Sit down and map out your expected finances for the next ten, twenty, and thirty years each to understand a sensible amount of coverage. The number once question I get from folks is how much coverage they should have. I can’t give a fair answer until I know what kind of expenses and debts you’ll likely have in the future that a life insurance policy will need to cover.
As a part of our series about the “5 Things You Should Ask Before You Purchase a Life Insurance Policy” I had the pleasure of interviewing Ty Stewart.
Stewart is the founder and CEO of Simple Life Insure, an independent insurance broker specializing in life insurance. Based in San Diego but serving clients nationwide, Stewart is a firm believer life insurance is an essential part of anyone’s financial security but the industry can do away with its complicated jargon and outdated sales tactics.
Thank you so much for doing this with us! Before we dig in, our readers would love to get to know you a bit. Can you tell us a story about what brought you to this specific career path?
I knew pretty much since college I wanted to be in the insurance industry, but specifically dedicated to life insurance. For me, life insurance brings some serious peace of mind at such a low, low monthly cost to policy holders, more than most types of financial services out there these days. I view it right up there with saving for college and retirement in terms of financial priorities.
I also learned pretty early on in my work how many misconceptions there are about life insurance — what it is, who should have it, and when to apply. It made so much sense for me to dive into this field and open my own firm, one that’s carrier independent so we aren’t beholden to any one or two insurance companies. We truly work for our customers.
Can you share a story about the funniest mistake you made when you were first starting in the industry? Can you tell us what lesson or takeaway you learned from that?
So I’ll start out by saying I actually opened my very first life insurance policy for my now-wife, Marlo, before we were even engaged. Yeah, I’m that much of a planner. It’s only snowballed from there, with additional policies added and tweaked after the birth of each of my two children, who are now three and six.
None of these are “mistakes” by any means, they were quite intentional! But it is pretty funny to most folks when I share how early I got into buying policies myself. Most people don’t even know you can open policies if you’re not married or in a domestic partnership. I know how much I sound like I’m putting the cart before the horse here, but it really just goes to show how important I think life insurance is, and how long I’ve held that belief. This is way more than a career I stumbled into. I’ve invested in it, literally, from the beginning.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Is there a takeaway or lessons that others can learn from that?
Interestingly enough, I would say a big inflection point for my business came when I finally understood I couldn’t do it all myself. I needed to start outsourcing and automating certain business tasks, then trusting who or what I outsourced that work to, not constantly monitoring it from afar like a backseat driver.
It took me almost three years to learn you don’t need to be “the best” at everything, even if you’re the head of the company. In fact, you probably shouldn’t be. You just need to identify your strengths and shape your workday around those. For anything outside those immediate strengths, focus on learning just enough so you can identify top talent and the right-fit partners to outsource expertise. You’ll save yourself so much time and energy, plus keeps your workdays free to focus on higher-level objectives while experts in other areas take care of the rest.
What advice would you give to other people in the insurance field to thrive and avoid burnout?
Establish real work-life balance and do it early in your career. This is so important. People need to advocate for their ideal work schedules and hours rather than passively accept what they see others doing. Plus, with so much technology out there making flexible work schedules possible, there are fewer and fewer barriers to shaping your ideal work week.
People think I’m a bit crazy here too, but I practice what I preach here by waking up at 3:57 a.m. to get a jumpstart on my workday. I’m a morning person anyway, so scheduling the bulk of my day in the morning works for me. I’m efficient and productive and just in better spirits. Plus, it benefits my marriage, since I’m usually free starting in the afternoons to take care of household matters or watch the kids. This wouldn’t be possible if I had to adhere to normal office hours and locations.
Ok, thank you for that. Let’s now shift to the main focus of our discussion. As an “insurance insider”, you know much more about insurance than most consumers. If your loved one wanted to buy a policy from another person, which 5 things would you advise them to find out about before committing to a policy? Can you give an example or story for each?
There are admittedly several pieces of advice that come rushing to mind here. Life insurance is one of those things that really is individualized. Your age, job, lifestyle, hobbies, family health, and more play a huge role in how carriers qualify you and what you’ll end up paying for coverage.
However, these are the five core pieces of advice I give folks when shopping for their first policy.
(1) Sit down and map out your expected finances for the next ten, twenty, and thirty years each to understand a sensible amount of coverage.
The number once question I get from folks is how much coverage they should have. I can’t give a fair answer until I know what kind of expenses and debts you’ll likely have in the future that a life insurance policy will need to cover.
For instance, say you don’t have kids now, so a ten-year policy with a $150,000 face amount may seem like more than enough to leave a nest egg for your designated beneficiary. However, if you expect to start a family five or ten years down the road, you’ll want that policy to be able to cover everything from your child’s college to health care to a second or third family car to even helping pay for their own wedding expenses.
Only once you’ve mapped out what the future has in store, can you accurately gauge your coverage amount. Be honest and be detailed. The more thorough you can plan here, the better.
(2) Don’t just buy the cheapest short-term policy, forget about it, then make any needed adjustments once expiration dates roll around.
There are two main types of life insurance, term and permanent. The names are pretty self-explanatory. Term life insurance gives you a policy for a set number of years, usually starting at 10 years and going up to 30 years, whereas permanent life insurance lasts your entire life and starts the day you sign all final paperwork.
It may initially seem like a smart idea to go with a short-term, 10 or 15 year policy, then make adjustments once that policy expires. However, life insurance policies aren’t something you just replicate and renew over and over again. After 10 or 15 years, your life circumstances are going to be very different. From your health to your income and occupation to your family size and needs, adjusting that expired policy can may be correspondingly hard to afford, if not out of reach entirely. Then what?
(3) Research what’s known as policy rider options every few years, or after any major life events like a marriage or the birth of a child, to see if you want to incorporate these into coverage. You’ll also want to ask any carriers or brokers what riders are available with your desired policy to begin.
Few people know about life insurance policy riders, which are essentially add-on coverageyou have available to tack onto your policy if circumstances demand it. Riders vary considerably across carriers, though. What’s more, certain policies will include or outright bar some rider add-ons to begin with, so you should ask as early as possible what your options are to make the most of your policy.
There are four key types of life insurance riders to keep in mind over the years, beginning with long-term care riders to offset future costs of assisted living or in-home caretakers; disability riders which kick in if you become permanently disabled and can’t work and turns some of your death benefits into a monthly income; premium waiver riders which eliminate premium payments if you become permanently unable to work; and finally a children’s life insurance rider that allows you, a parent or guardian, to take out a life insurance policy on your child that they can actually access and manage when they come of age.
(4) Pay your premium annually or find carriers who offer fractional premium payment plans.
Like auto insurance, some life insurance companies will give you a discount if you pay your entire premiums in one go. Or a carrier may add maintenance and services fees if you pay month, which increases your monthly payment totals and really adds up over the years.
So if you can swing it, absolutely try to pay for your entire policy premium annually. If that’s not possible with your current finances — and that’s okay, by the way — consider looking into what’s called fractional premium payments. Fractional plans let you pay a higher bulk payment once every few months. For example, you’d make quarterly payments every three months, equaling four prorated total payments a year. This allows you to save a little bit more on fees than you would if you paid monthly. Also, if you can, make sure to set up automatic payments directly from your checking account, which most carriers will also give you a discount for.
(5) Avoid the “guaranteed acceptance” or “guaranteed issue” policies you often see advertised on commercials and online ads.
Guaranteed issued life insurance does not require a medical exam during the application. It’s often marketed as a quick and convenient way to get life insurance, sort of like a fast pass if you’re a busy adult or simply don’t have the time or energy to do a bunch of policy research.
Be careful, though. While skipping the medical exam seems convenient, or you may not want to take an exam for personal reasons, you’ll end up paying big time. No exam, guaranteed issued coverage will almost always have higher premiums, in some cases even double or triple what a comparable policy would cost you with a required exam.
However, there are two exceptions. If you have a pre-existing medical condition that would make it near-impossible to access traditional coverage at even average rates, then a no-exam policy is a no brainer. Yes, you’ll have to pay more in premiums, but it’s often worth it compared to the rates you’d be charged for that same policy after a medical exam.
The second exception may be if you find yourself in a situation where you need life insurance pretty much immediately, for example to take care of sudden medical expenses for an aging parent or child. Skipping the medical exam will shorten the underwriting timeline and instate coverage much quicker.
Insurance agencies or companies are often known to be very creative and innovative marketers. Do you use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?
Insurance as a whole sits at a bit of a branding disadvantage. Because let’s be real, most people don’t wake up excited about buying an insurance policy or signing loads of jargon-filled contracts and paperwork. Life insurance specifically also carries a bit of an added downer because it’s a death benefit, paying out after you or a loved one passes away. No one really wants to think about that, much less be aggressively sold to about it.
Because of all these pre-existing barriers, insurance marketers have had to put a lot of effort into humanizing marketing touchpoints. I do think smaller agencies and independent firms, so ones who aren’t tied to offering only one carrier’s policies, have an advantage here. They can offer more personalization and real-time human interactions via marketing and customer service, or just email or phone conversations answering in-the-moment questions.
Larger companies often must automate and segment so many of these touchpoints just because of their sheer size. That’s understandable, and they shouldn’t really be demonized for it. Just know when you actually have a policy question, want a policy re-evaluation, or maybe even need wider financial advice, you’re probably not going to get the same level of attention with a larger legacy brand. You might not even have a go-to contact to call.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I wouldn’t be where I am today without my wife, Marlo. I opened my business, Simple Life Insure, roughly 10 years ago completely on my own. It was our savings we relied on, our home I spent too many long hours and late nights working instead of getting to spend time with her. It involved a lot of sacrifices. I don’t think many people really realize the toll it takes on your partner when you start your own business, especially in the first two to three years. Your relationship will be affected, and sacrifices like spending time together, going on vacations, and even your household budget radically shift.
Marlo’s basically a rock star. She hasn’t questioned why I wanted to start my own firm and play such an active role in the business even a decade later and with a growing family. Instead, we both share values of working for what you want in life and dedicated yourself to self-improvement. We want to pass these values onto our two little ones. But frankly, I wouldn’t be able to practice what I preach the same way without her.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
This is a tough one. Professionally and personally, I wish there was a greater push toward personal finance education starting as young as elementary school. Financial literacy will only become more important in the coming decades, with things like college becoming more expensive and traditional retirement vehicles more unreliable, including the future of social security as we know it. I would love to see financial literacy made fun and more relevant, maybe through the use of apps and gamification starting in early school years.
How can our readers follow you on social media?
You can find Simple Life Insure on Twitter at @SimpLifeInsure and by following our blog, which releases new and updated articles constantly. You can also follow me on my personal LinkedIn account — feel free to reach out directly!
Thank you so much for joining us. This was very inspirational.
It was my pleasure. Thank you!