Imagine you had died last night
“Good morning, Arthur. I’m sorry I’m a bit early.” My long standing client, Robert, had arrived half an hour early for our appointment. But that was alright. We had known each other long enough to be flexible and fit into each other’s busy schedule.
“No worries,” I said. “But, I have to make a phone call, then speak to Margaret. After that we can sit down together and carry out our Annual Review of your Life Assurance programme. I’ll get you a coffee and while you’re waiting, I want you to think about something.
“I want you to imagine you had died last night and instead of you, your wife Sarah is sitting in that chair. I want you to imagine she is going to ask me three questions. Tell me Robert, what three questions is she going to ask me? Meanwhile I am going to make that phone call and speak to Margaret.”
Twenty five minutes later, I was back in the meeting room.
“Well Robert. Have you thought about what I asked?”
“Yes, Arthur. I have and I have decided I need a further £xxxxx of Life Assurance.”
“That’s interesting,” I said. “How did you arrive at that.”
“Well”, said Robert. “I thought the three questions Sarah would ask would be, Is Robert’s will up to date?, Do we have any debts? and How much Life Assurance does he have?”
“And the answers?” I asked.
“Yes, Yes and £150,000,” replied Robert.
“So how did you arrive at £xxxxxxx.” I asked.
“Well, I borrowed another £10,000 from the bank three months ago and I reckoned that £150,000 would only give Sarah something like £4,500 per annum income. I would like her to have something of the order of £10,000 per annum at least until the kids leave school or university, which would mean an extra of just under £185,000 plus £10,00 to cover the Loan. So that comes to £195,000; lets call it £200,000.”
“And your youngest child Is 12, is that right?”
“That’s right”.
“So let’s assume, he’s still dependent on you or Sarah until age 23. That would mean a term of 11 years”.
“That’s sound about right. Can you do some research for me?”
“Sure can”, I replied. “More coffee?”
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