Suppose you were given the opportunity to "sell" your career. How much money would you have to receive now, with the condition that you could never be paid for work again, to walk away from your paycheck?
In one sense, it would be like an early retirement. You would have a sum of money which would need to support you and your family for the rest of your lives and your time would be free to do with as you please. Maybe you would live a life of leisure? Be a volunteer? Make the world a better place for mankind?
What factors would you use in your calculation? Probably your age, income, marital status, your children's age and future education needs, and your current assets and debts.
Give it some thought. Would you trade me your career for $100,000, $1,000,000, or even $10,000,000?
Now I need to ask, how much life insurance do you own? Is it less than the trade value of your career? Why?
Recently I was working with a young doctor who has a family. His wife did not work outside of the home. He owns about $1,000,000 of life insurance and my calculations showed he needed closer to $3,000,000 but I could tell he was uncomfortable with that amount. So I asked him "Would you trade me your career, with the understanding that you could never receive a paycheck again, for $1,000,000?"
He quickly realized why he was underinsured.

Art,
Great illustration and post. I just got done with selling some Key Man insurance for one of my clients and would have liked to use that line.
Posted by: Carl Lingen | September 10, 2008 at 06:29 PM