All right, Suzy Orman does a Life Insurance 101 on her show. Back in the day, we went back to the archives and found where Suzy Orman made her take on life insurance, and we're here for it. Life insurance was never meant to be a permanent need. It was never meant to be there for your whole life. I'm going to watch her clip. I'm going to give my two cents on her take, and this one will be a fun one. Let's talk about the need for life insurance. Life insurance was never meant... to be a permanent need. It was never meant to be there for your whole life. It was meant to be there during your younger years so that before you had a chance to build up your assets, to pay off your home, whatever it may be, that if something happened prior to when it should happen, when you're older, those who are dependent on you financially speaking would be okay. How much life insurance should you have? A lot of you, if you do get life insurance, you go, oh, $100,000 dollars is enough. I don't need more than that. But, you know. it'll get me through. You need to figure out that if you have $50,000 a year of income and that income supports a family and something happens to you, $100,000 of life insurance will only get your family by two years. That may not be long enough. So you need enough life insurance to generate, once it's invested, $50,000 a year of income. The easiest way for you to figure out how much you need is to take. the $50,000 that you need times it by 25, and that's how much life insurance you get. But you need to have far more life insurance in most cases than you probably have right now. What kind of life insurance? In my opinion, the only kind you should get is term insurance. Whole life, universal life, or variable life, again, in my opinion, absolutely unnecessary, so very expensive. Please look into term insurance. For how long should you have term insurance? Until your youngest child is in their 20s. After that, they'll be okay. You should be okay. Just think about that. Next, can we talk about what you need to know about beneficiaries of your term life insurance policies or any life insurance? So many times I walk up to you. I go, do you have insurance? And you go, oh, yes, Susie, you'd be so proud of me. And I go, who's your beneficiary? And you go, my husband. I go, what happens if something happens to your husband and he's no longer here? Oh, my kids. How old are your kids? Oh, three months. Five years. When are you going to get that children cannot inherit money if they're minors? So if you have a three-month-old as the beneficiary of your life insurance policy, the first thing is, what was your life insurance agent thinking about if you got it through a life insurance agent to even allow that to happen? But if that were the case, then you die, that money goes into a blocked account, and it's going to be a big... hassle to get that child to be able to get that insurance because he or she is too young. So the best thing you can do is have either a living revocable trust be the beneficiary, an irrevocable life insurance trust. If you have a lot of life insurance, so you don't have to pay a state tax on it. There's so much for you to know about life insurance and life insurance is absolutely essential. So you need to go out there, look at the quoting services that are there. See if you can find a great life insurance policy for a little bit of money. Term insurance is so cheap. It's not even funny. Can you just do me a favor? Can you just finally, can you just finally get it? Let's go to Maine. I love it. Susie, I would love to have you on the show and chat with you, interview you. And I very much think you bring so much energy. And so I just want to give you your flowers before I disagree with some of the points that you make. So first of all, I'm not going to make a huge comment around her point that. you know, permanent life insurance is like, there's no need. I find it funny that even she talks about the end irrevocable islet, like irrevocable life insurance trust. And she mentions for estate taxes. And it's like, Susie, like, do you, do you think people are using term insurance for like wealthy estate planning deals? So I just find it ironic that in the same video, and it's, it's only a few minutes, the same video when she's just like, there's only, you know term insurance is the only life insurance that you need, she literally mentions a talking point on why someone would use permanent life insurance for estate planning. But that's, I'm going to, I'm going to find another video where she actually picks apart why she hates permanent life insurance. And that will be a deeper, deeper video. So stay, stay tuned for part two. And if you guys find a video that you're like, Hey, this is a take that you need to respond to Susie. We'd love if you send that our ways, but Susie Orman makes three main points in this video. Number one, life insurance was never meant to be there for your entire life we're going to address that number two is how much money do you need and then number three she talks about beneficiaries so the first point that she makes is life insurance was never meant to be there for your entire life now she says this very confidently And I think there's something really profound and powerful when someone says things with conviction. But even though she says that confidently, that statement is not true. The concept of the life insurance has been around for a while. Technically, the concept has been around for hundreds and hundreds and hundreds of years. But in 1706 is wildly considered the first modern life insurance company offering a permanent life insurance based with pool of contributions. This is like when the first mutual... life insurance benefit came to term. And this was here to last for their entire life. This was permanent life insurance in 1706. The concept of term insurance was first invented in the mid-1850s, but really became popular in the 1950s. That's 200 plus years later. And in the early 1900s, whole life insurance was one of the main financial tools Americans used, say, for the future. I know that might sound crazy. It's Susie, Susie, Dave, Dave. I was going to say Dave Orman, Dave Ramsey would would say that that's maybe not what they like. But you may not like history, but that was that was very much commonplace. In fact, Ronald Reagan, in one of his talks, he mentions life insurance and that Reagan wasn't, you know, was a president that wasn't necessarily leading back in the day. But it was still when Reagan was president. or running for president, it was still very common. And one of the reasons was we have to realize that life insurance predates the income tax and the FDIC insurance. Again, sometimes it's hard for us to wrap our heads around that. So life insurance, when you say that it was never intended to be permanent, that's just not an accurate statement. Now, here's the point that I'll make. While I'm not anti-whole life insurance, I'm very pro term insurance. I don't believe that one is either good or bad. And I definitely don't think term insurance is a bad thing. In fact, I am a huge fan of term insurance. I believe even if you're using permanent life insurance as a savings alternative, as a protection asset, as something that you want to use to potentially bank with, whatever the terms are, I think in many cases, there's still a desire, a want, and a need, if you want to use that language, for term insurance. And so in other words, I believe term insurance is so valuable. that it fills that gap. And Susie's totally right. For pennies on the dollar, essentially, you can protect a big portion of your need or want or whatever we're going to call that gap between what you have and what would be missing if something happened to you during those working years. And so I'm a big fan of term insurance. In fact, I own convertibleterm.com because I'm a fan of term insurance that gives you the convertible option. So most people that come to us that get term insurance, we give them term insurance and give them the convertible option that gives them the ability to convert to a permanent policy if they want without having to prove insurable interest. So that's point number one on life insurance was never meant to be for your entire life. Disagree with that, but we can still come to a, you know, I'm not anti-term insurance. In fact, I'm a fan of term insurance and think it's a great product. And for many people, many people, term insurance should be the only insurance that they get. So I'm not even disagreeing with what Susie says. I just think it's so tough when you try to take that statement and use it for people that have more means or maybe have a desire to want permanent life insurance. I've said this before with Dave Ramsey, sometimes you got to stick to your audience and then just not give exceptions because people will use those exceptions that shouldn't, that shouldn't, and then use that as an excuse not to get life insurance. Hey guys, I just wanted to interrupt real quick. If you're watching this and have an indexed universal life policy, a whole life policy, have any type of insurance policy, in general and you're like, I want to know if I'm on the right track. I want to know if this is set up properly. We at Better Wealth want to help you. We want to give you a free policy analysis and show you, are you on the right track? Is there some things that you potentially could be doing better? And so we have a link down below that you will have access to. We would encourage you if you have a policy and you want to see if you're on the right track, check that out. And if you're someone that's watching this and you're like, I want to talk to someone maybe setting up a policy for myself or I have questions, we would love to serve you. You can also see link to have a call with someone on our team back to the episode okay the second point is how much money do you need so she talks about this this 25 times your income which is which again I appreciate her giving a tool or giving a framework on how to think about this so I again I want to give her her flowers for for for that because it would just be easy to say you need more life insurance but it's like okay Susie how should I go about this the tough thing about this though is She, in her own words, she says, if your kids are in their 20s, they, then you can drop your life insurance. That's essentially what she says. You don't need your, your need for life insurance. So what if you were. few years away from that time would you still need 25 times your income, you know, that's that's a really interesting thought so it's interesting on how she can be so absolute in one aspect But then maybe be not logical in another way So if you're gonna go about that that should be like the reverse engineer date so if you're gonna if if we're gonna pick a date on the calendar that we don't need life insurance for the simple answer is Take your income and get as much life insurance that you would need if you if something happened to you that your income, including inflation, would be able to be replaced from now to that date. So it could be a 30-year time period. It could be a 20-year time period. It could be a seven-year time period. If you want to take Susie Arman's advice around needs, and I wouldn't disagree with this, if we're just talking about need, we're just talking about need. We're not talking about anything other than need. That's how I do it. I would figure out the gap, and I would err on the side of having more life insurance than not, because it's like, it's again. But I would, at the end of the day, reverse engineer it. And if I need 15 years or 25 years, then I would take our income or, more importantly, the cost of what it would live our life and make sure that if something happened to me, the life insurance would be able to pay that. And you could, again, include a very modest investment rate if you want to factor that in. Now, I like this concept around want. Because when we get into a need, our mind goes into scarcity. It goes into this is an expense. It goes into, you know, that's what we look at it from. And there's this concept of human life value. And human life value is looking at the need standpoint more from a want standpoint. And human life value is what the value of what you're worth alive over your lifetime. Okay, so I think sometimes we can get emotional about this. So let me just take you out of the equation. And let's say you have a money printing machine that's in your basement, okay? You have a money printing machine in your basement, and it's printing out $50,000 a year with a 3% increase, okay? And let's say that this machine, if optimized, will work for 60 years, okay? 60-plus years, but we'll just say, because I'm trying to make an analogy here, that's 60 years. If you had the ability to insure this, okay, if you had the ability to insure this, would you, number one, just insure the bare minimum? Would you say, all right, I have this, but do I really need it to earn over 60 years? No, like my kids, like maybe I'll just insure, sure, if something happens to this machine, I'm only going to get, you know, maybe 20 years worth of value. Because that's, at the end of the day, our family doesn't need that. Versus if I had a machine like this, and it was like, again, dirty words in our space, but guaranteed to produce money over time, $50,000 with a 3% inflation. I mean that's a big, big number at the end of the day. I would ask the question, okay, how much could I insure this for and could I insure it for up to six years? Because if that's the case, then from a planning standpoint, that's almost… Again, I'm going to say the word, a guaranteed thing now I can plan for. And so obviously when we think about it from a machine standpoint, we might be less emotional about it. But when I think of someone's ability to earn money throughout their life, I see that as your greatest asset. Your ability to earn money, create value, is your greatest asset. And while we insure boats, while we insure cars, while we insure homes, while we insure all these other assets. I mean, people are putting insurance on their... phones and most of the most of the time maybe other than your house these these things are depreciating they're getting less and less valuable and we're still insuring we're still insuring those those assets A lot of times we're not valuing our ability to create and earn. And it could be because it's tied into our death. So we could say, well, if I die, I'm not able to reap the benefit. But it's unfortunate because if we thought long term, if we thought multiple generations and we were unemotional about it, we would look at our ability to earn income as just a money printing machine. Some machines are a little bit more efficient. Some machines have greater upside than others. Some machines are going to work a lot longer than others. But at the end of the day, It's a machine creating cash flow. And a lot of times we will insure assets that will go down in value, but we won't insure the thing that is printing money. That's the thing that I just want to address. And so the question should be, how much money could we get in that scenario? And then the same thing about, you know, when do I have to stop? It's like, how long could I insure something if that was the case? I know it's a different mindset. And again, when it comes to planning, it's a cliche for a reason, but it's like, you know, death and taxes. It's cliche. But at the end of the day, taxes may or may not be something, I mean, most people are going to have to pay taxes, but death is something that's guaranteed. Like, it's something that's going to happen. And so if you know something is going to happen in a planning phase, there's an argument to be made that you can use that date, reverse engineer it, and actually get a better outcome for planning. It just may or may not benefit you. I believe it can benefit you. If you follow our channel, you believe that life insurance actually can benefit you while you're alive. but just It doesn't necessarily, like, if you think multiple generations, it could for sure be a no-brainer if you think more than just yourself. That's all I'm saying, making a way too, I'm talking way too much for this point, but I think it's important around this concept of need. Even Susie Orman started about the concept of need, and that's where I'm going to give her grace on this, because if we're having a need conversation, I don't necessarily disagree with her other than my point that I would say it's like, why 25 years if you don't need it? But 25 years is a good starting point. And so the last point that I'll make is on beneficiary. And Susie Orman very passionately calls out people that don't put a lot of thought into what they're going to do, especially putting their kids as beneficiaries. And if your kids are under 18 and you and your spouse or the person that was your primary beneficiary pass away, we're in a pickle. Your kids under the age of 18 cannot own money. And so there becomes a problem. and if you don't have proper estate plans or trust set up. the state ultimately will decide what happens with your kids and your money. It's a bad situation. And so the ideal scenario is the primary beneficiary is either your spouse or the co-parent or somebody who you care deeply about. There's benefits of having a person being the primary beneficiary who's over 18. There's some speed there and there's nothing, there's nothing, no problem with having a primary beneficiary being an individual. If your kids are under 18, the contingent beneficiary. This means that if the spouse or your primary beneficiary is not alive, if and when you pass away, then it's going to go to the contingent beneficiary. And the contingent beneficiary should be some type of revocable or irrevocable living trust. It should be a trust that you set up. You should name that trust as the contingent beneficiary of the life insurance. You should set rules inside the trust and appoint trustees and do all those good things. And it's just one of those things that you should do. I know it's something that we may not love the feeling about. You may think that you're going to live forever. But if you have young kids and you've not done something like this, I would plead with you to take some time and get this set up and be very thoughtful about who's going to get the kids, what's going to happen to the money. Do you want your kids to have all the money at 18 or do you want to have it spread out over time? Do you want to create some stipulations from a standpoint of? of what needs to happen with the kids if they get this money because I again I don't think some kid who's 18 or let's just put it this way not all 18 year olds would thrive if they were just given a bunch of money so there's some definite planning there and if you're watching this and have questions about your own estate plan to say like I want to have someone review my estate plan or you don't have an estate plan that you want someone to talk with we will have a link down below we can help you review your estate plans we can also help you set up your estate plan for your family. And so if you have questions, we'll have a link down below for more details and you can talk to someone about the team as it relates to that. Overall, I am actually good with Susie Orman's take on insurance because again, if I have to take a step back, she's not talking about our main demographic of people that we're speaking to. We're talking to entrepreneurs, credited investors, people that are using life insurance as a tool, of one of many tools to keep protect and grow their wealth and they're using maybe different trusts. They're using it to reinvest in other assets. They're using it as a volatility buffer. They're using it as an asset, but they're usually able to allocate a portion of their assets and they're seeing it as an overall strategy. Suzy Orman's not talking to these people. In fact, I would make the argument that Suzy's audience may be... at Dave Ramsey's level or actually lower. So I'm like, if you even watch her show, a lot of the questions that she gets are like, can you afford it? And she's pretty much like summary of like, no, you can't afford it. No, you can't like, so at the end of the day, like she's like telling people, like she's keeping them in check. And a lot of those people should get life insurance. A lot of them are underinsured. A lot of them don't have any insurance. And if something happens to them, their families are going to be in trouble. I have no problem with her passion. I have no problem with her passionately. saying that you need life insurance, I'm for it. And I think at another time, I can rate Susie's permanent life insurance review on something where she maybe goes into more detail. But at this point, that is my take, and I'm sticking with it. I would love to hear your thoughts. And yeah, is there a point that you think that I should better clarify? Is there something that you think Susie said well, like... These, reading your comments really helps me figure out what to do more videos on. And also, if there's a video that you see on TikTok or Instagram or on YouTube that you want me to review, please let me know because with the people that let us know videos that I tend to look at them in a lot of cases, videos that you recommend me to do takes on, I will do takes on this channel. And so again, thank you for all those that you've subscribed. Thank you for making this possible. And we'll see you on the next video.