When to consider life insurance
and what to expect.

WARNING — Once you finish this article, you will know more about life insurance than the average American insurance agent. Don’t believe me? Pick an agent at random and quiz them, asking if they know the five legal benefits of life insurance. If they can’t answer, move on and find a trained, experienced, professional to work with before obtaining this type of insurance product.

The Five Biggest Legal Benefits of Life Insurance are:

1.It creates an immediate estate…

2.It passes cash income tax free directly to beneficiaries…

3.It avoids potential debts…

4.It avoids probate even if the insured has done little to no estate planning…

5.It protects cash from creditors.

DISCLAIMER — This article will provide you with tools that help you determine when to consider life insurance and if so, what to expect as part of the application process.


This article will NOT address, how much, what kind, when to, where to, who to get it from, or how to pay for it. To determine those things, I recommend making an appointment with an ethical, licensed, and experienced financial or insurance professional specifically trained in the field of Life Insurance and asset protection techniques, such as our firm.

Recently, there has been an increase in the number of life insurance advertisements on social media, radio, tv or print literature. It is usually the same commercial format. A grandmother-like lady, talking to a neighbor about how her husband’s life insurance paid out in her time of need. How, for less the thirty cents a day, you too can get quality life insurance without a medical exam. Oh, and don't forget how easy it is to buy over the phone in just minutes. The ads are usually pitching term life Insurance or final expense burial policies through guilt-ridden methods, hoping you feel compelled enough to buy a policy.

While I don't agree with this method of marketing, it is effective. The majority of life insurance is still sold through door to door solicitation by sales folks who know how to convince buyers to make decisions usually through avenues of guilt. There are better, stronger, and more legitimate reasons to discuss obtaining life insurance other than making people feel guilty.


Most insurance companies don’t talk about these reasons, partly because they would rather take the easy sale than give longer consultative advice. That is why our firm exists; we are here to provide you perspective, advice, and show you the options available to you. This way you can make better informed decisions.

The truth of the matter is life insurance is actually a good thing to have as part of your finances and is often a necessity for most working Americans, but most people don't know why. They also don't know a) how much to get, b) what kind to get, c) when to get it, d) where to get it or e) how to pay for it. Sadly, many insurance companies and insurance salesmen thrive on the general public’s ignorance and take advantage by capitalizing on the quick sale. Buyer beware! Unless you are working with a trained professional advisor, you may be getting sold something you don't need.

For this reason I would like to provide you with the…

                                                “Lopez Rules of Thumb for Obtaining Life Insurance”

After 21+ years of being in business as a corporate consultant, 10 of which have been in consulting and advising on matters of insurance, I have realized there are only eight reasons, I call them “Considerations”, why any working American should consider obtaining life insurance. It’s this simple. If you answer “yes” to any of these questions, you need, and should get, life insurance. If you answer “no” to all these, the likelihood of needing it may be low.

The following eight questions are broken up into two sections. The first pertains to the “what if”, meaning, what if you get your angel wings earlier than expected and you can no longer cover your financial obligations as intended. This is what I call the “responsible planner”. The second set pertains to the “when it happens”, meaning you understand that your day is coming and when it finally does, you’ll not only be prepared, but you will leave your estate, family, business, financial portfolio in a better-than-average situation; even possibly catapulting the next generation financially. This is what I call the “advanced planner”. You will see why as you read.

Check all that apply.

SET 1 — In the event of your early or unexpected death:

Debt Repayment -  Do you have personal debt (mortgage, car payment, credit cards, nonacademic loans, etc)?  

Income Replacement - Do you have personal relationships (spouse, life-partner, children, disabled dependents, aging parents, etc.) that depend on your income for quality of life now and in the future?

Business Consideration - Do you have business risk or professional obligations (business partners, business debt, equipment loans, real estate, lines of credit, etc.) that need to be counter-balanced to mitigated?

Tax Consideration - Is your total net worth greater than five million dollars, have over 60% of your assets and investments in 90-day non-liquid states, or will you have a federal or state estate tax issue, or are you behind on taxes to any governmental level?

SET 2 — Does your financial / retirement portfolio need to consider the following:

Forced Savings - A place to stash post-tax dollars in a secure financial vehicle that protects cash from lawsuits or creditors.

Final Expense - A way to pay for your burial and final expenses that will not negatively impact your loved ones financially.

Asset / Wealth Transfers - A way to transfer the value of an asset (real estate, cash investments, business interests, etc.) or the value of a wealthy estate without the effects of taxation.

Health Considerations - A way to secure insurance or insurability before the effects of a health issue such as a disease that is prevalent in your family.

If you discover that you need life insurance, the next steps are to determine: a) how much to get, b) what kind to get, c) when to get it, d) where to get it, e) what options are available to pay for it. These are questions I would rather address in person. You can also read about them in other articles. Let us now address expectation.

What most folks don't realize about life insurance is that it is not a right, nor is it a purchase. Obtaining it is a privilege and an application process. Which is why I always use the word “obtain” (because you have to qualify for it) instead of “buy” or “purchase”, which leads people to think they are guaranteed to get it. Remember, there is no guarantee that a person will qualify for life insurance. The ads may call it “Guaranteed Issue” but you still must apply and qualify for coverage.

What no one in our industry will tell you is that the process of obtaining life insurance is, more often than not, arduous. Underwriting real life insurance takes time. I have personally experienced cases lasting between 10-days to almost one year for approval. Here’s why. The underwriting process involved multiple factors, the three biggest being:

1.Your timely ability to go through the medical examination (aka: ParaMed) 

2.The Carrier’s ability to obtain your medical file for their medical underwriting process

3.The Carrier’s ability to obtain your doctors bill of health statement (aka: APS Attending Physician’s Statement)

What you should expect when looking to obtain Life Insurance? You should expect a smooth process, but a timely one. Usually life insurance policies have large values associated with them. After all, we are asking the carriers to promise to shell out a ton of money in the event you get your wings early.  Here are the general steps in the process.

Step 1 - Introduction Meeting — Use this time to find the advisor that best fits your needs. Most professionals will sit with you for free and discuss your needs, how they work with clients, and how they get paid in this meeting. Use this time to shop around for a quality advisor.

Step 2 - Discovery Meeting — You and your trusted advisor meet to discuss gathering all the necessary information required to apply for life insurance. This may include an application, copies of driver’s license and social security card, and in larger accounts it may require financial documents.

Step 3 - ParMed Exam — During this time, you should expect to schedule and complete a ParaMedical Exam. This is a medical exam, conducted usually by a registered nurse or physician, lasting about 30-45 minutes and, conducted in your home or place of work, but can be done at a doctor’s office. You can expect blood to be drawn, urine to be collected, blood pressure, pulse and respiration measurements as well as height and weight. The examiner will ask you a series of medical underwriting questions similar to those in the application.

Step 4 - Underwriting — The underwriting process takes the longest. This is where the carrier determines the risk you pose to them, your level of insurability medically and financially, and the pricing for your unit of insurance (1 unit of insurance is equal to $1,000 of coverage). This process can last 10 - 90 days for the average case.

Step 5 - Offers — Once the underwriting is complete, the carrier(s) will make a formal offer to be presented to you. This offer usually last 30 days and needs to be either accepted, rejected or modified. The carrier fully expects one of those three options.

Step 6 - Issued & Paid — If you reject the offer, it gets removed from the table. Modifying the offer usually means making adjustments to add or remove riders, options, adjust face value, or premium. Once you accept the offer, we as brokers request the policy be “Issued” and then the carrier will request “Paid” Status.

Step 7 - Delivery Requirements — These are critical documents that need to be filed and stored by the client, the broker/agent, and the carrier. Because Life Insurance is such a unique financial instrument, there are certain requirements that need to be fulfilled as part of the delivery of these policies. A lot of clients have asked me why these requirements are necessary. I then proceed to tell them the story of a grandmother who had been sold 12 policies by an agent in Michigan over the course of 30 years. This agent has since retired, and now the grandchildren are being born, grandma wants to gift them her money in the form of policies. However, she is unable to do so because no delivery requirements were met.

I hope this has been educational and helpful. Feel free to contact our office to schedule your free initial consultation.


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SL & Associates

​Private Client Insurance Advisory Firm