Back in the Jimmy Carter days, it was very expensive to die. On top of an excessive and oppressive federal death tax, there were attempts to create an additional capital gains death tax. Additionally, most states had their own version of a claim on individual assets. All added, many businesses and farms were completely wiped out due to faulty or no planning.
Also, during that period, there was an insurance guru who rode a white horse. Namely, Ben Feldman
of New York Life. He probably did (and sold) more than any one single individual, while promoting the benefits of how insurance actually created discounted dollars to pay death costs.
One of his most dynamic examples was in the front of his “technique book.” Back then, the Treasury still printed a one thousand dollar bill. Ben had that bill pasted on his front page alongside three pennies.
His opening question was, “If your family has to pay exorbitant death expenses, which one of these would be your best alternative: Would you rather pay these costs with your whole dollars or with my pennies? May I show you how this works?”
Ben Feldman was famous for what came to be branded as “Feldmanisms.” These little, well-placed one line gems were responsible for selling multi-millions of insurance (much of it whole life
Point is, regardless of who is in control of the economy, there will be confiscatory taxation and expenses at some level. Considering current events, it seems that we may be headed for more.
Regardless of how the product of insurance may be internally taxed, the miracle of the law of large numbers is what makes the external multiple happen. Simple as that.
This concept may already be getting some fresh and unusual press.
Recently, there was a discussion on a news channel where Gene Simmons (of the rock band KISS) was being interviewed alongside his financial planner about the size and corresponding liability of his estate at death.
He was not endorsing a company or product, but he was animated and even excited about the role that insurance would play in his estate to pay death costs with discounted dollars.
The opportunity today may be the same as it was during Carter times. What allowed me to initially get in the door and have the death tax conversation was often the discounted dollar Feldmanism. And further, what often lead to the decision to purchase insurance was the qualification Feldmanism: “You look good on the outside, but in order for us to see if you qualify for this option, our medical people will need to see how you look on the inside.”
Some say, “What goes around comes around.” Back in those days, insurance was a hero. Could it be that discounted dollars are positioned for a comeback?
And, while you are considering that question, you may want to go to the archives and brush the dust off of a few Feldmanisms
. Classics only get better with age.
Who knows? You may be the next Ben.