In this episode I give a high level overview of life insurance and why you might need it. How to buy it, and the difference between term and whole life.

If you're looking for a trusted source to help you stay on top of the ever-changing financial world of investing, retirement and estate planning, and asset protection, whether it's for you and your family or your small business, you're in the right place. This is the 1715 Treasure Coast Financial Wellness Podcast, where we'll keep you up to speed with the latest market news and conditions every week. Now here's your host, Thomas Davies. Well, hello and welcome to this week's edition of the 1715 Treasure Coast Financial Wellness Podcast.

My name is Thomas Davies. I'm a wealth advisor here in Stewart, Florida, and welcome. Well, summer, summer is almost over as we now enter into August. A lot of the kids here in Florida go back to school.

I know most kids up north probably don't go until after Labor Day, but we start here early in August, so let's get right to it. A lot of news this week, America has been now downgraded from AAA down to AA according to Fitch, and that really created a sell-off in the stock and bond market, slowing what seemed to be a summer's climb, growing confidence that the country really contained inflation without a recession. This week, we finished in the red, losing on the big banks, big tech, and major automakers. The Dow Industrials fell by 1.1% this week, the NASDAQ by 2.9%, and the S&P fell by 2.3%, so it wasn't a great week.

Given a little back, much expected, probably may even see a couple more percent, that 5%, maybe 10% correction somewhere in the shadows as we go into August. September and October, which are notoriously more volatility-prone months in the market, so we'll see as time goes on. Voters fear that the 2024 election could fuel another crisis of the democracy, well, if you followed anything in the last five years with Trump and everything else, it's going to be a spicy one for sure. Hopefully we won't see the outright riots and things that we saw in 2020, that was pretty terrible to see, but you know, most people say that it's going to be a wild one and it's already started with Trump being indicted again in Washington, D.C.

The war in Ukraine continues, Ukrainian naval drones attack the Russian Black Seaport, man when is that war going to end? What is the outcome? You know, only a few people have endgame in sight, there's only a couple ways that war can end, it's either Russia winning, Ukraine losing, Ukraine winning, Russia losing, or they draw some type of peace. It's interesting that in San Francisco, people are complaining about the driverless cars, the number one tech city says it's causing problems there, and they want to get rid of them, so we'll see how that goes.

Something interesting also, the Mississippi River is careening from floods to low water, so all the snow that melted in the winter caused all that flooding, well now some of the ports are seeing water down almost 20 feet, threatening commerce, and why is that important? Well, more delays of goods, mostly this time it's in the bread basket with corn and other bread basket items. So it's kind of interesting to follow, something to follow along that's going on. Also if you're scanning through videos, one of the things that are now is women embracing strength training and executing the pull-up, it's become the ultimate fitness flex, social media mentions of female pull-ups have amassed millions of views.

Are cat videos done? We'll see. Kind of interesting though, China has pleased their parents with a plan to limit kids' smartphone use. Parents can decide whether to impose the restrictions and could expand the time limits.

I think that's important. I know I have a teenager son, and if he'd spend all day if he could in front of the screen or in his virtual reality, and we have to limit him and his use. I think it's important. So those are some of the big things that happened this last week.

Some of the news, if you missed it, just kind of going over some of those top things. This week's topic is going to be about life insurance, why you need it, why you don't need it. And those are some of the things that we're going to talk about this week is life insurance and why you need it. So let's dig right in, and the difference between term and whole life insurance.

A lot of people get scared with life insurance when they talk to somebody or put a quote, they go, what is term? What does whole life mean? Well, term life is pure insurance. It's whereas whole life adds cash value component that you can tap during your lifetime.

Term coverage only protects you for a limited number of years, while whole life provides you lifelong protection if you can keep up with the premium payments. So hopefully I'll read that again. Term life is pure insurance, whereas whole life adds cash value component that you can tap during your lifetime. Term coverage only protects you for a limited number of years.

So you could buy five, 10, 20, 30 year terms. So that means at the end of those terms, whether it be 10 years, 20 years, 30 years, that's it. It's kind of like car insurance. You pay for it.

If you use it, great. If you don't, then at the end of the term it goes away, whereas whole life is kind of a way to save money. Also have life insurance. And as an investment advisor, a lot of times I will recommend term insurance versus a life insurance saving perspective.

I think there's better ways to get a return in the market. But that is a conversation for another day. All you insurance people out there that hear this, send me your comments. I'd love to have that debate offline sometime.

So a quick look at your life insurance needs. You know, you might consider a needs analysis to truly meet your objective. And what does that mean? Life insurance is not for you.

It's for those that you love and care about. And when you do a needs analysis, really it's looking at something like your home, your car, a child's college education. These are needs in your life for others, right? And life insurance is not for you.

You're going to be deceased. Maybe it's your spouse. But it really is going to cover anything in your life. So I'll start with the home.

And let's say you have a mortgage on that home. And let's say that mortgage is $400,000. Well you're going to need at least $400,000 of life insurance to protect your home for your family. So that way it covers your spouse and your kids so they have a home to live in.

Now they're probably going to have to pay taxes and have bills on that home. So you're probably going to need more than $400,000. And one of the ways to look at a needs analysis for life insurance is generally about six to seven years of your annual income. Now that may seem excessive.

You may only do it for two or three years. Maybe your kids are grown and this could be something for your grandkids. But once again, it's not for you. And the ways to do that, whether you buy term, whether you buy whole life, I kind of talked about those aspects, is how are you going to save?

Now this is a way for you to protect your family, to protect your future income. And life insurance is a way to do that. A better way to do a needs analysis, this process helps you determine the future of short-term and long-term financial needs of you and your family. Once your needs have been identified, you can design a plan to help assure that money will be available to meet those objectives.

Now what are some examples? Well what's most important to you? What are things in your life that are most important to you? How would your objectives be affected in the event of the premature death or disability of you or your spouse?

And is your current savings program or investments adequate to accomplish your financial objectives? A needs analysis is not highly technical, financial planning associated with business ownership or planning for the conservation, distribution, and coordination of wealthy individual assets. Rather, it's appropriate for everyone by assigning a specific dollar value to each item or need you want to provide for one. The needs analysis zeros in on what may still be required in terms of additional capital to get the job done.

Through specific questions designed to identify areas of concern, you'll be able to establish your financial priorities. Now your personal and financial perspectives for most people, needs typically revolve around attaining and maintaining a comfortable lifestyle. This often translates into a good home, the advantages of a good college education for your children, enough income left over for leisure activities, and last but not least, a retirement income sufficient to maintain your lifestyle when your working years are over. Now this is a high-level overview of life insurance.

You can give me a call. You can actually get a free quote on my website right away, but we can have a much further conversation on your needs and goals and how to make life insurance a part of it. While saving and investing will undoubtedly be part of your overall planning strategy, it takes time to accumulate a pool of capital. Yeah, it takes time to make money.

One advantage of life insurance is that it creates an instant estate. You know, like I said, if you have four or five hundred thousand dollars, something happens, you know, in life insurance, something happens to you, your family's going to get a check and it's going to come tax-free and they're going to be able to pay that mortgage. They're going to be able to pay those bills and these are some of the ways to do it. It helps assure that money will be available to aid in meeting specific goals in case of an untimely event such as an early death.

It deprives you of the time required for wealth accumulation. A complete needs analysis helps determine what is important in creating and protecting the lifestyle that you and your family enjoy. So once again, this is a high level overview of the life insurance and the needs and we can get and be specific what your needs and goals are through a conversation and that can be over the phone or it can be in the office, that could be on Zoom, however you feel comfortable. And then we can find out what levels of life insurance you may need in your family and for your family's needs.

Even if your current income doesn't stretch far enough to satisfy all your future financial objectives, the needs analysis process will help you establish and focus on your priorities. Me being your financial advisor, I can help you guide you through this comprehensive analysis to identify your goals and to show you how life insurance can help meet each of your objectives. By initiating a plan of action, you can create an estate that will provide financial assets should you no longer be able to do that yourself. And that is really the essence of that is once again, it creates an instant estate.

So when you make those premium payments, you know, once again in the whole life, it can put some money in savings, but it creates that instant estate where you have enough money. I should say your family or loved ones, the people that you care about will have an instant estate because let's say if you're in your 20s and 30s and you're out there and you're working and you're trying to accumulate wealth and something happens to you, you know, God forbid something happens to you. You want to take care of your family and this is really a way to do that. And this is all part of a wealth management plan through budgeting, whether you have a surplus or a deficit, making sure you have that emergency cash, you know, that three to maybe six months worth of monies to pay bills if something were to happen.

And then it's insurances. And then we got to really look at, you know, what's going to happen. Health insurance is really another day. I did a podcast with our Medicare consultant.

We're going to do a podcast with our healthcare consultant. We had someone on our podcast that talked about, you know, assisted living and in home care. It's expensive. You know, it's expensive and you know, insurance is just that.

It's there for when you need it. It's not there. You can't go out and get it when you need it. That's the worst time to get it, right?

So here in Florida, if we have a hurricane, well, you can't get insurance. They just won't write policies. And that's even the few carriers here that write policies anymore for home insurance. But life insurance is something that you can go out and you can get, and it just gives you a peace of mind.

You know that at the end of the day, if something were to happen to you or happen to your spouse, you know, a lot of families have two incomes. What happens if that other income goes away? Can happen in a flash. And you really just want to make sure that you're covered.

And maybe you say, well, you know, I can't afford, you know, two, $300 a month. Well, if you're in your twenties and thirties, it's going to be a lot less than that. Life insurance is something that, you know, the younger you are, the easier it's going to be to get the better health you're in. If you're in your forties, fifties, and sixties, as your health starts to deteriorate as you get older, life insurance is going to become more expensive.

Maybe you're healthy. Life insurance sometimes does require a physical. They want to know how you're feeling. And there's also policies out there.

They're a little more expensive. When I say expensive, the premiums are more expensive, but they don't require any medical. They don't require taking blood and blood pressure and all those things. And you can go out there and get them.

And they're available. You know, give me a call. We can talk about all the different options that life insurance involves. It can be very complex, but I will make it very easy for you.

Once again, if you want to get a quote just to see what's it going to cost me, there's going to be a link on the YouTube page that goes directly to my quote page. And you know, from those of you that are listening for the first time, my website's tdwealth.net. That's tdwealth.net. And you can go right onto our services page and you'll see life insurance and there's a way to get a quote right there.

So you can see how much it will cost you to get life insurance. So once again, it's not for you. I can't say it enough. It's for your loved ones.

It is a way to put money away. In my opinion, it's not the best way to make your money grow. It's a slower way, slower paced, rather investing in the market. But it is an essential part of financial planning and of your wealth management when you have family and loved ones that you want to take care of.

Once again, it creates that instant estate. I hope you guys found this useful, this information. Stay cool out there. It's still, man, ungodly hot out there.

But it's starting to cool off a little bit with some of the rain here in Stewart, Florida. It hasn't been 95, it's only been 90. So anyway, for those of you that have kids, good luck next week with the back to school. For those of you that don't and are driving around, just keep an eye out for those kiddos as schools start to open up.

It's important as the kids all come back and they're going to be around. So with that, I hope you have a great week. Thanks again for listening. Don't forget to like and subscribe.

And we will see you next week on the 1715 Treasure Coast Financial Wellness Podcast. Once again, my name is Thomas Davies in Stewart, Florida, and I am out. Thank you for listening to the 1715 Treasure Coast Financial Wellness Podcast. If you enjoyed this episode, share it with a friend who might like it.

And please rate, comment, and subscribe. If you'd like to contact us, find more information. Or if you'd like to keep up with us on Facebook, Instagram, Twitter, or LinkedIn, check out our website at www.tdwealth.net. Have a great day, and we'll talk to you next week.

Thanks. Bye. Bye.