What Insurance Do You Really Need For Your Family?

Episode 36 · June 30th, 2020 · 50 mins 13 secs

About this Episode

Brian Haney, VP of The Haney Company, talks all about life insurance and how each type can benefit your family in many ways you probably don't even realize!

Resources mentioned:
Paycheck Budget Spreadsheet www.budgetsmadeeasy.com/spreadsheet
When: The Scientific Secrets of Perfect Timing by Daniel Pink (aff link) https://amzn.to/2AfnayF

Full Transcript:

Welcome to the money mindset podcast, where you will find the inspiration and motivation. You need to manage your money better. So you can stress less and live the life you want. This is Ashley with budget, sweet, easy in the money mindset podcast. Today, we are talking to Brian Haney, who's the vice president of the Haney company, whom he deals
With all things insurance. He also has a podcast that's called that's my financial guy. So you can go listen to him as well. But before we dive into his interview, that is all about different types of insurance that your family needs, and some benefits and pros and cons to different insurance policies.

Go get the Paycheck Budget Bpreadsheet, so you can get started on managing your money better so that you can get all these little financial things in order so that you can live with financial peace. And that's what insurance also gives you. It gives you financial peace for your family, so that you know, that, you know, heaven forbid, something happens to you that your family will be taking care of.

So let's welcome Brian, and jump into all about insurance. Hi Brian, thank you so much for being with us today.

Thanks for having me. I appreciate it.
And we're going to dive into insurance and different kinds that you need and maybe some that you don't need. But before we jump into that, can you kind of just kind of give us a little bit of background about yourself?

I'd love to, so I've been in the financial business for really the majority of my career. She's 16, 17, 18, many, many years, but just, you know, a couple interesting twists and turns to my life. I, I studied journalism in college. So, uh, and I graduated early with a BA in journalism and kind of, you know, had aspirations, I guess, to be the next Tony Kornheiser or be in sports broadcast or who knows what, um, and came back to where I grew up, uh, Washington D C area only to realize that essentially the journalism journalism industry is not maybe as a straight path towards stardom as I would have liked. And so none of those kind of opportunities popped up unless I wanted to live in the closet for the first five or six years of my, my adults. So I quickly became open to other, other possibilities and actually, uh, got an opportunity to, to become a, a licensed banker and a private banker.

And so that kind of helped me establish, I mean, that was my entree into the financial arena and it also helped me, um, get a really solid foundation that I think, and I sets me apart now many, many years down the road because having understanding about deposits, loans, um, investments like having all of that really understanding all of those various components, I think really adds significant value. So, I mean, I've coached people on setting up checking accounts and, you know, all the ins and outs of every kind of credit product shake a stick at. So, Mmm, that helps now just current day. Uh, I work with my, my father and my younger brother. We, uh, uh, are the three principles of the Haney company, which is a multi multiline, uh, kind of financial services company. And actually the majority of our clients are concentrated in the association industry.

It's probably 70% of our clients. So it's a pretty interesting industry target. And we do everything from benefits, retirement plans, commercial insurance, property, and casualty. And then, okay, we work with, you know, the executives kind of families. And that's where we kind of do individual things, whether it's insurance or financial planning or investments and that kind of stuff. I also work with them also work with business owners. That's the second kind of minority concentration, um, and business owners of all walks of life. So that's the other part that's, you know, a lot of fun and I've kind of specialized in along the way.

Yeah, so you help businesses kinda like figure out their, um, packages to like offer their employees and things like that. Yeah. That's probably one of the biggest things that we do when we work with a business.

You know, I mean at first of all, I love stars. I love a business in any stage, but, um, I think in the kind of the business owner in the passion alignment for me is really seeing a business kind of go through its life cycle. And, you know, it's, it's analogous almost to a child that grows up and, you know, it goes off to college and gets married. It's, you know, you get to see owners and, and, you know, small to medium sized companies that just have incredible passion and see their ideas come to fruition and then, you know, and help them kind of walk through that experience and make it as successful and profitable as possible. And that's Mmm. So it's just a lot of fun, you know, I mean, anybody that has the creative element to being able to be in the financial business, I think has a good appreciation for, for that particular type of a relationship. Not that associations don't have their own beauty and awesome newness to them, but, you know, they exist apart from the people that work for them and run them. So that's where I have a special place in my heart for the, for the solopreneur and the small business professional.

Oh yeah. Cause it takes a lot to run a small business. And especially when you're trying to navigate insurance benefits
For your employees and stuff, I can imagine it's a very different than, you know, a large scale business or corporate corporation. So I'm sure it's really interesting to see that growth too, you know, like seam from starting out to, um, growing and becoming successful. Cause, uh, I can tell you from owning a business, that's a stressful journey, but it's fun now. No, it sure is. And you're right.

What do families need to know about different kinds of insurance, but let's specifically talk about for now life insurance. Like what do families need to know?

So it's a fantastic question. And when I talk about insurance, I try to, you know, first of all, I, my, my joke used to be in certain networking events that, you know, I was an interpreter and people would be like, Oh, what language do you know? And I say, no, no, no, I, I interpret financial ease into English. And that's that couldn't even be more appropriate than when it comes to insurance. I think insurance in general is certainly highly misunderstood. It's not something that any person in any walk of life kind of, you know, there's not an educational course that you take in college that makes you equipped. Um, there's, there's really a lot that that's just missing in general educational circles. And you know, you don't roll out all of a sudden, you know, you turn a certain age and now you've figured it all out.

So I try to just, you know, I try to talk about, um, the function of, of, uh, you know, of insurance or really kind of any financial instrument, because that makes it, I think, real and personal. So when I, when it comes to, you know, a family, a, you know, a married couple, maybe with kids or early stages of life, the hopes, dreams, and aspirations at that family has to grow up, roll together, see the kids off to college and all the other stuff. That's kind of the lifestyle framework that they are operating under. And yet we live in a, you know, a crazy world. I mean, we're in this COVID-19 pandemic crisis now as, as a unfortunate current day example of just the kind of stuff that can come out of nowhere. And so there's a risk to that lifestyle, to that dream that if one of the two parties doesn't make it home for whatever unfortunate reason, everything about that family changes.

And so that's life insurance, I think in very, very practical and real terms, life insurance to me is really about the relationships that we value the most and what we would be wanting to be the best scenario that had we lived had I lived, had my spouse live, or we would be working hard to see that play out life insurance should come in then and at least provide for some sort of a financial means to try to have that play out since unfortunately that party is no longer going to be there to do it themselves. And so I kind of want to just start there as, as a, you know, a beginning framework to connect to something that can seem very arbitrary. Um, I don't think it is at all, I think is probably one of the most personal things that a couple, um, can really be considering because of, and I can say this, unfortunately in, in, you know, as many years as I've been in this industry, I've had to walk through delivering death claims and I've had even personal friends, um, pass away well before their time.

So I've just seen too much to feel like I can water it down at all. Like, it's, it's really important, powerful and meaningful. Absolutely. And whenever like my husband and I, um, we're figuring out like how much life insurance for us to get, um, you know, we figured out, okay, well, how much would we need for, to cover, uh, to pay off the mortgage and you know, how much would we want to say for each kid for college, you know, still have, you know, all those things covered and you know, the other one not have to go back to work right away if they don't want to, you know, all those kinds of things. And that's, you know, just kinda like what you said, um, what our longterm goals are and still be able to accomplish that. So that's kind of how we came up with our number as well.

So is there a number that you recommend, um, families to, um, shoot towards? I mean, of course I'm sure it depends on like their health conditions and age and stuff and what they can actually afford for life insurance, but is it, you know, is there like a standard number, like 10 times their annual income or just, you know, a baseline, a million dollars or something like that? Yeah. I mean, it's, it is the perfect follow up question and I, you know, actually I think you you've touched on a few Mmm really helpful measuring rods that, that kind of give some of us a tangible example, but the reality is that every scenario is a personal a decision. Um, because obviously we're all going to have different means and different goals and desires. And so, you know, I commonly say these are some of the components that traditionally are considered when you're coming up with that value.

So I think it's more important just to think of it in terms of how you might go about doing the math rather than having a particular number or threshold in mind. Cause that makes it a lot easier for you to know, frankly, once you come to the number, how you got there. And so, um, and, and by the way, just as a total aside, but something that can be very interesting for somebody that's, you know, wanting to Google weird things, the, um, you know, a very, Oh, I opening place to learn a lot about life insurance, really the replacement value of human life is, um, with wrongful death attorneys, because of that part of the legal industry, their entire job is to quantify somebody's life. And it is amazing what, you know, what it goes into that kind of a calculation that Ben has to go to a courtroom setting and, you know, is, is and subject to, um, legal proceedings in terms of what the financial recourse is in a wrongful death.

And it's unbelievable. So if you really want to, you know, get a crazy number and see how scientific you're going to be about to check that out, but, you know, two more rational, realistic ways to go about it. Um, you know, that there's that lost earning the capacity that I think is the big, um, wrapper that goes around this. And so, you know, common ways to come to numbers. Well, how many years might the earning person that we're, you know, you know, whether it's the spouse, husband, wife, it doesn't matter. Mmm. How many years might they be working? What's their current compensation. And then you can create, you know, a framework for that projecting that out. And then, you know, some other things that again are commonly into the consideration that help you quantify this, certainly any debts that you would, you would want to pay off, always a good thing to have, um, uh, you know, in mind and again, yeah, the, the expense of college, which, uh, in terms of things that have outpaced inflation is, is one of the top of the list. Cause the cost of, um, you know, college education is, is

Crazy these days. So that's sometimes a number that number in and of itself can be bigger than what you got to pay off in terms of your mortgage balance.

No kidding. I did a mortgage calculator the other day for all three of my kids and my youngest is two. So I mean, it was insane. I'm like, there's no way I'm ever going to be able to save that much for three kids. It was crazy. I don't even want to think about it.

Yeah. It's yeah. It's not fun. And yet it is. And then we all just cross our fingers as parents and hope that they'll get scholarships and not have to worry about
Yeah. Like the guys you're going to trade school. Cause that's all I'm going to be able to afford my man.
Yeah. So, I mean, those are, those are kind of the, you know, the, the three most significant threads are replacing, lost earnings, you know, handling any kind of debts to create the best kind of cashflow scenario for their surviving spouse and kids. And then certainly the most significant expense outlay is, you know, wanting to make sure your kids have the funds to go to whatever school that you would want them to be able to go to. And I think that, that, you know, pulling that all and seeing what kind of a number, uh, that equates to, and then like you said, well, all right, now that we have kind of an idealized number, how do we look at the options for protection and what types of life insurance might you want to be considering? And then that also might, you know, again, depending on underwriting and expense, you may move the number. Um, if that, you know, if some of the costs for, you know, the full amount of protection maybe seem, uh, out of reach or would hurt your budget and wouldn't allow you to do other things financial, because you should never have, you know, I'm sure you see this a lot. You should never have a number for insurance that literally makes it hard for you to do other really, really critically important things in your budget. So, um, making, making it have the right space in your budget is, is very key.

Yeah. We, whenever we were looking at, um, life insurance policies, like for my husband, it was pretty expensive. Um, cause he's a bigger guy. And so what we ended up doing instead of like a normal 20 year term, we ended up having to do 15 years so that we could have the amount that we wanted. And then the, you know, with the goal of like saying are more at the, by that 15 years, our mortgage would hopefully be paid off. Um, and so we'd be a little bit more covered at the end of that term. So, um, just like you said, we kind of took in the, the figure was more important, um, than necessarily that five year gap. So that's how we, um, figured that out. Now we know you mentioned like, um, replacing loss income. Now what about a stay at home? Like if somebody is a stay at home mom or a dad, um, do they still need life insurance,

You bet. And, um, and by the way, kudos to you all for making sure that you kept the right number. Cause I think I agree and that's so important. Like the, the amount of protection I think is, is the most important thing about it. So, you know, figuring out how long you have that is, is oftentimes a secondary consideration when you're juggling it. So that's, that's great to hear and, and, you know, um, the idea that because a spouse doesn't have an income that they pay taxes on means that if they weren't around that they don't have some sort of a residual value is crazy. Cause I can tell you my amazing wife, who's been, um, you know, who stayed at home for awhile. She's raised our amazing daughter and is now, you know, we've been homeschooling her for the last two years and just being, I mean, just been incredible, but what it would take for me to function to replace her [inaudible] is probably a bigger number than I even like to think about.

And so I think [inaudible], you know, when, when you don't have that inherent income number to try to, which is usually a big part of that baseline, then it's still important to consider really the lifestyle that you're going to perpetuate. And in some respects, if you want to get a more, you know, a strategic number, depending on what your kids are, I mean, you can start to look at what's the benchmark for a full time live in nanny or something like that. I mean, if you really are that concerned about coming up with a number, go ahead and use that. Not daycare use a live in nanny and what that would cost an okay. Or something like that. You'll find out that that's really, you know, it's a full time salary in and of itself. If you're trying to now have to unfortunately replace, you know, your, your spouse.

So, you know, um, I absolutely, you know, my wife has a healthy amount of insurance on herself just because, you know, I, I would, I would easily be lost without her, but then also there is, there would be a significant financial burden. And I think a lot of times that's probably an area where I find, um, couples maybe, uh, I would say, yeah, make, make a mistake in not recognizing both parties as equally as they should. And it's not to suggest that you certainly don't need to have the same amount on, on, on each person. But, um, you know, I've, I've seen a lot of times where the, the, you know, the income that the working spouse loads up and then literally has little to nothing, um, for the stay at home spouse. And that's a real significant risk because forget the money. If you play the scenario out, what would happen if God forbid something happened to the say at home spouse, the impact to your lifestyle and your ability to continue earning the same way that you were when you know that spouse was still there running the show is, is night and day different.

And so the reality is there is a significant financial impact. And so it is, it's really important to make sure that you assess both sides of the equation. And there again, you know, you can find some easy ways to quantify that and come up with a number that is reasonable.

Now, what about, um, people that have life insurance through like their job, is that enough? Or should they get like extra life insurance?

Also a fantastic question. And, um, I always kind of in, in most of my client interactions, I kind of consider life insurance through work of bonus. And so can it factor into your total calculation? Yes, it can, but the reason why I consider it a bonus and what I mean by that is that you don't want to count on it is this because you don't control that policy. The employer does. And, and, and frankly, I don't like trying to use current day stuff as almost like a scary example, but you know, in, in this pandemic, you are seeing a lot of small businesses now being significantly financially impacted. And so business owners are having to look at the benefits and the cost of maintaining those benefits. And, you know, maybe if they have had, you know, disability and life and medical and all the other stuff, and they're trying to save money, they could turn around and say, well, look, we're going to try to continue medical, dental, and vision, but we can no longer do disability in life.

Cause just, we need to find ways to save money. And if that happens, then that coverage is gone with, you know, you did nothing to participate in that decision. So, you know, um, I just think it's very important to know, um, how, how that should factor in, but how much credence you actually give that. Cause sometimes you might have a generous amount. Maybe you have, you know, two times a good salary. And so the number can be a very real number. Um, but I just, you know, I don't, I counsel most people don't put a significant amount of emphasis on that because there's so many ways that that can change that are a beyond your control or just, let's say you change jobs and all of a sudden what you used to have, you don't have it, you know, so there's, there's just, um, there's too many variables that make that, that particular part of your benefit, something that's, you know, hard to really count on as rock solid for a long period of time. So, you know, I, I, I tend to say take it a diminimous amount. Um, if you want to factor it into your calculation and say, well, at least I have this much, it counted in this way. So not to spend that's and that's viable and that's, and that's important. But, um, I just, I don't, I don't like setting people up to overestimate how beneficial that can be. Cause again, I've seen it unfortunately too many situations where you know, it, it wasn't enough or it wasn't what they thought it would be.

Yeah. And with, you know, so many people losing their jobs right now. I mean, that's that insurance is instantly gone and then you don't have any coverage. So, so what kind of life insurance should like the average family get or does it kind of just depend on their situation?

That's an awesome question. And I, and I like, um, I like answering it in terms of understanding a little bit more about the financial instruments and how they can function because there's really two types of life insurance. Um, so I'm going to paint and big broad brush strokes, and then I'll try to get a little bit more detailed, the two main types there's there's term insurance. And I think the easiest way to look at term is we, you know, we understand a mortgage, right? It's a certain dollar amount that we have for a stated period of time. That's a great way to think of term insurance. You have a stated benefit amount for a stated period of time. Um, [inaudible] probably, that's the best way I think, good to use that type of policy is to assign it and align it with something that, you know, has, you know, a start and an end, because then it makes total sense why you would, you would match the insurance to that risk.

Mmm. Permanent insurance comes in a lot of different forms, so that the two main ones though is his whole life insurance. And then there are variations of what's called universal life. Um, and there's a couple of different types of universal life. And I, you know, I think it would be a, uh, you know, an entire other session for another it again and all that. But permanent insurance is, is valuable in a couple of ways because it goes beyond now just being about this death benefit that can get paid out to someone else. Now it's also a policy that, that actually becomes an asset and builds value for you. And there's a lot of reasons why that in and of itself can be very valuable and important, um, as well as just the need for having coverage. Because I think a lot of times the average family that I know underestimates how long they're going to need insurance for and how much they're going to need, because we kind of think, you know, it's very natural to think everything's going to play out this way that we hope it will.

I'll make more money over my earning years. I'll pay my mortgage off. My kids will go off to college. I'll be an empty nester and I'll have a ton of assets and I'll be fine. Right? That's the most common thing that I'm told. And that's an, and again, I hope to God that that plays out and, you know, many times it might, however, that doesn't mean that the need for life insurance goes away, even if that plays out. And so I think that from the insurance standpoint, it's just really important for families to understand that your insurance needs your life insurance needs will change over time and you can change the types of policies that you may have or the structure, but please don't, um, think that, you know, at some point you just don't need it anymore because the reality is that that's probably not the case.

So you, you, you may very much want to consider at some point, keeping at least a certain amount, you know, kind of in perpetuity until you die. Which since, you know, I left my crystal ball at the shop. I don't know what that date is for me. Probably not for you either. So most people don't, you know, most people don't have that in mind. So therefore you do need to have something that'll last as long as you do, but I want to, I want to take a very brief moment just to talk about the asset component of permanent life insurance, because this is where there can be a lot of times where this is an opportunity we're insurance becomes a vehicle that allows people to actually save successfully for other things that they might otherwise be saving for apart from life insurance. This is where if you structure it correctly in the right circumstances, life insurance can actually be a very helpful vehicle in somebody's financial framework.

Um, because you can use the way that it grows as, you know, an asset that then, you know, maybe some of those funds get used for college expenses, um, or, you know, a wedding down payment or what have you. So, Mmm. There's a, there's a significant, uh, argument in case that can be made to, to also find value in using it as that type of a financial asset and a resource, um, for intermediary purposes as well as retirement. So it's, it's a very valuable, valuable, and an underutilized asset. So how does that work then if it's kinda, if you're able to take money out of it, but it's also life insurance. Like if you take the money out, does that reduce the death benefit or is it kind of like two things in one it's the, it's the wonderful, my favorite asterix, it depends, right?

It depends. So what I mean by that is it depends on how you structure the policy and what type of a scenario you're taking the money out in some of the basic components to what that looks like though. Um, and I, and I do want to, you know, I'm not a CPA, I just play one on TV. So there's there's tax components. Um, that the way that cash value life insurance is treated from a taxation perspective. It's very similar to how I Roth IRA is treated. So the funds that get built up, you're not taking a deduction for the money that goes into an insurance policy into a life insurance policy. However, when you take those funds back out, um, especially up to that kind of principle value, that's all tax-free back to you. It's a return of, they consider a return of principle and that's, there's a lot of value in that, right? From a tax man.

You can borrow against the policy so you could take out a loan and again, then you're taking out a loan against your own asset. So that there's value in that if you wanted to use it that way, you can, um, you don't necessarily have to pay those loans back loans against the life insurance policy are also considered tax-free. So, Mmm. You know, the, the main structures that really make this helpful is, you know, I can take a, I can take as just a regular cash distribution out. And assuming that, you know, the amount I've put in is still more than the amount I'm taking out. I don't, I shouldn't have a taxable consequences of doing that depending on how much is in there and how much I put in there could be some impact to the death benefit. And so that's why you really want to you of want to know what that all looks like, and you want to be mindful with how it's structured, but that doesn't mean that that makes it a bad scenario.

It just means that that's, you know, you're taking some of the policy values out that have, you know, also that carry with them and assign portion of that death benefit value. So, you know, that's part of the trade off, but it doesn't mean that it's, you know, it's a bad way to use it. Mmm. But there's a lot of more affluent people and clients that I work with on a regular basis now that really because of that tax component are, are, are using life insurance in a very strategic way. So may make sure that they maintain that, that need in, in perpetuity, but really as a, is that an after tax way to build wealth, because unlike a Roth IRA where you can get phased out of it, there's no cap. Um, so you can really use it as a strategic vehicle to build a lot of wealth, uh, and have it the, in a tax advantage, um, bucket that then you can turn around an access and retirement. And the coolest thing I like to tell this story, because most people don't understand

In the retirement scenario for life insurance, if you structured the policy correctly, which is which most people have, then the policy gets to what's called a and I hate using terminology. It's called paid up. That essentially means that the policy has enough value in it, that it should be able to self fund or self perpetuate, whether you put more into it or not. That's a very cool place to get to, because what that does is that unlocks part of the death benefit for you in a very strategic way in life. Insurance is the only financial instrument where you get access to, okay, a bucket of money that you didn't have apart from the money you put in.

So the death benefit of a life insurance policy is really just a promise to pay someone a set of money, right? That's someone can be your beneficiaries when you die, but it can also be you while you're alive in the form of accelerated loans. So that's why the power of it is an asset is that you can access the bucket of money that you built into the policy. That's your cash value, but in retirement, you may also be able to start to draw down that death benefit as well for income purposes. Mmm. So it's just, it's really awesome. Uh, I know I've probably spent a lot more time on that than you might've wanted me to, but I, I like to talk through these things because I find that these are very commonly misunderstood or things that people didn't even know about life insurance.

Yeah. I mean, cause I've never heard some of this and, you know, uh, whole life or, uh, I keep forgetting what you call it, cash value, life insurance, like it has such a bad rap. And so I was curious, uh, you know, why, why, what the benefits of it were. So can you just kind of talk about what are some of the common misconceptions about it? Cause I'm sure that there are, um, some out there you've probably already kind of touched on.

No, there definitely are. You know, I think, um, I'll try to touch on maybe three. I think the first one is if, if, when you're talking about the difference between term and permanent insurance, if you just consider the premium as the cost and that's what you're then comparing term and permanent, that's, that's a fallacy because they're two different things. One is a financial instrument that has value in the other isn't right. Um, and by the way, just as a, as a, there's an interesting statistic, about 2% of term policies ever pay out a death benefit, 2%, that is a shockingly no number. And the reason why that is, and the reason why term is great for the insurance company is because there's a shotgun, you know, low number. Most people do not keep the term policies and therefore don't have that coverage dynamics or the insurance company isn't paying anything out and they've kept whatever amount of money you've you've given to them months.

That might be an acceptable trade off. But it's just important to think about that who really wins in those scenarios. But so just looking at it from a premium comparison standpoint, I think people can get hung up on, well, you know, universal or whole life is more expensive than term. Well, that's not how you assess it, right? The reality of that is the mortality cost is probably the same or very close to the same, right? So the actual cost of insurance is probably the same, what you have with a universal or a whole life, a cash value policy is you have a portion of that. That's going into an account that builds value. So that's kind of misunderstanding. Number one, I think number two, and, you know, two and or three are wrapped up in one in the same is that I don't think people really understand how it works as an asset.

Um, so I'll have, uh, I'll, I'll hear people say, well, you know, the performance in these policies are terrible. Well, first of all, as a general statement, that's not accurate, but as a more practical matter, then you're, you're, you're going back to that. Well, are you comparing apples to apples? Are you looking, are you looking at something that, you know, most cash value policies or guaranteed policies? I mean, there's not a market component to them, so there's no inherent volatility or risk to the funds. So if you're comparing that type of financial instrument to a mutual fund portfolio, for example, that can go down in value. That's not an accurate comparison either. Right? So that's, I think the other part where I see a lot of just, you know, these generalizations, you got to really look at well, what are we really comparing? And is that a valid basis for comparison?

And I think the last part is, is how it works functionally. Like I was describing it to you. People don't understand that you can access the death, benefit your policy and take that money out while you're alive. That's huge. I mean, there's no other financial instrument on the planet that lets you, that has a, that additional bucket of money there and B lets you use it. Right. So I think that that's the part that you, you don't, most people don't recognize how powerful that can be and why, you know, there's a lot of ways that you may want to use this as some part of your savings and wealth building strategy and that's not right for everybody. And obviously there's no one right. Insurance policy for everybody anyway. But I think that, um, just dismissing it or kind of hearing certain things that just because enough people say it means that it's, you know, it sounds like it must be true.

Well, that's not, it's not always the case. So, you know, I gotta say, I mean, I, I, you know, for us, for our family, you know, we're probably longterm have at least, you know, 15, 20% of our income in retirement and will come out of life insurance because, you know, once you cross a certain earning threshold, I can't put money into a Roth anymore. So where else can I get that kind of growth and tax treatment? What other instruments are available to replicate that well, life insurance, you know, so there's, there's a lot of reasons why finding a way to structure it and use it as an asset can be very, very, very valuable. Um, as long as you don't just kind of get, I think, hung up, hung up on these common misunderstandings and misperceptions about it.

Well, and I think just like anything else, uh, you know, you need to do your research and figure out what's best for you and your family. And I had never really thought about it. Um, you know, as a strategy for building wealth, like you said, you know, and I've heard more people talk about like putting money in your HSA, kind of the same concept, you know? And so like to me, that's just like another thing that you can do once you get to that point of building wealth. And like you said, other strategies for, you know, when you can't do certain things, when you make too much money or if you just need another vehicle to save. So, you know, I hadn't really thought about it that way. So you've definitely opened up my eyes to more options.

Well, let me, let me give you one more example. That's really appropriate for anybody that's ever in engaged in college planning and college funding. If, if, if that's ever something that you're thinking about, then you're going to be familiar with a little form called FAFSA, right? And so the premise or the, the understanding, one of the things that you're addressing when it comes to that kind of stuff is countable versus noncountable assets, right? And how certain assets have more weight against you and others as well. The cash value of life insurance policies is, is a noncountable asset. And so that may mean it can be a very valuable way to accrue funds in that domain. And you can use that. The cool thing is there's no restrictions on what you use, the life insurance money, the cash value for you don't have to wait until a certain retirement age.

The money's there it's yours. If you needed it, you you're 20 now and you fund your kids in at 38, you're taking some of that money out. That's fine. That's another common area we see. Yeah, it is being used, uh, in a very strategic way as an asset for, you know, these types of purposes. Cause there's, like I said, that's, that's a very tangible reason why, if I'm thinking about all these vehicles that I'm going to be setting money aside for and how the day will ultimately impact, you know, my child's ability to either get consideration rate or what have you. It's a very commonly used one. Mmm. And may play a very, very valuable role. So just as a, again, another thing that I, you know, most people don't even think about that. They're like, why would I, what are you talking about? Why would I, why would life insurance have anything to do with college funding?
But it's, again, it's just knowing how an asset works.

I think it's really weird that, you know, why it's something that you just, and do you want to have an educated conversation with somebody that really understands it and you know, can help you see it as an, as an option that you can either, you know, engage with or rule out. Cause it may not be right for you. Well, I'm really glad that you brought that up because a lot of people don't realize that for FAFSA. Like if you, if your kid wants to get any kind of funding that they look at your assets and that whether you like it or not, you will, you may have to contribute to their college fund or they just don't go. And a lot of people do not realize that they're like, well, I'm just not gonna, you know, they can pay for it themselves.

Well, you don't get to decide that the government decides how much they can have in student loans. Otherwise you get parent loans. So I'm really glad that you brought that up because I had not thought about that aspect of it for saving for college and like how, cause I've thought about it. Like, okay, well, if you know, my house is paid off by then, I don't have any debt. Like they're going to say, I have to pay all of it. You know what I mean? Like it's certain to freak me out and I've, you know, I've got a nine year old, a six year old and a two year old. I'm like, how am I, how am I going to put all these kids through college? So now you've got me thinking of some more, more ways. So put some money aside. So I'm really glad you brought that up because you know, I, I've had some painful conversations with people that, you know, their kids as a senior and they don't have any money saved and they realize, Oh, I make too much money. And they think that I can afford a thousand dollars a month for college that the, you know, the government and, you know, FASFA or my kid can't go, yeah. People don't realize that you don't get it aside unless you know, your kid, a bunch of money saved

Well and it's, and it's really scary what you've described because you can be doing so many things right financially. But then when you come to this juncture in your life, it's like you fall off a cliff. You're like, Whoa, wait a minute. You clearly don't know how, even at a certain income or asset level where all the rest of the money goes, it's not like it just goes under my mattress and it's just there, you know?

Yeah. And you know, I've seen so many stories and it's heartbreaking of people that are close to retirement age, and now they have $200,000 in student loans for their kids and they don't know how they're going to retire. So, um, you know, I'm glad that you brought that up because I think, you know, having more options and, and being able, having knowledge and being able to plan ahead of time is so crucial. And at least just mentally preparing yourself for, Hey, I'm going to, I'm going to have to contribute. Or my kids don't go to college, like go ahead and mentally preparing yourself for that. I mean, of course we don't know what will happen by then maybe, you know, everybody I'm freaked out. Well, you know, it's true.
Mentally prepare and then hopefully try to financially prepared as best you can.

Yeah, exactly. So, um, you know, you've, you've given me a lot of things to think about. Um, but do you have any just last pieces of advice or your number one tip for, um, life insurance and you know what we need to know about it?
Yeah, no, I think it sounds really corny, but seek professional help. Um, because you want to work with someone. I think
I know for myself and I think it's fairly common for a lot of the people that I've talked to and work with. Right. We all are trying to make the right financial decisions for ourselves. So it's not a lack of desire or effort. Usually that's standing in our way. Usually what, what challenges us is we don't understand. Right? We don't understand maybe the variables, the options. We don't know how to see the equation the right way. And that's why it's really important to work with a professional in some capacity that that can help you understand the decision you're trying to make. And then, you know, lay out the options that are available so that you can execute with confidence.

And I think that that's, that's always my, you know, my hope for as many people as possible, whether they work with someone like me or anybody, but there's, there's a ton of really great professionals out there. But do don't feel, um, like Google is the answer because Google is, it can, it can be a little bit scary. Some of the stuff that they put out there that they consider advice, um, and you can't Sue Google by the way, if you follow it's advice and it doesn't work, don't try it.
You know, it's, I think finances and money sometimes because of how personal it is, you know, people tend to feel like they don't want to talk about it. And so that's, I guess the other side of that hope is that, you know, don't, don't, you know, it's not like you're going to a therapist for something that you you're really don't want anybody to allow me.

This is just common stuff. And everybody needs to be able to, I think, get the benefit a really helpful, healthy advice because that's an empowering experience and then there's nothing better. And I, and I know, you know, this in all of the work that you do with your clients, right? There's nothing better than feeling good about making good financial decisions and being able to see how you're lining the dominoes up so that they fall the right way in your life. Oh, absolutely. That's, that's always my hope and whether it's life in drones or anything else just, you know, work with, with a professional or serious or professional in, in, you know, make sure that you can get that confidence that I understand the decision that I need to make and the options that are available to me. And I think I've found the right one.

Oh, absolutely. And you know, no matter how much research that you do on your own and general advice that you read or get, you know, your situation just like you said is personal. And so what works for me may not work for you or, you know, tweaking things here and there, but getting a professional opinion and an outside perspective is crucial because, you know, you're in the weeds, you know, you've got all this emotional decisions to make and you need that outside perspective as well.
You nailed it.

I'm so glad you said that. So, and also at the end of every podcast, I ask everybody what their favorite nonfiction book is, you know, just self-development or something light and entertaining. Um, do you have a favorite book?

I have a lot and there's a lot competing for that title favorite. So I'm going to give one that has just been that it's, it's somewhat recent and it's for anybody. It's a fascinating read. So the book is called when, and it's by an author named Dan pink. So super easy to remember Dan pink, cause that name stands out. Um, and the book is called when it is, I could not put it down. I could not put it down. He just, what it's about is he talks about your chronotype and it's, and it's a book about how understanding, how you, you know, you perform throughout a day and what type of Kronos have, whether you're, you know, a morning person, an evening person, or kind of a middle person, how really understanding that impacts when you're going to perform well, when you want to avoid certain things. I mean, it's just, it's a topic that I never would have in a million years thought I'd be interested in, be I'd want to read an entire book on. So fascinating. And I got to tell you like so much practical wisdom in terms of, you know, any, anybody that's looking to just optimize their own performance. You have to read this book. I promise you if you do, you will thank me for it. Um, yeah, it's, it's a great read. So check it out when Dan pink, thank me later.

Well, thank you for that suggestion. I'll add it to the list. Now I do appreciate you coming on today and, you know, taking the complicated insurance and making it easy for us to, I understand, and given me some new ideas, um, and for people that want to maybe reach out or learn more about your, if they have any questions, um, how can people find you?
Yeah, great question. So probably three ways. So, uh, the website for our company and all of our contact information's on theirs is www dot the Haney company, just all spelled out.com. And then, um, I have a podcast it's, that's my financial guy. So if you search any podcasting platform, that's my financial guy. You'll find me. It's the only one with that title. Um, and, and actually the website WWF that's my financial guy.com is where all, where all that can be hosted. So you can find it either way. Um, and then we also, uh, are at the Haney company on Twitter as well. So any one of those three ways you should be able to find me. I'm very, I'm very Googleable as well. I have a good LinkedIn profile and all that kind of stuff, but those are the, probably the three easiest ways to get ahold of me.

Well, thank you. And we will link to everything in the show notes as well. So people can just click on there and find you as well, but definitely go check out his podcast and I appreciate you taking the time to speak with us today.
No, it was great. Great being on. Thank you so much for having me.

Thanks. All right. Before you go and check out Brian's podcast, don't forget to go crab your paycheck budget spreadsheet so you can get your finances all in order and know exactly what bills to pay out of each paycheck so that you can get your finances organized and get that financial piece that goes along with knowing what to pay and when, and then of course, make sure that you have your proper insurance coverage. You make sure that you are taking advantage of term life insurance, get your family covered and get all your ducks in a row. All right, guys, I will talk to you guys in the next episode.