When a recession hits, the last thing on people’s minds is adding a monthly expense to their bottom line. In fact, most people try to figure out how to cut expenses instead of adding to them. Therefore, adding a life insurance policy to your budget may seem like an easy expense to avoid, but did you know that this type of policy can be a literal lifesaver if you and your family find yourselves under a financial strain? 

According to our partners at Frankenmuth Insurance, there are many benefits to having a life insurance policy, even during poor economic times. 

1. It allows you to support your family: Frankenmuth states that four in 10 households are not financially able to meet all of their expenses without a life insurance policy. If you or your spouse passes away, will you be able to meet the daily or future living expenses? Life insurance can help you cover day-to-day expenses and even pay for your child’s future education, like college tuition.

2. You won’t leave your family in debt: Life insurance will help you pay any outstanding debts. If you owe a lot or have credit cards when you pass away, your life insurance policy will help your loved ones pay off your debt.  Your family will also be able to continue paying the mortgage with life insurance benefits.

3. Get help now paying chronic illness costs: If you have a terminal or a chronic illness, you can potentially get help now while you’re still living under an accelerated death policy rider which will let you receive a portion of your death benefits to help pay expenses. You have to be incapacitated and unable to perform more than two daily activities without substantial help.

4. It will help sustain your business: If you are a partner in a business, a life insurance policy will help your business carry on should something happen to you.

5. It’s tax-free: These payouts are not considered income, so your family won’t have to pay taxes on the monies they receive. 

We know recession and inflation can place an undue burden on your household expenses. Even though you may not want to add another monthly payment, we highly recommend that you act now to protect your loved ones and in the future by exploring a life insurance policy. A Risk Consultant from our Life/Health Team can help you determine which policy is right for you.

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As we approach 2023, it’s time to take a step back and make sure that all of your insurance needs are being met and that you will not be hit with any unforeseen issues. For nearly 49 years, The Prewitt Group’s mission has been to expertly handle all of your risk management needs, whether personal or professional, with the utmost attention to detail and comprehensive protection from anticipated risk.  The following checklist will help you evaluate your current coverage as well as what adjustments need to be addressed for 2023:

1. Assess Your Policies and Coverage – Take time to assess your current coverage and make sure it’s current and provides all that you need for you, your family or your employees. It’s also a good idea to review your policies with your risk consultant to ensure you have the coverage you need should you have to file a claim. Your consultant will also offer guidance on policy changes and review what’s new in the upcoming year.

2. Check Your Health Insurance Policy-  The end of the year offers the opportunity for you to make adjustments to your current health coverage plans. Check to make sure that if you have recently made changes, you are aware of any changes in your plan’s coverage.

3. Check Your Life Insurance Policy– Have you recently changed your status? If you have recently gotten married, divorced, had a child, taken out a mortgage or changed jobs, you will need to review your life insurance coverage and make appropriate updates based on your current status.

4. Check Your Auto Insurance Policy- Check your auto insurance policies to ensure that you have the appropriate coverage. Take note of your policy’s comprehensive and collision coverage. Make sure you are not underinsured because being so can cost you more money in the long run.

5. Examine Your Commercial Insurance Policies- If you are a business owner, you also need to make sure that you have the appropriate insurance coverage for all associates as well as your locations. Have you added any new employees, added locations or changed something about your business? We highly recommend you sit down with your risk consultant and review all of your commercial coverage so that you can anticipate or minimize any risks going into 2023. 

We understand you and your business and what keeps you up at night. We use our power to mitigate risk so you can have peace of mind now and in the new year. We invite you to schedule a policy review with your Prewitt Group consultant so that you can feel at ease as we kick off 2023.

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By: David Murdock, Life Insurance, Healthcare and Group Benefits Risk Consultant at The Prewitt Group

Clients are often surprised by how simple and quick the process of purchasing life insurance really is. Responses like, “Wow! That was really easy,” or “That didn’t take long!” made me realize that people are often hesitant to purchase life insurance because they assume the process is time consuming and complicated. In reality, the process is straightforward.

The Process

First, complete an application, which takes 15-20 minutes, and then set up a paramedical exam. A paramedical exam is administrated by a paramedical group. They come and visit with you at your home or office to ask you medical questions and take your vitals. The results of the paramedical exam are what underwriters use to determine what type of risk the applicant poses and how they are going to offer a policy to the applicant.

Many people worry that a medical issue, even if it occurred years ago, will prevent them from getting life insurance. That’s almost never the case. It’s important to set those feelings aside and just step into the process.  The value of protecting your loved ones outweighs any hesitations about the process or the outcome.

The Value

Life insurance offers protection for your family and home in the event of your death. In fact, life insurance should be called “income replacement insurance.” Whether you are the single earner in your family or if you and your spouse are earning together, life insurance replaces the cumulative effect of your earnings. The importance of life insurance increases when you get married and/or start a family. It’s smart to acquire life insurance at a younger age, because you’re not only healthy, but you also pay the same rate over a period of time. As you delay the acquisition of coverage, you’re just gambling with the outcome.

The Policies

The most common type of life insurance is term life insurance, which lasts for a “term” of 10, 20 or 30 years.  The purpose of term life insurance is to provide enough face-value, depending on what your situation calls for, to replace your income for a period of time. While there are more complicated types of life insurance, they are more expensive and usually for individuals with extraordinary income who are looking for things to do with their income outside of the common expenses of life.

Getting a Quote

People frequently ask me for a life insurance quote to know how much life insurance is going to cost.  Just like every other agent in the U.S., I use an online quote tool.  I can plug in your age, gender, state of residence, the amount of life insurance you want, etc.  But, choosing a health class is a little trickier. While I can get some of that information from you, a quote is a very generalized idea of what that policy is going to ultimately cost. Instead of “getting a quote,” go through the process. Apply for coverage and when the policy is issued, you can adjust the face value to meet your budget once you’re approved. It’s that simple!

If you’re interested in learning more about life insurance, contact me today!

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Have you met Tyler Hudson? In 2018, Tyler joined The Prewitt Group team as an Employee Benefits Broker. He strives to create a better benefits plan that positively impacts a client’s or prospective client’s bottom line. When he is not working with organizations to tailor specific group insurance, healthcare and disability income products to their needs, you may find him travelling with his wife, enjoying lunch at Saw’s Juke Joint or cheering on The Tide. To learn more about Tyler, check out this Q&A:

Q: How did you get into the insurance industry?

A: Before The Prewitt Group, I worked at ADP helping companies streamline their back-office HR functions/software. I worked heavily with Benefits Administration systems, which eventually led me to a position as an Employee Benefits Broker.

Q: Are you seeing any new trends in the industry?

A: Yes, the only constant regarding the employee benefits industry is that it is always changing. One area in particular is employer-provided health insurance plans. On average, an employer now pays about $20,000 annually for a family health insurance plan. It is an upward trend from years past and the burden is being shouldered by both employees and the employer. Services for emergency room visits, surgical hospital admissions and administered/pharmaceutical drugs are rising, which increases the healthcare costs. My job is to help these organizations navigate through these rising expenses to find a better solution.

Q: What’s your favorite part of working for The Prewitt Group?

A: The people. I have a great working relationship with my colleagues and work with some very talented and caring people. I’m grateful to have great mentors who have helped me grow professionally. They have gone above and beyond to help me and take an interest in my personal well-being. I’m very thankful for that, and it makes it a great environment to work in.

Q: Who’s your biggest role model?

A: My dad. Unfortunately, I lost him when I was 18, but he was a great role model and a great man.

Q: Favorite travel spot/vacation?

A: I guess it would depend on the time of year, but my wife and I really enjoy travelling. In the spring and summer, we travel to Smith Lake and 30A often. In the fall, you can probably find us in Tuscaloosa and Bryant-Denny Stadium.

Q: Favorite spot to hang out in Birmingham? (Restaurant, park, brewery, bar, etc.!)

A: I’m a dive bar and BBQ fan, so I’ll go with Saw’s Juke Joint here. We live nearby and generally eat there a couple of times a week. I’m a huge fan of the Smoked Wings and Sweet Tea Chicken Sandwich but will give you an “off-the-menu” pro tip here – try the Loaded Baked Potato on a bed of French Fries served Roll Tide (With Red and White BBQ sauce) and bring your appetite.

Q: Hobbies?

A: I like spending time with family, playing golf, and attending sporting events.

Q: Anything you want to add about family, pets or personal life?

A: My wife, Kensey, and I got married in June of 2017. We are expecting our first child (baby girl) in a short two months! We also have a goldendoodle named Finn.

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