According to financial expert, David Kottler, it needs to be part of the national conversation because this disconnect is costing billions of dollars.

An Inherently Morbid Industry

Though many regard it as a necessity, life insurance is a topic that makes people cringe. Whether it’s a fear of our own death, the complexity of the system, or simply the unsavory posture of eager salespeople, the case against life insurance is strong. The subject is often met with skepticism, confusion, and resentment. Although it is considered a fundamental part of American finance, many people find it easier to avoid the topic entirely.

According to financial expert, David Kottler, it needs to be part of the national conversation because this disconnect is costing billions of dollars.

“Billions of dollars in life insurance benefits stemming from long neglected or unknown life-insurance policies are everywhere. It’s an enormous waste of resources”, says Kottler.

Thousands of individuals have life insurance policies they are not aware of. It is estimated nationwide at least $10 billion in life insurance benefits go unpaid annually. The number and amount of lapsed life insurance policies are astounding. Either unneeded or unaffordable, life insurance policies worth more than $57 billion of face value are lapsed by seniors over age 65 each year. And that only includes universal and variable life policies. If all life policies were to be included, the number of policies that were lapsed would have a face value of $112 billion! Too few understand they may be able to cash out with a “life settlement,” or sale of an existing life insurance policy to a third party.

According to Kottler, life insurance products have a lot of fine print and people don’t understand their rights. Only six states in the U.S. currently have some version of a Consumer Disclosure Law that requires insurers to notify seniors of alternatives. Another factor that leads to confusion is that the turnover rate for selling agents is high. Today, almost 70% of policies were sold by someone no longer in the business and sales agents are not compensated very much after the initial sale leaving little incentive to service the existing policies. (Of course, the top agents certainly do NOT operate like this but there are not that many at the top.)

Life insurance companies are not going to dispense a death benefit unless the beneficiary makes a claim, and they are not looking too hard to find them. Many carriers or broker-dealers will not allow their agents to be involved with life settlements. This may be because it is more profitable to see policies lapse.

“Consider the positive impact this cash could have for retiring seniors to help them offset their living and increased medical expenses. It would ease the burden on our government relative to health care and social security…”

…says Kottler, who urges people to investigate their accounts to ensure these resources are not wasted. Policies should be audited every two years and done properly, requesting policy specifics from the carrier in writing. Life Insurance is an important tool for financial stability but you should be clear on what you are trying to protect.

“Billions of dollars in life insurance benefits stemming from long neglected or unknown life-insurance policies are everywhere. It’s an enormous waste of resources.“

– David Kottler

In An Interview/Article, Kottler Can Share:

• How to find truth in an inherently morbid industry
• Facts and myths about life insurance
• How to break the cycle of oblivious beneficiaries
• Quick reference guide for auditing insurance accounts
• How to know if you are paying for policies you don’t need
• How to spot financial problems before they happen

Kottler is on a mission to educate the public about life insurance. He has information and advice people can use to break the cycle of oblivion and fulfill their life’s journey both philanthropically and financially.