Life insurance: Making sure in unsure times

Posted: Wednesday, January 16, 2002

What if you went to work one morning and never came home again? Nightmares of that possibility have hit commercial pilots, flight crews, mail handlers, frequent fliers and others in past months. The terrorist attacks of Sept. 11 seem to have focused wage-earners' attention on mortality and turned life insurance into a hot commodity, especially for those with minor children, according to those in the business.

"One young fellow in the military called up a week ago," said Karen Hansen, a life underwriter with The MONY Group in Juneau. "His wife is getting a master's degree. They have a daughter, and he is retiring soon from a secure position. He said, 'When you have a child, it makes a difference.' "

"Because insurance for men costs more when they are younger, I might recommend a term policy for the husband, an investment policy for the wife and something to cover college for the daughter," Hansen said. "Then, as their incomes increase, they can adjust their coverage."

"I think that 9/11 inspired people to think, 'What if that happened to me?'," said Pete Mores, licensed life agent for the Mendenhall Valley office of Shattuck & Grummett Inc. "We've had increased interest, although not a landslide."

Joe Heueisen, the licensed life agent for the downtown office of Shattuck & Grummett, agreed that calamities spur thoughts of insurance.

"Any time you have a major disaster, you have people thinking about life insurance," Heueisen said. "Right after the Columbine school shooting, a lot of teachers became interested."

Typically, life and health insurance sales are a little stronger in the fall of the year, because vacations are over and, in Alaska, permanent fund dividends are giving residents a little more disposable income, Mores said.

"But, just talking to people, I find they have a little more concern about 'What happens to the family if something happens to me?' It seems to be a driving force," he said.

Mores has received calls about increasing policies, which is simple if you have whole life.

"With term life policies, you would need to buy a replacement policy with more coverage, or buy a second policy," he said.

As far as increases in life policies go, Hansen has seen clients "who have gone from a black-and-white screen to color television and digital. They took their older whole life policy that was making 7 percent, and moved it into an investment policy."

Young and old clients are doing this, she said.

"It's a shift in thinking from saying to your agent, 'Here is my money, take care of me,' to 'I want to be in charge of my money,' " Hansen said. "Insurance companies don't like this, but I feel that people need to feel they are in control of their funds."

Hansen advises her clients to attend workshops and seminars and know what they're doing with their investments.

"My philosophy is not to maintain a wall between myself and the client, not to be 'the expert,' " she said. "I encourage people to learn about the stock market so they are comfortable with their coverage. We work together and develop a relationship."

Life insurance sales are up in general and have been every year, said Reuben Willis, an insurance agent with State Farm in Juneau.

"We have been having record-setting years, and it's hard to know specifically what percentage of that, if any, can be attributed to Sept. 11," he said. "The reaction is probably heightened on the East Coast. In Alaska, we feel removed from that event even though it was in our face on television."

During the Great Depression, life insurance was purchased to cover burial expenses. As Americans grew more prosperous, the idea expanded so that insurance for the household's main breadwinner was considered a nest egg for survivors until they could find other income.

One rule of thumb is that life insurance should be 10 times a policyholder's annual income. Someone earning $30,000, for example, should have $300,000 coverage.

Heueisen looks at coverage a bit differently. "How much insurance you have depends on what you want to accomplish. The object of life insurance is to replace your present income and your ability to earn in the future. It's not necessarily supposed to be a bonanza for the relatives."

Take a 30-year-old man whose wife works and whose family includes two preschool children. The man, who has never smoked and is in generally good health, earns $30,000 a year.

"I don't think anyone in that age bracket should ever have less than $100,000 (coverage), and if he has a mortgage and outstanding debts, $250,000," Heueisen said. The least expensive coverage is term life (which has no cash value), which, for this hypothetical case, would cost about $190 a year.

"Anecdotally, our agents in Alaska told me they have had increased questions about life insurance, and people who would have needed more convincing in the past about buying insurance are now easier to sell," said Nancy Carpenter, with State Farm's public affairs office. "Reuben had one client who specifically mentioned the tragedy (of Sept. 11)."

"A lot of different life events cause people to seek insurance - things like marriage, birth of a child and planning for college," Carpenter said. The impact of Sept. 11 was so far-reaching, so overwhelming that it may have assumed the proportions of a personal life event for many Americans, she said.

The Internet allows ease of comparison shopping for competitive price quotations. These are Web sites to browse for information on rates:, and For general information, try or, Carpenter said.

Ann Chandonnet can be reached at

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