Small case with a big life impact

Back in the days when there was one green-screen computer for 15 people, I worked for a small, two-partner accounting firm where ledgers and other documents were handwritten. My supervisor, Richard, was a cheeky chap, about 15 years my senior. Some days he was lovely to me; other days he was awful. Nevertheless, there was something about him I really liked.

I stayed at the firm for a couple of years and then moved on, but Richard and I kept in touch as friends. I became a financial advisor, working with a direct insurance company. Meanwhile, Richard was working with another advisor. He became a junior partner in another accounting firm and was paying off a large bank loan. He received a reasonable income, but much of it went to loan payments.

Six years later, when I started my own practice and became independent, I went to see Richard and suggested we have a chat about his insurance coverage. I learned that he had a retirement plan. Back then, you could buy life insurance inside of the retirement plan, and when you bought the retirement plan, you’d get a tax deduction on whatever premium you paid. It was a cheaper way of buying life insurance.

I did a review of this protection program on Richard’s behalf. I don’t recall exactly what the premium was, but a sizable proportion of it went for the life insurance coverage and a much smaller proportion for the retirement savings. I said to Richard, “If you buy the same policy with this company I’m proposing, we can keep that split the same, but the coverage will go up.” I remember clearly that it was £150,000 of life coverage that went up to £600,000. Richard said, “OK, let’s do that.” I suggested allocating a little bit more money toward the retirement side, to which he also agreed.

Every year I’d meet with Richard, and we’d go back and forth about how much more he could pay. Richard’s wife, Jackie, worked in a school supervising children at lunchtime, which was not a high-paying job. When she started nearly 30 years ago, her income was approximately £100 a month. By the time she stopped working, it was only £250 a month.

Then about 20 years ago, Richard was driving his younger son, Carl, to football training at a club in the United Kingdom. Carl had the potential to be a football star. Jackie was sitting in front; Carl and his brother, Mark, were sitting in back with a school friend. Richard got into a collision with a truck, and his wife and the three boys saw him die at the wheel. Jackie received a £600,000 payout from Richard’s life insurance, so we were able to replace his income, invest it and give her the earnings.

I’ve settled bigger claims since then and have clients with millions of pounds and much bigger policies. But what makes this case more meaningful is that Jackie now has a livable income. A simple lady without big expectations, she has been able to return to work at the school as an unpaid volunteer, pay off the mortgage and remain in their new house in the nice village. Carl and Mark are both in relationships, and Jackie is a grandmother. She lives in the next town over from me.

It was a small thing, rebrokering that case, but if I hadn’t done that, I don’t know what would have happened to Jackie. Maybe the money would be gone by now and she would have had to sell the house and move.

That’s why it’s so important to ensure that if we pass before our time, our families can continue to live in the fashion they have created. Our spouses can still pursue the goals, dreams and desires they have for the children. Why shouldn’t they help with deposits on their first homes and school fees? Selling the house should be a choice for them — not a necessity.

Asvin Chauhan is a 26-year MDRT member from Leamington Spa, England, UK. Contact him at ac@ashleighcourt.com.