Business Innovators Radio - Interview With Gary Scofield Founder Mansfield Financial Strategies Discussing Life Insurance

Episode Date: September 18, 2023

Gary is an accomplished financial advisor who has spent over four decades dedicated to guiding clients toward financial prosperity in retirement. With impressive credentials, including a lifetime membership in MDRT (Million Dollar Round Table), Gary’s expertise shines. His certifications as a Certified Senior Advisor (CSA) and Certified Long-Term Care (CLTC) specialist demonstrate his proficiency in navigating the complexities of senior financial planning and long-term care. Pursuing additional designations in ChFC and CLU, Gary remains at the forefront of industry knowledge.We take a personalized approach to helping individuals by understanding their unique circumstances, goals, and concerns. As independent advisors, we have access to diverse products and solutions to create comprehensive plans that provide secure and predictable lifetime income. Our mission is to guide people toward a worry-free retirement, building lasting relationships along the way. Learn More:https://mansfieldfs.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-gary-scofield-founder-mansfield-financial-strategies-discussing-life-insurance

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Gary Schofield, who's the founder of Mansfield Financial Strategies, and we're talking about life insurance. Gary, welcome back to the program. Oh, thank you, Mike. I'm happy to be here.

Hey, so before we dive into all the nuances of life insurance, give us a little bit of a backstory and history of life insurance. Absolutely. You know, it's hard to imagine modern life without insurance policies. You know, here in the U.S. alone, there's over a thousand insurance companies. And those companies write policies that together are worth trillions of dollars. But, you know, humans were around a long time. before someone recorded the first written life insurance policy.

And that happened in London, England back in the 1500s. A man named William Given made his living preserving meat and fish. He was actually a salter. And he purchased the life insurance policy. His friend Richard Martin was the beneficiary. And, you know, I often look at how did this come to begin in the United States. Well, life insurance really began in the U.S. in the 1700s, when a group from Pennsylvania,

they were the officials of the Presbyterian faith, they created a fund to protect the Presbyterian ministers and their families. Now, it was called then a corporation for relief of poor and distressed widows and children of Presbyterian ministers. You know, with a name like that, you can understand why it changed to something like

Presbyterian Ministers Fund for Life Insurance, which it did. You know, and then things changed in around 1940, and that's when New York passed a law making it legal for women to take out by herself a life insurance policy on her husband. Now, that same law also gave the widow a significant degree of protection from creditors. Life insurance in America soon experienced a growth spurt, and other states and insurance companies began following the example set by. New York. You know, fortunately today, there's life insurance policies that are suitable for the protection of pretty much everyone in the family. And if you want to help protect those who are important to you, you know, this is what you might have to look at. You know, it's really interesting.

I love when I hear the history behind something because you think, oh, that's been around for, but when it goes back to the dark ages almost, it's really just shows that this is not something new and some shiny object. And that's just really amazing to realize. because people just don't know. And I think I really appreciate that brief history lesson. So I think if we could put the words life insurance at the top of a piece of paper and all these bullet points, there's many, many, many types of life insurance policies, right? What kind of types are there?

Well, traditionally, there's been a whole life and term. Those were the two basic types of life insurance. But now it's segmented into many different types of policies. from whole life to term life, to single premium life, to indexed universal life. And there are so many different types of life insurance, it's almost mind-boggling these days. But by using a good financial advisor or insurance agent, that can really help in a selection process of what type of policy and how long that policy is going to last. Because with a term policy, you've got a limit of when that policy will end based on the term that it's written under.

With a whole life policy, as long as you continue to pay premiums, the insurance will last throughout your entire life. There are also ways that you can pay premiums over a shorter period of time and just kind of keep everything in force so that you make a certain amount of premiums. premium payments, and then it gives you a particular amount of death benefit that will go to your beneficiaries at the time of death. You know, I always like when you think about words like guarantee or permanent, you know, you don't really want to go, well, things can change. So you like that sound of permanent. It makes me think about this, and you can clarify this point, but some types of insurance,

like the terms where you buy a term for 10 years or 15, at some point, it almost is ready to expire and you've got to re-up and then re-qualify, which means maybe more health exams or things like that. And what if things have changed, you might not get the policy. So talk a little bit about how that is overcome by having a good permanent policy in place. Well, a good permanent policy is always the go-to for most people. However, if you do have a term policy and it's going to get, it's ready to expire, higher, many of the companies will allow you to convert that term without additional medical underwriting to a permanent policy of your choice. And you can do that with a lot of different

carriers that are out there. But certainly the permanent life insurance, you know, there's several different types, as I mentioned before, there's whole life, there's universal life, there's indexed universal life, there's single premium life. There's all types of different type of whole life or permanent policies that are available to us today. So isn't it kind of like I like using analogy? So like a term policy might be a little bit like renting a house. You don't really own anything, but you can live there. But a permanent policy is when you buy a house and you've got benefits of tax deduction and equity growth and all of that. Is that a pretty good analogy between term and permanent policies? That's exactly a

great analogy because with, as you pointed out, with term, it does expire unless you convert it or extend the benefit. With a permanent policy, that's going to pretty much guarantee there's going to be a benefit at the time of death. However, there's a lot of other considerations, you know, to use in connection with buying the insurance, whether it's term or permanent or maybe a hybrid or a combination. So there's a lot of different... considerations that one has to make when they're looking at life insurance in general. So let's go a little bit deeper on the permanent side of things. What are some of those added benefits that come into the permanent policy? So for instance, people think I feel like,

you know, well, when I die, my airs get X because I died and that's what I have life insurance for. But the permanent policies give some benefits now before, you know, death and before retirement, right? So talk a little bit about some of those benefits. Absolutely. You know, life insurance these days are different from the policies that are issued these days are quite a bit different than they were even 10 or 15 years ago. And in saying that, a lot of these policies now allow you to take the advantage of taking monies from the death benefit before death and using that money for things like long-term care or assisted living or things of that nature. So they in effect have a really good feature that's recently, well, it's been recently brought to market,

but many, many people are finding that to be of extremely valuable because they pay these premiums on a long-term care policy and then they don't pass away. I mean, I'm sorry, that they don't go into a facility or have home care, then on a long-term care policy, the monies are gone. It's like your automobile insurance or your, you know, homeowners insurance. With the permanent policies and the accelerated death benefits, which is what this is called, there are so many things that can be done with those types of policies because they build equity. They build a cash value, a reserve.

And that cash value can be used for a lot of different things. So, you know, there's a lot of choices that have to be made. And that's why I stress, you know, instead of buying it online or, you know, over the phone, you may, you want to make sure that you're working with a competent insurance agent who really is going to have your best interest in mind first and foremost. So fiduciary is what I'm really speaking about. Yeah. You know, I want to make sure I understood that point about the long-term care and the policies because I think that's a really huge point. which is if you have a car insurance policy or a homeowner's policy and you make premiums over year two and three and don't make a claim, you can't go back to the company and go give me all my money back.

They say that's what insurance is. Well, that's in some cases the way that a long-term care policy is if you never needed the long-term care, that's what the premiums were for is just in case. But it did no benefit for you if you never used it. But in those permanent policies, there's a long-term care addendum or rider or feature where, if you need it, it's there. If you don't, then the value of that policy is still growing with dividends or cash value. So is that a good clarification analogy there? I'd say that's a real good clarification. And I appreciate you bringing out those points. Yeah, I think that's, I always, you know, I think guys tend to work off analogies. And as you were describing that, I'm like,

so hold on, you're telling me that, you know, and I think that really is a really neat thing. So talk a little bit about some of that. cash buildup, the dividend is some of the benefits of putting premiums into a permanent type policy because let's face it, you've already said this before. A permanent policy is not for everyone. A term policy is not for everyone. You need to figure out from a respected fiduciary financial professional what's best for you.

But if a permanent policy is good option, the premiums are higher than term. We know that. But why are they higher? Because there's all these benefits. So talk a little bit about some of the. that cash growth and dividend growth? Certainly. Well, you know, people today use life insurance for a lot of reasons other than just death. For example, with cash accumulation in a lot of the policies, the permanent policies,

it will continue to increase each and every year as a portion of your premium is turned back into either, you know, some type of a cash value or even with dividends. And the insurance policies that are issued now, as I mentioned, are much different than they were just a few years back. And when you have equity in a policy, you can use that, as I mentioned, ahead of death. You can use it for those accelerated benefits. You can borrow money from a policy, from an insurance policy at fairly low interest rates these days. So that gives people an opportunity to use that equity for other things just then accumulation. And they can certainly take a loan, they can repay a loan. So there's a lot of different options that people can use when they're buying permanent life

insurance. And some of those, what you said about taking a loan and the interest rate is attractive, isn't it true that it's kind of like, yes, there's an interest rate associated with that loan, but you're paying yourself back. So in reality, if the interest rate is X, you're paying yourself back. So it's going from the left pocket to the right pocket. So it's not really like a traditional bank loan where you're paying all this interest. It's just inside of that policy. That is correct, Mike.

And you know, you have an opportunity with a lot of the companies to either repay the loan or let the loan accrue at a certain interest rate. However, any loan that's outstanding against the life insurance policy will be deducted from the death benefit at that time of death. So it's also good to know if you do take a loan, most insurance agents would like to see those loans paid back so it preserves the death benefit of the policy back to its original value. But again, that's a personal choice. That's something with good counsel. It can be easily, you know, identified and remedied. Yeah, and it's nice to know that that's an option because if you go take a car loan out,

you got to pay it every month. You don't have this. You don't have the opportunity to go, I'm not going to pay for the next six months. Whereas in this kind of a situation, if you did delay those payments and skip months on end, it's fine. It's just that it comes off of the death benefit at that time. So again, get with your financial professional, but this opens up huge amounts of opportunities. I think that's a big piece.

So, you know, if a permanent policy is a good option and you get all these benefits, and you said that these are used really as a financial vehicle, financial tool, how does life insurance like this fit into a retirement plan? Well, life insurance always fits into a retirement plan in my estimation. And the reason I say that is because once you reach that distribution phase or retirement phase, then the cash value can certainly be accessed on a tax-free basis on doing it properly that would be able to provide income that would supplement any other retirement that you have, whether it's a Social Security or a company pension or a 401K. And so those types of things are utilized by many, many people these days. Yeah. And you know, another thing that I was thinking about, you know, when you were saying about the history of life insurance, when people start hearing about taking loans and long term care writers and cash value and dividends, it sounds like, wow, that's amazing. Is this too good to be true? And this must be some new development. Well, this kind of features and benefits in the permanent policies, they've been around for a while, maybe not as long as the very beginning of history. But I,

I've even heard that Walt Disney used a permanent whole life type policy to fund Disneyland. As a matter of fact, that's true. And, you know, the policies have been around a long time. And some of the newer policies can have those additional benefits and riders available. Others, unfortunately, don't. But, you know, it's always difficult when you're trying to replace an insurance policy. You have to make sure that if the older policy is not performing or it's not providing the benefits that you originally were interested in, then those policies may be able to be

exchanged for a different or a new policy. However, the caution there is once you have a life insurance policy and it's a permanent policy or even a term policy, most of the time the insurance companies will allow the term policies to be converted to permanent policies, as I mentioned earlier. And those permanent policies are, you know, there's just, there's so many different things that people can utilize those for. Retirement planning is, in fact, one of the areas that a lot of insurance agents these days are specializing in. And so it's really good to know that there are resources out there. And there are people out there that will help individuals figure out out and decide which types of policies, if any, and or all are best.

Yes, 100%. Because you never can do one thing for all people or put all your eggs in one basket, but these sound like some great options. So when you're talking about cash buildup and all of these benefits, talk a little bit about kind of like the end side of retirement, which is, you know, you've accumulated your money. Now we've got to preserve it. Now we've got to let it build and growth until our retirement years are over. but then it's legacy planning.

So talk a little bit about how this kind of a insurance or this insurance tool can be used for legacy planning and passing along to family and heirs. Certainly. Well, legacy planning is a number one priority for most families. And using life insurance policy is a great way to fund, you know, the benefits that are desired once someone does retire. with that internal cash value or the equity buildup, that can be accessed at retirement or even before retirement by taking out what I mentioned was that policy loan type of thing.

And you could literally turn on an income for life kind of a benefit, which a lot of the newer companies or the newer policies are offering now, where you use that cash value to supplement at your retirement. And what you don't use on that cash value, whatever remainder death benefit is there, you'll still get that as well at the time of death. But, you know, these are all things that are available. It's a lot of it's very confusing to general public today.

So that's why I stress the importance of working with someone who's, you know, got some experience in the business and has been around and knows the value. you in the different types of policies that are available. Well, that's the key point is you hear some things that sound really good, but what does it look like for me? So as always, I think it's so important just to make sure you're getting the right advice from the right person.

So I think that's been so timely here, Gary. If someone is interested in learning more about this and connecting with you, what's the best way they can do that? Well, they can go to my website, which is www. F.S. like Frank Sam, Mansfieldfs.com. And on the website, there'll be a link to my calendar. So if someone wants to have a meeting with us, they can certainly go on that link and schedule a time. And typically, what times we usually do, we do 30-minute initial phone calls with people who might be interested or who are interested. And then if it's a good fit for the client or the potential client in us, then we proceed. If it's not a good fit, we'll let people know, hey, this is not a great fit for you. And, you know, perhaps there's another opportunity elsewhere. Excellent. Well, Gary, thank you so much for coming back on

today. It's been a real pleasure talking with you and learning about the history of life insurance. Well, thanks, Mike. I appreciate the time and hope you have a great rest of your day. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www.com.