Ep 279: LIAM 2026 is here!

Well, before we get started today, I want to give some thanks because I know that you have a lot of different options when listening to podcasts, when listening to the radio, when listening to audiobooks.

So I want to give you a lot of value and I'm just really honored that you give me some of your time.

Picture this on a Tuesday.

There's nothing special about it.

A young dad drops his daughter off at daycare, heads to work and never makes it home.

Horrible car accident.

34 Years old.

The bills still keep coming.

Here's what happens next, and it's not what you think.

It's not the funeral that breaks the family financially.

It's 18 months later, when the mortgage is still due, daycare is still due, and the one income that covered it all, or most of it, is now gone.

This is our first episode of September 2026.

And you may not know it, but September is Life Insurance Awareness Month.

So I hope that this episode will be interesting and fun.

We're going to teach you life insurance, teach you some things that you probably didn't know about life insurance, and just help you to be educated.

All right, Hope that you enjoy this episode.

Welcome to the weekly Wealth Podcast.

I am certified financial planner David Chudick.

This podcast and my wealth management practice are both designed to help the mass affluent to live better lives by how they handle their money.

We talk about financial strategies, prosperous mindsets, and simply how to build true wealth.

So come on and let's enjoy this journey together.

We are in September 2026 and this is Life Insurance Awareness Month.

And I want to talk about some of the common uses for life insurance that you might already understand.

You may have this on yourself.

You may know that you need to get some on yourself.

Then we're also going to talk about some advanced and advance reasons why some of the high net worth and the mass affluent might purchase life insurance and what purposes it would serve to them.

So I'm David Chudick, this is the weekly Wealth Podcast, and here we go.

Let's start simple.

If you're in your 20s, your 30s, your 40s, you have a mortgage, you have kids, and your income is the thing holding the whole financial picture in place.

Term insurance is almost always the right starting point.

Not whole life, not universal life, but term.

So here's my logic.

It's not just math.

You don't need that coverage forever.

You need coverage for the years where your death would actually create a financial hole, a big need.

And this is why the mortgage is still outstanding while the kids are not self Sufficient.

I don't know if you have kids, but kids can be expensive, especially when they're young.

Right?

Well, your income hasn't been replaced by decades of accumulated assets.

So that's a defined window.

And term insurance can match that window, maybe 20 years, maybe 10 years, maybe 30 years.

And it does it for the fraction of the cost of permanent coverage.

So I bring this up because I still talk to people who think life insurance is expensive and complicated and it's keeping them from getting coverage that they, that they desperately need.

And for a healthy young parent, it's really neither.

It can be very simple, very affordable.

So let me give you some actual real numbers.

Okay?

So did you know that a 30 year old male, and this is someone who's healthy, their height weight is within a reasonable limit and they don't smoke.

So if they qualified for preferred rates, which not everybody gets preferred rates, but if they did, did you know that that person could get a million dollars of coverage for about $39 per month?

So think about that.

What do you spend $39 a month on?

Probably, I don't know, Netflix or Drive Thru or who knows what.

Well, for that amount of money, you could trade that monthly premium for a million dollar check being written to your family if the unthinkable happens.

All right?

Now if you purchase $2 million, you could get that for 70, 74, $75 per month.

Again, life insurance is always subject to underwriting.

You could theoretically be declined based on health issues.

But a healthy 30 year old can literally get a million dollars of coverage for around $40 per month.

And what do I say all the time?

I say that I believe that how we handle our money should positively impact our lives and the lives of those around us.

And would it make your life better if you're a young dad, to know that you're spending 40 bucks a month, not a lot of money, and that if something happened to you, if you got, or if you got hit by a car or anything like that, your family would have a million dollar check within a week or two.

And now that sounds like a lot of money, but from that million dollars every month, they're going to have to pay the mortgage, they have to pay all of the expenses that your paycheck was going to pay.

All right, so think about that.

I have some experiences in my family where a relative had a life insurance policy and even on her deathbed she knew it.

And she knew that because of her decision to have life insurance, her family was going to be better off when the Inevitable happened and it worked.

It did its job.

So money when you need it and money when you're in the time of mourning is especially valuable.

So how much coverage should you have?

Right.

Well, the lazy answer is by 10 times your income.

And that's not wrong, it's not incomplete, it's just kind of a ballpark.

So if you make $100,000 a year, maybe a million dollars is not a bad starting point.

But you also have to look at the acronym of dime, that's debt, income, mortgage, and education.

And you add up, like, would you want to pay off all your family's debt?

Would you want to replace all of the income?

Would you want to pay off the mortgage and then provide for education for your kids?

So that's a formula.

And I get people asking me, how much life insurance do I need?

And the real answer is, you don't need any life insurance.

Okay?

It's not required by law, it's not something that you need.

So I change it to how much life insurance do you want?

If you're a young parent and if something happened to you, what would you want your family's life to be like after that day?

And then I can kind of back into it, figure out some life insurance amounts.

We can talk about how much they might cost for you, and then you can decide if you're moving forward.

But suffice it to say, term insurance for the young people can be very inexpensive and it could be something that you'd be really, you feel really proud and also have a lot of peace of mind if you have it.

All right, so that's term insurance.

Now I would hesitate if you're younger, sometimes you may be offered by an insurance agent maybe a million dollar policy for $40 per month, that's a term insurance.

Or maybe a $20,000 whole life policy that may be that same $40 per month.

And they'll tell you that it has cash value, it'll be permanent.

And yes, it would be.

But I think especially for the young people who need to replace their income, you have to first get the right amount of death benefit, the death benefit that will take care of your family.

And then if after you've gotten that from term and you still have money in your budget.

Yeah, maybe some whole life insurance.

Maybe an IUL might make.

Make.

Might make sense.

Okay, so term insurance is a great general starting point.

If you have any questions, email me davidarallelfinancial.com Quick question.

When's the last time you stopped to ask where is my Money actually taking me.

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Your vision deserves 10 minutes.

So let's talk about one of the living benefits for a different stage or typically for a different stage of life.

Alright, so I bring this up.

Modern life insurance can pay out while you're still alive.

And you may not know it, but I hold the CLTC designation that's a certified in long term care on top of my certified financial planner designation.

And this is exactly the kind of thing that lives in the gap between life insurance people and long term care people.

Most people think of those two as completely separate products.

They're not anymore.

And that separation is costing people real money and real flexibility.

All right, so here's a scenario.

You have somebody 55, 60, they don't die, they have a stroke or they get diagnosed with a serious critical illness.

They survive, but now there's real income disruption, there's mounting medical costs, possibly a need for care.

Traditional life insurance policy will do nothing for that family because nobody died yet.

Okay, so maybe you went hiking, you fell, you know, on a cliff, broken neck, you can't walk.

Christopher Reeves, right, Superman, he fell off of a, he had a horsing accident and before he passed away he was paralyzed and his life insurance would not have paid anything until he passed away.

So life insurance of the long term care, or sometimes referred to as a critical illness rider is built exactly for that moment.

It lets you access a portion of your death benefit while you're still living and that's to cover care costs, you know, maybe replace lost income, maybe relieve financial pressure on the family, maybe for custodial care.

But you would not need a separate standalone policy.

So this isn't just a retiree consideration.

This is a 45 year old business owner with a family and no long term care or illness rider on their coverage.

That person has a real gap because the risk of a disabling health benefit before the age of 65 is a lot higher than most people assume.

And most people are planning as if only the only bad outcome is death.

So some of these policies and they do get pretty complicated, but I look at them as when policies because they will certainly pay out as long as you keep them in force by making the premium payments, they will pay out at death because the mortality rate, at least in my country, in my county, is hovering at.

Right, yeah, it's at 100%.

So it's gonna happen to all of us.

So you're gonna die and if you, when you do, your family is going to get the death benefit.

But if you needed long term care and you typically have to trigger two out of the six activities of daily living, the ADLs and have a doctor certify that, then you can start getting a monthly prepayment of your death benefit to pay for that care.

So again, if this sounds like something you're like wow, I didn't know that this existed.

You know, I know that long term care is, can be important.

I don't know how it works but it does scare me because maybe I'm in my 50s and I've had to take care of a parent and I saw that their net worth dwindled because they were spending a lot of it on care.

And I want to protect my money.

Hey, let's do a vision call, right?

Www.weeklywealthpodcast.com vision and let's talk about this concept and let's see if it might be appropriate for you.

And one thing I just want to go off on a side note here.

Life insurance is a great tool.

I have life insurance.

I work with my clients for life insurance.

But look out for anybody who has very serious like life insurance is always the answer for everything.

Life insurance is a tool like anything else.

When you're building a house, sometimes you need a hammer, sometimes you need a screwdriver, sometimes you need a saw.

Anybody, especially those darn social media quote financial advisors that portrays that life insurance, especially what they call a properly structured IUL can be like the screwdriver, the hammer and the saw.

Yeah, that's just a person who's trying to sell you a policy.

That's not a person who's actually putting the right tools in your, your toolbox for your financial plan.

Okay, rant over.

Now let's go into some advanced cases.

Now your typical listeners of the weekly wealth podcast.

These are your mass affluent, these are your business owners, These are your high net worth.

They're often past that 40 year mark or 50 year age where they need term insurance to pay for their kids living expenses.

If something happened to them, they're typically a little bit older and have some other types of risks.

So what if you're a business owner?

All right, if you're a business owner with a partner, ask yourself this question.

If my partner died tomorrow, what would happen?

In most cases, their ownership doesn't just evaporate, it goes to their spouse or to their estate.

Now suddenly you're in business with someone who never signed up to run the company, someone that probably doesn't to want want to run the company, someone who probably may not have the expertise to run the company, and you may not have the cash that you need to buy them out to buy their stake in the business.

Now what you could have is a properly funded buy sell agreement funded with life insurance.

And this solves the problem before it's a crisis.

The death benefit provides cash to buy out the deceased partner share at a pre agreed valuation.

The survivor owner keeps control of the business and the family gets liquidity instead of an illiquid, complicated ownership stake in a company that they don't run.

So when your business partner dies, in essence, unless something had been planned, you're typically going to be their business partner.

You don't want them as a business partner, they don't want you as a business partner.

They own half the company.

You need money to buy half the company.

That life insurance policy could be the answer.

Now these are legal documents.

An attorney would have had to be involved, but it's something that you should definitely be looking at if you're a business owner in a, in a partnership.

Now another thing for the business owners to think about is key person insurance.

Okay, so if you have somebody in your business, could be, you could be a top salesperson, it could be that operations person who quietly holds everything together and whose absence would meaningfully hurt revenue or threaten business.

Keep person coverage funds the Runway to recover, to replace that person, and to wind things down in an orderly way instead of panic.

So if you have a salesperson who's bringing in half of your revenue, if that person got hit by a car, it's a horrible day.

But you are also now down that person who was a big revenue driver.

Now since you would have had an insurable interest in that person, you could have at a point purchased the life insurance and now there'd be some cash, there'd be some liquid cash that can help you and help your business.

Maybe if there is a downturn in revenue, maybe if you have to hire a recruiter to find someone to replace that person or have any other unplanned for expense.

Okay, those are two great places for business owners to think about life insurance.

Now, speaking of business owners, the Readiness360 framework is here and we can help you to determine if you are personally ready to sell your business.

Like what would you do when you're not running your business?

What would your identity be?

We can also see if your business is ready to be sold.

Okay.

Our sellability assessment helps you to determine where you stand on the eight key drivers of business value.

And then of course we can help you to determine if your money is ready for you to sell.

Would you walk away with enough money after exiting your business to give you that lifestyle that you've dreamed of?

So if that is something that concerns you, if that's something that you'd like to Explore, email me davidarallelfinancial.com and let's talk about the Readiness360 framework.

So now let's move on to the high net worth family side.

Here's a scenario that catches most people off guard.

You can be extremely wealthy and still be in a liquidity crisis the most moment you die.

If a big share of your net worth is tied up in a business, in real estate or in concentrated stock or in illiquid business ownership assets, your estate can owe a significant tax bill with a hard deadline.

Almost none of that wealth is sitting in cash.

Okay, so you can't take dirt to the utility company's office and use that dirt to pay the light bill.

You need actual liquid cash.

So the result might be a forced sale.

The business gets sold at a discount rate because it has to move too fast.

The real estate gets dumped in a bad potential market and none of that is the legacy that anyone intended.

So life insurance held properly, often inside an irrevocable trust so the proceeds stay outside of the taxable estate creates exactly the liquidity needed to pay that bill without touching the assets themselves.

The business stays in the family.

The real estate doesn't get fire sale.

The proceeds do the job cash was supposed to do.

And there's a legacy equalization use case worth mentioning if one kid is taking over the business and the other aren't.

Life insurance is a clean way to leave the other children something comparable in value without forcing a business that only makes sense for one of the kids to run to turn into a three way partnership.

Now some life insurance thoughts for charitable giving.

Let's say you started with a million dollar whole life policy that'll be with you forever and you got that to help take care of your family's expenses if something happened to you now you're in your 50s, your 60s, your 70s, and your adult children are doing well, they don't need your support, you don't have any debt to pay off and you might consider leaving a portion or all but maybe a portion of that death benefit to a charity, right?

So if there's a million dollar death benefit and you have two grown adult children, maybe you leave 50% to the children split up and maybe you leave $500,000 to a charity or an organization that would benefit from from that money.

Just a thought, but again, would you feel better on your proverbial deathbed knowing that an organization that you truly care about is going to get $500,000?

I would so give that some thought leaving some of your death benefit if it's appropriate for your situation to a charitable organization.

So once you've got the protection pieces handled permanent insurance and that's a broad term for whole life or universal life or index universal life which would be known as an iui.

Well that has a real legitimate second use and it can function as a savings and growth vehicle.

Cash value grows tax advantage.

You can access it through policy loans, generally income tax free if it's if it's done the right way and it can play a role in it as a supplemental retirement income source or estate planning liquidity tool alongside everything else we've talked about.

So used correctly in the right situation for the right person and that's usually someone who's already maxing out other tax advantaged accounts and has a long term horizon.

Yes, this can be a and when I say a notice I didn't say the only a legitimate planning tool.

But I want to be clear about that before I say to you what I'm about to say next.

If you watch social media, you see a lot of people pitching tax free retirement income market gains with no market losses, infinite banking, and almost always the phrase properly structured IUL gets used like a magic password, as if the only thing standing between you and the too good to be true outcome is finding the right person to quote structure it properly.

So here's my honest take.

When a person leads with a praise properly structured, that's usually the tell, not the reassurance.

The illustrations driving those pitches often use assumed growth rates that are far more optimistic than what the policy is likely to deliver over decades.

The no market losses framing is technically true and functionally misleading.

You're trading downside protection for a cap on your upside and the cost of insurance inside of the policy increases with age, which can quietly eat into preferred performance in ways a slick illustration doesn't make obvious.

So none of that makes an IUL a bad product.

I have an IUL on myself.

It makes an IUL a product that requires an honest conversation, real numbers, and a fiduciary looking at whether it actually fits your situation instead of someone whose income depends on you saying yes.

And that fiduciary distinction matters here more than almost anywhere else in in financial planning.

As an investment advisor representative with Parallel Financial, I'm required to act in your best interest, not just to recommend something that's suitable.

When it comes to permanent insurance, that difference isn't a technicality.

It's the difference between a strategy and just a sales pitch.

So here's the whole picture.

If you're young, protecting your family term insurance is a great foundation.

It can be simple, it can be inexpensive, it could be matched to the amount of years that you'll actually need it.

Now, there's typically some medical underwriting, but you know, let's face it, most people in their 20s and 30s and 40s can probably qualify pretty quickly.

Now, if you do have some health issues, work with a good agent who has access to many different carriers and they can help find the one that might be able to accept you.

All right, so for the people who need to replace income for a specified period of their life, term is a great starting point.

Now, living benefits, like a long term care or chronic illness rider, they protect you about the risk that you don't die, you just get sick and you need custodial care.

All right?

And that risk is more common than the one everyone plans for.

You typically need to trigger two out of the six activities of daily living or have significant cognitive impairment.

And yeah, you know, maybe I've already triggered that one, I don't know.

And once you've built real wealth or a real business, insurance stops being the safety net and starts being the strategic tool for your business, your estate, and the people you're leaving something to.

So these can be similar tools.

Completely different job depending on your season of life.

If someone's pitching you a quote, properly structured anything on Instagram or TikTok, get a second opinion before you buy that policy.

And if today's episode had you thinking about your business specifically, maybe that succession.

Buy, sell.

What happens if you're not there?

Get your sellability score.

Go to www.weeklywealthpodcast.com sellabilityscore.

It only takes a few minutes and it'll tell you more than you think.

Thanks for taking time with me this week.

I'll talk to you next week.

God bless.

The information presented on this podcast is for today general educational purposes only and does not constitute financial investment, legal or tax advice.

Parallel Financial is registered with the U.S. securities and Exchange Commission SEC as a registered investment advisor.

Registration does not imply a certain level of skill or training, nor does it constitute an endorsement by the sec.

All investing involves risk, including the potential loss of principal.

Please consult a qualified financial professional before making any financial decisions.

And here is this week's bonus content.

So you've probably seen, if you have kids, some advertisements to purchase whole life policies for your children and that can, quote, help pay for college.

So it potentially could provide a little bit of money.

But do the math.

Look at the amount of money you would be putting into that whole life insurance policy and then do some calculations or ask your financial advisor to do some calculated calculations that if you invested that same amount, how much would you likely have?

Oftentimes a reasonable historic return would be much higher on an investment.

All right, have a great one.