CHAPTER

THREE
The Concept of life insurance as
Easier Terms
This business of living imposes certain costs from
which there is no escape. The number of dollars will vary
according to tastes, preferences, and standards of living; but
from the cost itself there is no escape.

There are, however, several alternative methods of

meeting these unavoidable costs, and, among these
alternatives, life insurance offers by far the easiest terms.

Thus, we may say to every person, concerning their life

insurance needs: “Some day, some how, some one will pay
for this life insurance, whether or not you buy it. There is
no choice as to whether it will be paid for; your only
choice is how it will be paid. In life insurance, you have
the easiest possible terms.”

Unfortunately, the fundamental fact that these costs are

inescapable is not always evident to the prospective buyer.
It comes out clearly only in occasional interviews and often
only in connection with certain specific needs for life
insurance. Prospects, in considering the purchase of life
insurance, frequently assume that they have a choice as to
whether or not they will meet certain obligations and certain
costs. As long as they reason that they have this option,
they can never appreciate in full measure the advantages of
the easier terms that we offer. They may even look upon
these easy installments as a “burden.”
 The truth is, however, that life itself imposes certain
obligations, and from these certainties there is no escape.
When we concede that the cost must be met, and the
choice is only as to the terms by which it will be met,
then we can recognize the easier terms of life insurance for
what they are. Then premium payments appear in their true
light, not as a burden but as a relief from burden. The
cost of the benefits of like insurance must inevitably be
paid by someone, sometime.

Let us illustrate this principle by reference to a few of

the fundamental needs for life insurance.

The Last-Expense Fund The problem of last expenses

is one that must be faced by everyone. These expenses exit
because of the inevitability of doctors’ bills, hospital bills,
funeral expenses, attorney’s fees, etc. They may be ignored
by those who have no compunction about leaving these
obligations to survivors, but the payment is not thereby
avoided; it is merely transferred. When the agent enumerates
them and brings them to the attention of the prospect, the
agent is not creating the problem but is merely defining it.

One way to meet these bills is to set aside the needed

amount, immediately. But the job can be done on far easier
terms than that. It is simpler and sounder, through the
medium of a life insurance premium, to set aside
approximately 2 percent or 3 percent of the amount involved
each year. The expenses might then be paid for at a
minimum rate and at the most it would be 40 or 50 years
before the cost was paid in full.
 Estate Taxes and Succession Duties Let us assume
that we have appraised an estate and have determined, with
as much accuracy as possible, what the taxes will amount
to. Thus, we have established an incontrovertible fact: A
certain amount in taxes must be paid, and from that cost
there is no escape. Even though the tax rate may change
in the future, there will still be a cost to be met.

The owner of the estate is confronted with a simple choice:

1. The taxes may be paid from the estate, at an
unknown future date, under whatever conditions may
exit; or

2. The same obligation may be paid today in a lump

sum by means of single premium life insurance; or
even more easily in annual installments that terminate
at death so that the tax might conceivably be paid
with a single annual installment of 2 percent to 5
percent.

Another advantage is that the owner of the estate may

select now those securities and properties that should be
liquidated in order to meet the tax rather than requiring the
estate’s executor to dispose of the best items in the
portfolio after the owner’s death.

The choice is not whether to pay the tax, but whether

to pay it the hard way or the easy way.
 Educational Insurance On the surface, it might
appear that here is an exception to the rule. The cost of
an education is not fixed and inescapable in the way that
taxes and last expenses are unavoidable.

In fact, the cost may be avoided entirely-if the

education is also avoided entirely. But, if a boy or girl is
to go away to school, there must be money, whatever its
source.

From that, there is no escape. The cost can vary widely,

but, if there is to be a college education, there must be
money.

It is true that there are several possible ways of

meeting the cost. One, for example, is to require the boy
or girl to earn the needed funds while attending school.
This does not avoid the cost; it merely transfers it.

A second method is to meet the bill for a college

education, when the time arrives, out of income. That
method, like that of the youngster working his or her way
through school, can be difficult and expensive.

A far easier way is to look ahead a few years and

pay for that education, whatever its cost may be, in advance
installments. The reduced amount may be converted into skill
easier terms by dividing it into more advance installments.
 When prospects say to a life insurance agent that the
cost of an educational policy seems “high,” let them be
reminded that the plan itself costs nothing; in fact, it shows
a profit in many cases. It is the education that is costly,
not the life insurance contract. The policy merely reduces
the cost of that education from a formidable lump sum to
the easier terms of annual installments.

Retirement Income When prospects are hesitant about

setting aside a large amount per year to provide the
monthly retirement income that they want for themselves and
say, “This is a rich person’s policy,” they are under a
delusion. It is the right to continue living without working
that costs so dearly. The expense of living in retirement
can never be escaped. If individuals have not provided
sufficient funds to permit them to retire, they still pay the
price by their labor in those later years. And often the
hardest money earned is that which is earned after a
lifetime of experience.

The most difficult method of paying for retirement is to

experience the anguish of accepting charity. Whether it is in
the form of public assistance or dependence on one’s own
children, it is still heartrending.

A life insurance contract can give an individual the

right to live without working for about half as much capital
as would be needed if the individuals planned to live on
dividends from investment of capital. In addition, this
principal can be bought in installments.
 Easier terms ? All along the line!

Family Protection Here the principle is not clear

enough to prospective buyers. They are most likely to
assume that have an option as to whether or not the life
insurance that they need will be paid for. Yet the cost of
living goes on for dependents just as it does for workers
who live beyond their earning years. The cost is as
inescapable as the cost of inheritance and estate taxes, or a
last-expense fund, or education. As long as life itself
continues, there is no way to avoid the cost of living,
though there are many ways in which the cost may be
paid.

The survivors of individuals who leave insufficient life

insurance can quickly tell you how easy the terms of life
insurance really are. They know that they are paying for
the benefits of the life insurance the hard way – by working
through the days and the months and the years to provide
a living for themselves.

They pay in full for those benefits when they could

have been paid for in small annual installments.

Ham, hats, and houses cost money. It isn’t the life

insurance policy that is expensive. A person can discharge a
lifetime of obligation through the easy terms of life
insurance.
 There is a cost attached to every hour that an
individual spends on earth. From that, there is no escape.
The terms of life are hard, but the terms of life insurance
are easy. This is a truth that every life insurance agent
knows but often forgets. It is a truth that it is assumed
the prospective buyer realizes but often does not.

It is a truth that, once clearly understood by prospect,

make; the purchase of needed life insurance as natural and
logical in times of high taxes and high cost of living as
under other and happier conditions – and that, indeed, causes
the prospect to welcome even more cordially the easy terms
that life insurance offers, since easy terms are most needed
when financial pressure is the greatest.

The terms of life are hard, but the terms of life

insurance are easy. With enough life insurance as a base, an
individual is free to invest any extra money in equity
products.

“ THIS I BELIEVE”