By Carleton Hollister
Ben and Sherry had been happily married for 12 years when they met with me for the first time. They had a beautiful daughter, age 10. They had good jobs and life was going well. They were both funding their 401(k) plans at work and they began funding their Roth accounts through me. In addition, we had a long conversation about life insurance. Other than the small amount they had through their employers, Ben and Sherry had no life insurance. With a young daughter, a mortgage and two healthy incomes, life insurance was an important piece of their financial puzzle.
Life had not always been so kind to Ben and Sherry. Ben was divorced, and was estranged from his two teenage daughters. Sherry had a grown son from a previous marriage, and his father was not in the picture. The divorce had hurt Ben’s credit and Sherry’s credit was not very good either. The home they owned was in Ben’s name because he had better credit.
As I always do, I presented a range of coverage for both Ben and Sherry. I generally present coverage amounts of $250,000, $500,000 and either $750,000 or $1 million. As we were discussing 20-year term insurance, I noted that the cost of such coverage was not very high. Sherry seemed surprised when Ben decided he wanted $500,000 worth of coverage on himself instead of $250,000.
Over the years, we had our annual reviews. I had the retirement plan at Ben’s workplace, so I saw him more frequently than I saw Sherry. Sherry was in school as well as working full time, so she and Ben had a very busy household. Part of the discussion each year was the fact that they had not written their wills since they had been married. Even though I encouraged them to do so and gave them the name of an attorney, that task never got done.
One sunny day, Ben was making his way home from work. A car blew through a stop sign and hit Ben’s car right at the driver’s side. Ben was flown by helicopter to a local hospital, but never made it through the night. Everything came to a halt.
Sherry’s sister called me to let me know of the tragedy, and the fact that they would need to make a claim on the life insurance. I assured her that we would take care of it all. I went to the funeral home to pay my respects. I sought out Sherry’s sister, to introduce myself. Then I went through the line to see Sherry. When I got to her, we embraced. She whispered in my ear that she was going to rely on me a great deal in the coming months. She also commented, “I never dreamed when we were discussing life insurance that this day would ever come. Thank you!”
It has been a hard couple of years for Sherry and her daughter. Because there was no will in place, it took almost five months for the courts to declare Sherry as the executor of the estate, even though she and Ben were married. This significantly delayed the settling process. The lack of a will caused a disagreement among the children on what they were due, delaying the process and causing hard feelings.
However, because of the planning and the life insurance, Sherry has been able to maintain her home and has since moved. Proceeds from the life insurance have helped pay the mortgage and other bills that Ben paid each month. Their daughter has gone to college.
It is difficult being alone at the age of 48, but at least Sherry is not under a financial strain while she endures her loss and rebuilds her life. That $48 per month for $500,000 in 20-year term insurance made all the difference in the world. Never underestimate the benefit and help that we offer.
Carleton “Holly” Hollister is a financial advisor and registered representative with Savage and Associates, Toledo, Ohio. Holly may be contacted at [email protected].