeper with my clients, and I don't just try and do basic financial advising right I try and do financial planning so one of the things I like to do is get my arms around a budget and to be frank with you and I tell my clients this too is like I don't exactly care what you're spending on entertainment and what you're shopping what I'm really trying to do is identify discretionary spending what I'm trying to do is identify the cash that you have that is coming in that you're not spending, that you're saving in one way or another, right? And without getting into details about that, you kind of back into that number. It's not necessarily just exactly what's on the page. You have to identify that first to figure out what, not really even first, it's a piece of the puzzle. Because then you have to factor in what do they want to do? What are the risks to the plan? And you kind of have to marry the two, right? So you don't want necessarily lazy cash sitting around, you don't want to keep it all liquid, right? But does it then you start getting into it? Does it make sense to invest it? Or is there risk to the plan? Is it a rational response to transfer some of that risk, right, rather than trying to retain and grow through it. And especially for younger clientele, more often than not, you're not

at a point where you've, you can self insure for a lot of things. So you have to You have to, again, look at that discretionary budget and try and deduce what solution is sufficient. Frankly, I back into the numbers pretty specifically. When I'm talking about life insurance, when I'm talking about disability, I'm not saying, does $ 500, 000 in terms sound like enough? No, I'm backing in what they contribute from an expense perspective to the budget and I make them holistic and I typically put a kicker in on a monthly budget. 00:34:51 Speaker 5: Right. 00:34:51 Speaker 4: And I do a present value calculation to figure out specifically, darn it. If somebody were to pass away today, this is what you would need. That's what it would, that's what you would need to maintain your lifestyle and to put the kids through daycare approximately. 00:35:04 Speaker 1: Right. 00:35:04 Speaker 4: And this is, you know, of course I'm making assumptions here and there, but that's the number, right? So when it comes to, I guess, life insurance, I would say disability is a little bit easier because it's more income replacement than expense replacement. But, um, I think what a lot of people like to do is that, um, life, you know, some life insurance agents will just multiply the salary by something. And it's like, well, that's not their life. Their life is what they're spending, right? They don't necessarily, you know, you want to indemnify the family to ensure that they can live the life that they want to, should something happen. And when you do that, I think you want to more, again, you got to pop the hood. It's, You got to pop the hood. You got to figure out what discretionary looks like. You got to know their budget. You got to know what their investment portfolio, it all factors in, it all factors in to ensure that clients are using the appropriate products, using the appropriate amounts for the risks they may incur. 00:36:04 Speaker 5: Right. 00:36:05 Speaker 4: So I, to be honest with you, I get, Maybe that's a boring answer, but for me it's very granular and it's very linear and it's awfully mathematical as opposed to emotional. 00:36:20 Speaker 2: Well, maybe because I have that logical brain. I don't know where you got it from. 00:36:24 Speaker 3: I have no idea. 00:36:28 Speaker 2: But I think that's where people own it. I think that's some of the resistance that people face because, to your point, Steve, it used to be that some people would just say, here's your salary times 10. Show people that number and it's eye-popping. And they're like, I don't know if I need that. I don't know if I can afford that. That seems like a lot. But it has to have a reason to it, I think, if people are going to own it and decide if they're going to own it. 00:36:51 Speaker 3: When I started back in the insurance business, it was five to six times the income of the breadwinner. And then if you're going to insure a spouse, one to two times her income if she worked. And then it

went from seven to eight. And then it went to ten. Because of the expense of living And that number is scary you make a hundred thousand dollars then I ain't gonna name a million dollars of life a ten million dollars five million what I need that much for well in that case of the That number we are Looking at from only one aspect if I made a hundred thousand dollars a year and I died today I Who's going to replace that $ 100, 000 a year in salary for my family? So the number was, hey, 10 times that amount, that's what you need. And okay, so that was the number that you start with or like a base to work with. Over the years, that's too simple. It could be more or less. A lot of times it was less because that factored in on just taking lump sum of money and dividing it over ten years rather than the interest the growth of that and what that would grow to so if you did that you needed less of a value today then then you would have if you just divided it by you know and so um that's how it's changed I think Steven is correct you got to look under the hood and sometimes you even look under the car to see how the hood was put together, how the engine was put together. You look underneath to see where everything goes before you can make that decision. We talked about optimizing. We talked about that in one of the podcasts with the Social Security. I guess it's like a decision of if you want to maximize it, you want to maximize speed. As I said, I buy my Lamborghini. I get in the car. I go 200 miles an hour. You know, I can't get in and out of it very soon. It takes me hours to get in and out. But, hey, I maximize. I want to get the most bang for my buck. If I want to optimize it, I buy a BMW that has leather seats that I can get in and out. It still goes 100, 200 miles an hour if I want to, but it's more comfortable on long trips. It has a radio. I can move. I can have people sit in the back seat. So I've optimized my speed or optimized my opportunity to provide that vehicle. It gives me more benefit. That's what optimization is. That's what we all try to do when we sit down with clients. We want to optimize their particular situation. So there's no guessing game. There's no. Well, gee, what happens if this happens? How do we cover that? What happens if we covered that? So I think optimization is important. 00:39:59 Speaker 2: I think it's key. And that's a good discussion on just one of the ways to approach it from one of the areas to approach it. And it's one of those scenarios where it makes– I laugh when I hear these commercials, but I think they're just– it's the old sales guy days, you know, the commercials on the radio. But from Big Lou, you guys ever hear those? Big Lou sells you a half-million-dollar term policy for $ 24 a month. But Big Lou's like you, and he's on medicines, and he's on his second wife too. 00:40:30 Speaker 3: Yeah. I think it's a funny commercial. Winner, winner, fried chicken dinner. 00:40:36 Speaker 2: I think it's really funny. And I know that's the intent, to just try to lighten up the purchase of life insurance. But that's kind of counter to everything that we think. You know, here's just an arbitrary number. Here's an arbitrary price. You know, call and see what you can get without any real. Because these are old statistics, but I'm sure they haven't changed it. So back in the day when people bought term insurance, people would buy term insurance for a reason, for a term of time. But what we found through time is that 58% of term policies canceled within the first five years of existence. 00:41:15 Speaker 3: 58%. 00:41:15 Speaker 2: So think about that. The insurance companies would collect premiums for five years, never paying out a claim. The question became, then the follow-up research to that was, well, why did they do it? Why did they cancel? Why did so many people cancel that quickly? It's because there really wasn't a solid reason of why they purchased it. And they lost the reason or the value of what they purchased over that period of time and said, what do I need this for? I'm canceling it. So they spent a lot of money. The only ones that made money in that game was the insurance agent and the insurance company. 00:41:53 Speaker 3: Okay. 00:41:54 Speaker 2: So, And I would look at things like that and say, well, because the product wasn't sold properly, that's why you have such a high cancellation rate. Or somebody bought it for just an emotional reason, and then once they reached back to a more rational position from a practical point of view, said we don't need that. So that goes to the conversation of optimization. And that's why Steve, the approach and Sam, the approach of getting as granular as we do, because that's when people say, okay, that's really an issue, and that's really my issue, you know, whether it's creating the estate they haven't been around long enough to create, whether it's to help subsidize the loss of the revenue, the income from one of the spouses, you know, fund those college savings account if that was an aspiration of that particular client, you know. We had a client in a couple weeks ago, both quite successful, made some major financial moves recently in their life, and asked the question, if something happened to either one of you, you guys okay with your income? One goes, yep. The other goes, nope. And that became top of mind because the one that doesn't have enough feels enormous pressure to try to carry on in case something happened to the other. So six months, nine months ago before they did all this stuff, everybody was fine and everything was good, but this became just an emotional pressure at this point. 00:43:27 Speaker 6: Right. 00:43:27 Speaker 2: So that's kind of the things that I'm seeing in, in the real emotions of where this is coming from and fears to people. 00:43:33 Speaker 3: So, yeah. You know, when nine 11 happened, um, they interviewed, uh, some people and this one young lady who had small children,

uh, Her husband worked at one of the companies, the bond company. He had a million-dollar life insurance policy that came with the company, but personally, he had a $ 3 million life insurance policy that he didn't pay the last premium. 00:44:09 Speaker 5: On. 00:44:09 Speaker 3: And when he died, they interviewed his wife, and his wife said, well, I'm yes we could get by with the life insurance he had now and we're thankful for that we can get by any kids but we couldn't keep up the same type of lifestyle that we were accustomed to living without that an additional three million dollars of life insurance that he had planned so that's not a critical statement that's a maximum optimization and optimization statement is to, you're buying things for a reason and it has to be the right reason. And it has to be a value proposition to her. She felt really comfortable knowing she had that additional $ 3 million and knowing that she could keep the lifestyle accustomed. And it may be, well, I mean, What does that mean? Well, I'm sorry, kids, we can't go and get ice cream today. We already went once a week. But we used to go, and Daddy was there three or four. Can't do that anymore. We've got to stay within a budget. So I think with Stephen's approach and your approach and our approach here, we try to get down to that level and say, what kind of lifestyle do you want to live? 00:45:47 Speaker 2: Triggers for you steve i i brought some triggers up for clients triggers. 00:45:51 Speaker 4: For your clients to to have the discussion yeah just a lack of it right just the trigger is where is it and what and if we don't have it why don't we have it and is that it was that the advisable decision to not have it um or is it because we don't want it or we're ignoring it or I don't want to talk about death. People don't outright say that, but oftentimes it can be that. I just think there's not many triggers, really. It just needs to be part of the discussion. The trigger to discuss it is when there's no plan for it. 00:46:29 Speaker 2: Sam, you've been around long enough, and I've been around long enough, that I will say early in my career that this was a grossly oversold product. to now it is a grossly undersold product, which I've talked about many times on the show in the past of how many life insurance agents there used to be, and now there's very few use in the world. 00:46:52 Speaker 3: How many life insurance companies went down from where they were. I'm laughing. Excuse me. I think of a salesman when I was with John Hancock. And he had a territory. And he was well-liked by 50% of his clients, and 50% didn't like him. And there was a debit. Well, he used to walk into his debit clients, sit down at the table, took out a metal casket, slammed it on the table, and said, I'm here to talk about when you're in there. And that's how he talked about life insurance. He got kicked out of a lot of houses. 00:47:38 Speaker 2: Yeah, I'm finding that a little on the harsh side. 00:47:42 Speaker 3: Direct. But that was such a dramatic action that it shocked people. It said, oh, okay, well, maybe I should think about it. 00:47:54 Speaker 5: Yeah. 00:47:55 Speaker 2: Well, I'm going to have somebody else pick up my premium next month. 00:47:59 Speaker 3: Yeah, right. I thought we should get him engraved. 00:48:03 Speaker 2: No, thanks. All right, boys, we're almost out of time. Any final thoughts? Anything you want to add, Steve? 00:48:11 Speaker 4: No, I would just say consider your plan. If you're going to self-insure, do it intentionally. Don't do it because you don't feel like thinking about it. 00:48:19 Speaker 2: All right. Sammy? 00:48:22 Speaker 3: I just think people already want to plan for their alternate lifestyle, and there's many aspects to it. And if you don't plan... for it, you're going to miss out on a couple that are going to cost you. 00:48:36 Speaker 2: The dominoes are going to fall one way or the other. 00:48:38 Speaker 3: Right, boys? That's right. 00:48:39 Speaker 1: All right. 00:48:40 Speaker 2: Sam Morocco and Stephen DePrile, appreciate you boys being with me today. Great show. 00:48:44 Speaker 3: Thanks for having us. All right. 00:48:46 Speaker 2: This is Leo DePrile. This is the Gem Young Wealthcast. I'll be back after this break. 00:48:55 Speaker 6: At Gem Young Insurance and Wealth Advisors, we make planning for your future simple by offering both insurance and wealth management under one roof. Our team helps protect what matters most while guiding you toward your financial goals, whether it's safeguarding your home, health, business, or planning for a work-optional lifestyle. With everything in one place, you get seamless support, personalized strategies, and peace of mind. Call Gem Young Insurance and Wealth Advisors. at 330-533-7941 today to schedule your fit meeting and experience all-in-one protection and planning. 00:49:29 Speaker 7: Hey, it's Medicare Jare here from Gem Young Insurance and Wealth Advisors. Medicare can feel confusing, but I'm here to make it simple. With the right Medicare Advantage or supplement plan, you can worry less about unexpected health care costs and focus more on enjoying life. Let's make sure you've got the coverage that fits your needs and gives you peace of mind. Call me, Medicare Jare, at Gem Young Insurance and Wealth Advisors today at 330-533-7941 to schedule your appointment. And let's get your plan in place. 00:49:55 Speaker 2: By calling this number, you will be speaking to a licensed insurance agent to answer your questions or provide additional information about Medicare Advantage plans, prescription drug plans, or Medicare supplement insurance plans. This is an advertisement for insurance. 00:50:09 Speaker 5: At Jem Young Insurance and Wealth Advisors, we know insurance can feel complicated and overwhelming. That's why our team is here to listen, understand your unique situation, and provide solutions that work for you. From home and auto

to life, plus a team dedicated just to commercial insurance, we help protect what matters most without the stress. Don't wait until an issue arises. Call Jem Young Insurance and Wealth Advisors at 330-533-7941 to schedule your fit meeting and get the protection you need today. 00:50:43 Speaker 1: Now, back to the Gem Young Wealthcast, brought to you by Gem Young Insurance and Wealth Advisors. Once again, here's Leo DiPrilli. 00:50:53 Speaker 2: Welcome back to the Gem Young Wealthcast. This is Leo DiPrilli. I think the common theme this month, from our point of view, from our firm, is optimization. Whether it's your auto and your home insurance, whether it's your life insurance, whether it's your financial plan, whether it's your Medicare plan, There's a lot of moving parts that we want to point out to you and show you and give you the depths of how everything interacts. It's not about maximizing. That doesn't really work. It works in a controlled environment for one aspect of your life, but optimizing your life is what we're all about here because when it's your money, it's everything and anything about your money. That's how things work and everything interacts with each other. Objective this month was just to give you all these different points of view and how everything plays in the same sandbox together, if you will. So I hope you got and enjoyed the series that we put together for you. We had a lot of great people, a lot of great ideas, a lot of great thoughts. Hopefully you got something out of that. I do appreciate you listening because this is the Gem Young Wealthcast. This is Leo DiPrile. Until next time. 00:51:59 Speaker 6: At Jem Young Insurance and Wealth Advisors, we make planning for your future simple by offering both insurance and wealth management under one roof. Our team helps protect what matters most while guiding you toward your financial goals, whether it's safeguarding your home, health, business, or planning for a work-optional lifestyle. With everything in one place, you get seamless support, personalized strategies, and peace of mind. Call Jem Young Insurance and Wealth Advisors. at 330-533-7941 today to schedule your fit meeting and experience all-in-one protection and planning. 00:52:32 Speaker 5: At Jem Young Insurance and Wealth Advisors, we know insurance can feel complicated and overwhelming. That's why our team is here to listen, understand your unique situation, and provide solutions that work for you. From home and auto to life, plus a team dedicated just to commercial insurance, we help protect what matters most without the stress. Don't wait until an issue arises. Call Jem Young Insurance and Wealth Advisors at 330-533-7941 to schedule your fit meeting and get the protection you need today. 00:53:03 Speaker 1: Hey there, this is Dan Rivers. Friends, if you're planning for a work-optional lifestyle or looking for financial insight or just want real conversations that help you make smarter decisions, we've got you covered. Listen to the Gem Young Wealthcast anywhere you get your podcasts, including Apple Podcasts, Spotify, and the iHeart app. And now you can watch the full video podcast on their YouTube channel. Gem Young Wealthcast with Leo. New episodes every week featuring professionals, local leaders, and conversations that matter. 00:53:34 Speaker 2: Join me every week where we talk anything and everything about your money. Have a topic you want to hear more about? Email Katie, that's K-A-Y-T-I at jemyoung.com. You can find us on Apple, Spotify, and the iHeartRadio apps. Until next time, this is Leo DiPrile.