Gary: Once again it's Gary Wong from garywongrealty.com.
I have Adam, one of Canada's most respected life insurance specialists here with me, and
I'm gonna ask him the most common mistake that policy holders often have when it comes
to buying life insurance.
Welcome back Adam.
In our last video, you shared the difference between mortgage insurance and life insurance.
And if you guys haven't seen that video, just click the I-button here.
So now Adam, tell me in your 40 plus years of experience that your firm has, what's the
number one mistake that policy holders have when it comes to buying life insurance?
Adam: Not having enough.
Gary: Tell me more about that.
Adam: I'll give you three different scenarios.
So one, when I was born my mom ran a daycare in our home.
And one of the kids that she took care of, her father was a logger.
And he ended up getting killed by getting hit by a falling log.
He only had his small little group policy through his work which was $25,000.
His wife had to now take care of this newborn child.
He had a home.
$25,000 isn't a lot.
So a lot of people when these big life events happen, like purchasing a home or having a
newborn child or maybe starting a business, they really should review their life insurance
coverage.
And look at, "Do I have enough for this moment?"
Another scenario is one where a business owner, he had another business partner, they both
ran different parts of the operation.
So he had one guy that was focused more on the financials, one guy who focused more on
the actual inter-workings of the company and being the key developer for a tech company.
Now the one guy that was the key developer, ended up getting a heart attack.
And he didn't have any life insurance.
Do you know how important that is, or what happened to that company now?
Gary: No, what happened?
Adam: Essentially it was worthless, 'cause they couldn't bring in another developer to
take over this guy's role.
So they had this unfinished product there that they couldn't sell.
So all this time they had both invested in this company, now there was just nothing.
So having life insurance there to have it part of the buy-sell agreement, or having
those key man insurance on that key employee, I think would have assisted them tremendously
in either finding a replacement or paying off loans of the company.
Or maybe potentially buying out those shares from the other guy's spouse.
This is the [written 00:03:10] value out of that.
And that's just one of the many stories I could tell you, there's many others I have
that come to mind too.
Gary: Okay.
So Adam, tell me, those stories sound horrible.
What can policy holders or ... Why do people make these kind of mistakes, and how can they
avoid them?
Adam: I think one of them is going to be budget constraints.
There's always people that don't want to pay more for their insurance coverage.
They may have bought smaller policies long ago, they might have group coverage, they
might view themselves as immortals.
Some people just view themselves as Superman, definitely younger, the younger you are.
So when it comes to your insurance though, there is serious consequences to those actions.
And I would say for a lot of people that have a young family, have a big mortgage, maybe
one person in the family is sole breadwinner, maybe the wife is the sole breadwinner of
the family.
There is other needs other than just paying off the mortgage.
You need things like income replacement, to make sure that the kids are well taken care
of, the wife has a period of time where she can have some financial stability.
And they're not destitute.
That's the worst thing I see is when I have to encounter clients that, either they didn't
buy something from me.
Like I have friends that maybe never made a purchase.
And those are the things I dread.
When I go to sleep at night is I worry that, "Man, maybe I should have talked to my friend
Frank.
Why didn't I talk to him?"
Gary: So Adam, how can people avoid this?
Adam: I think it's really important that you do have someone working with you.
If you don't have an agent anymore, because the guy sold you a policy 20 years ago and
you don't have someone working with you anymore, it's important to review those coverages at
different stages of your life.
There's plenty of times where big life events requires more insurance.
And I think for a lot of people, maybe they only buy a small little whole life policy.
And they don't view the importance of getting more term coverage.
And I think that's one of the most important things to me, is that if someone's had to
have $300 in their budget, I'm not gonna go, "Here's $100,000 whole life policy, that's
all you need."
I think it's really important that you have the money there to pay off the mortgage, you
have money there that can pay for funeral expenses, burial costs, final tax returns,
capital gains, the list goes on and on.
Income replacement I think is one of the most important and overlooked factors, with essentially
how much insurance you need.
And for everyone that has gone through a situation like that, where they lost someone really
important to them and they have got life insurance checked, they never say, "Oh, this is too
much."
They never ever go, "This check's too big."
Gary: Adam, that's great information.
As I know you are a professional insurance broker, and if people out there see this and
they really want to get a hold of you, how can they learn more about this topic?
Adam: Well, I think you definitely try and do your research online.
I know it can be very confusing though, all the different products out there.
The easiest step for someone is to try and find out where they can find an insurance
broker in their area.
That may be through their local chamber, or at a trade, you might even be able to find
more information just about through your local community.
Like who is the person you are using in your community, that you are talking to?
And I think more and more nowadays, people want someone close by.
They don't want to have to travel.
Gary: That's right.
Adam: Definitely more on mainland, not with traffic.
It's not so easy like it was in the '80s where you can just go 20 minutes from north Van
to downtown, that's like an hour commute.
Gary: And if they want to learn more about you, and what you do, and how you can serve
them, how can they-?
Adam: We have a couple of websites.
So the jungfinancialservices.com, that's going to be our blog, and you're gonna find a lot
of great posts, monthly posts.
Through Linked In you'll find me, Adam Jung, Insurance Broker.
Type that in, I'll be one of the first that come up for Canada.
And you'll be able to see quite localized in New Westminster BC, that's where I'm located.
I also have an office on the Sunshine Coast, I have an office in New Westminster.
So if you want to reach out to me, they can go through my cell, which is 778-229-1846
or my email, which is ajung@dccnet.com.
Gary: Okay.
So I'll put that information down below in the description.
Once again, this is the Everything Real Estate channel, where if you're looking to buy, sell,
invest in real estate, or maybe you work in real estate industry.
We are the experts, ask us the questions, post in the comments below, and subscribe.
And we will probably feature your question in the next video.
So if you haven't done so already, subscribe and I'll see you in the next video.
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