LIFE CHANGING EVENTS NO LONGER TRIGGER INSURANCE PURCHASES

A life changing event — the birth of a child or a marriage (perhaps not in that order) — is a time to evaluate your insurance coverage. You might need more to take care of your loved ones in case you can’t.

If you’re single and start working, you might get critical illness insurance or income replacement insurance.

That’s not happening.

Life CHANGING Events

Here are typical life changing events:

• Starting to work
• Getting married or divorced
• Birth or adoption of a child
• Buying a home
• Losing a loved one
• Starting a business
• Planning for retirement
• Retiring
• Preserving your estate

Each event is a prod to re-evaluate your insurance, investments and financial plans.

Research Shows

Only 41% said a life changing event prompted them to shop for life insurance (all the statistics are from LIMRA and refer specifically to life insurance). Do the majority — the other 59% — think nothing will happen to them? That’s not a bet you want to lose.

What’s more

• 60% of new parents don’t shop or buy life insurance within two years
• 70% of newly married or newly divorced couples don’t shop or buy life insurance within two years

What’s Going Wrong?

People can’t be ignorant about the need for insurance. Maybe they think insurance is too expensive or don’t know where to turn for objective help. The advisors might not be contacting them (60% don’t remember being approached to buy life insurance in the last two years). Some were approached but 35% say the advisors didn’t follow up. How strange. Maybe the advisors thought the cases were too small to bother with?

Maybe the problem with the insurance industry? The financial sector ranks at the bottom in trust the latest Edelman Trust Barometer. That can’t help.

Possible Reasons

Maybe advisors aren't maintaining enough ongoing contact with their network to know of important changes in their lives. Well before I worked for Met Life, agents in New York City collected premiums weekly in person on foot. They were part of the community. They built relationships.
They knew what was happening.

In To Sell Is Human (my review), Dan Pink says that once buyers know they have a problem, the seller loses relevance. That's because buyers can often find solutions on their own. The Internet gives ready access to information. Finding problems becomes more important than solving them. Are advisors good at consistent meaningful contact?

Who Loses?

Life changing events affect our insurance needs. Unless we take time to see if we need to add, update or remove coverage. we may not have the amount of insurance we really need. Too many are not doing an evaluation. How about you?

Links

• Major life events don't lead to life insurance buys (Benefitspro.com, Apr 2013)
• Financial services is the least trusted industry globally (Edelman Trust Barometer 2013) Fiduciary: the word advisors imply but dare not say
• The lure of "exclusive" financial strategies
• Three reasons life insurance prices keep shooting up
• Test your life insurance literacy
• 2012 facts of life (LIMRA) [PDF]
• image courtesy of Kurhan

Podcast 217

direct download | Internet Archive page | iTunes

PS What do you think is going wrong?

AVOID WINDOWS 8

Companies make money by enticing us to buy stuff that looks “new and improved” but really isn’t. Windows 8 falls into this category. Windows 7 still works very well. It’s quick. It’s stable. What’s missing?

Microsoft is hardly successful at innovation. Did you buy a Zune MP3 player, Windows tablet, Windows phone or switch to Bing (reached an all-time high of 16.5% market share in January  compared with Google’s 67.0%). The world is moving online where Microsoft hasn’t made a penny since 2005. In Q1, Microsoft’s online operations lost $262 million. That’s considered an improvement.

In 2012, five of the top six mobile apps in the US came from Google. Where was Microsoft?

At the same time, Microsoft continues making lots of money because of the prevalence of  Windows and Office. Times change and Microsoft tried to catch up with the launch of Windows 8. As usual, they created confusion with the various edition for different devices. Should you get Windows 8 or Windows 8 Pro for your desktop. What is Windows RT and why can’t it run the programs you already have?

In Q1 2013, Windows 8 only reached 3.31% market share, despite promotions like a $15 upgrade offer (now over). Even the horrible Windows Vista has more market share (about 5%).

Forced Upgraded

I recently got a new notebook computer with Windows 8 and started detesting the operating system within hours. I don't mind change as long as change makes life simpler or better.

Windows 8 may be appealing if you have a computer with a touch screen. Many of today's high end computers still rely on a touchpad. Many users still use a mouse. Why force us to use an interface designed for touch? That’s unnecessary and annoying. This new interface called Metro slows work down.

Common features like the button to shut down your computer are now hidden away under settings. Shutting down your computer is an action its not a setting.

Stop

You can switch to desktop mode but the Start button is gone. This is progress?

Full Scream

Applications designed for Windows 8 take up the whole screen. Where are the windows?

There is rarely a reason to run Skype in full screen mode. There are many reasons to run Skype in a window while you're working on other windows. On a small screen like a tablet, having an application fill the whole screen is fine. On a computer designed for productivity, the restriction is silly. I have a full HD screen with a resolution of 1920x1080 pixels. I have no good reason to devote all that space to Skype or Weather or Messaging. What is Microsoft thinking?

Better But …

Overall, Windows 8 feels faster than Windows 7. Maybe this is because of the operating system or the newer hardware. The upgrade does not do anything important that I could not do before. The initial annoyances are gone. I’ve restored the Start button with Start8 ($5 from Stardock), which blends the old and new elegantly.

When companies tell you something is new and improved, be wary. You may not get the benefits promised. The time you spend learning how to use the new could be better spent mastering the old. You'll also save money.

The very same applies with financial products and services. You may not know what you're giving up. Maybe there is more fine print. Maybe prices are higher. Maybe guarantees are worse. Buyer beware.

Links

• 8 ways Microsoft could save Windows 8 (Information Week, Apr 19, 2013)
• Are you more like Apple, Google or Microsoft?
• Buyer beware: the best way to measure intent
• uApple: The iPad shows how you can be like Apple
• Why you can’t (and don’t) buy on price
• Recovering from another computer breakdown
• Image courtesy of brokenarts (then modified)

Podcast 216

direct download | Internet Archive page | iTunes

PS When you get your next computer, Windows may not even matter much since we’re spending more time on our tablets and smartphones.

THE UNWELCOME LESSON FROM THE RBC-iGATE SAGA

Companies focus on making profits for their owners. They look for cost savings. They can save money by hiring people in other cities, provinces or countries. Outsourcing is another way. How that’s done may not matter as much as the money saved.

We like saving money too. The plight of the local mom & pop stores isn’t as compelling as the savings at the big box stores.

Outrage

This week, Canadians are outraged by RBC bringing in 45 temporary foreign workers to replace current employees. Okay … but 18 of the 50 largest employers do too. Is that a surprise?

In all, about 33,000  employers participate including: Air Canada, Bank of Canada, Bell, Blackberry, BMO, Bombardier, Canadian Tire, CanJet, CBC, CN Rail, CP Rail, Deloitte, Enbridge, Fairmont Hotels, Girl Guides, Hudson’s Bay, Loblaws, Lululemon, Manulife, Maple Leaf Foods, McDonalds, Porter Airlines, Rogers, Rona, Scotiabank, Shoppers Drug Mart, SNC Lavalin, Sobeys, Suncor, Sun Life, Sears, Shaw, TD Bank, Telus, Thompson Reuters, Tim Hortons, TransCanada and Walmart (see The Globe and Mail and Huffington Post both for Apr 12, 2013)

“Without the employment program, many Tim Hortons restaurants would not be able to operate full time or, in many cases, remain open at all.”
— Tim Horton’s spokesperson

Really? Concerns fade with time. Life goes on much as before.

Dig Deeper

The deeper lesson is that job security is not guaranteed even if you have one of the best jobs or the passion of Guillermo de Toro. How a job disappears isn’t very relevant. Gone is gone. Companies fail too. Bad happens. How do you protect yourself? Why not stay employable and reduce your financial risks?

Employable

Staying employable requires upgrades in your skills. Sorry. I still keep seeing people who aren’t more prepared for the job market than they were five years ago. They don’t bother networking or updating their LinkedIn profiles until they need a job. Too late. You can’t harvest seeds you haven’t planted and nurtured.

Your Risks

We have a habit of being unprepared. After Sandy, 50% to 67% of homeowners found they were underinsured. We need to prepare in advance.

Links

• Temporary foreign worker impacts felt far beyond RBC (CBC News, Apr 12, 2013)
• RBC didn't plan for outsourcing backlash: PR expert (CTV News, Apr 12, 2013)
• Be proactive within your circle of concern
• The best and worst jobs
• To ways to stay visible (and employable)
• Unintended lessons from three entrepreneurs
• The perils or pyramids and multilevel marketing
• Escape from the cage of mediocrity
• The talent myth-conception
• Tips to bulletproof your job
• image courtesy of UBE

Podcast 215

direct download | Internet Archive page | iTunes

PS We weren’t expecting snow this week but we had some on our patio furniture for two days.

DO YOU HAVE A FINANCIAL DREAM OR A FINANCIAL NIGHTMARE?

This photo has an alarming warning: “danger steps are steep and slippery”. Why not build a handrail to prevent injury rather than stop with a warning to deflect liability?

Financial advertising often entices you with dreams of a wonderful life. Here are five key trends since the 2008 global financial crisis, according to Getty Images

1. Targeting women
2. Bringing surprise
3. Wealth is more than money 
4. Small businesses
5. Regaining trust

None of the trends aim at making people feel bad. The 10 most viewed financial ads on YouTube avoid negativity too (The Financial Brand, Nov 2012).

Didn’t Get The Memo

At a recent networking event, we were subjected to an infomercial from an advisor from a major company you'd recognize. He said our financial futures are less secure than we think. His solution? Buy investments and insurance from him.

Really?

I couldn't help but think about his current and former clients. Weren't they messed up too? Unless this advisor is an unknown financial wizard, didn't he contribute to their plight? At the same time, wasn't he profiting while they suffered? After all, he sold high margin mutual funds instead of low cost ETFs.

He was handing out business cards like candy. They were being received like apples with razor blades. I noticed he had no designations. That's not reassuring. He could serve clients better with some financial education. Do you think he charged less because he knew less? There was no blog or other clues online to show his expertise either.

There are reasons our financial futures may be more nightmarish than dreamy: erosion of investments, uncertain future returns, high investment expenses, inadequate health or life insurance, job uncertainty, longer lifespans and unexpected costs such as health care.

Luckily, this advisor didn’t have more time at the microphone to spread more gloom. I didn't see a line of people heading toward him for their financial salvation. The buyers were beware.

Plans

• Flaws in the financial advisor system (Feb 2012, The Globe And Mail)
• If you have/had/want money, read Pound Foolish
• Do you have a financial advisor or a financial salesperson? (RetireHappy.ca)
• Why insurance advisors also sell investments
• Where is your advisor’s blog?
• image courtesy of Kenn W. Kiser

Podcast 214

direct download | Internet Archive page | iTunes

PS Getting help may be a great idea.