Summary
In this episode of CareLab, Brandy Archie and Emilia Bourland interview Chris Hotchkiss from the Chris Hotchkiss Agency about the benefits of different types of life insurance, including term, whole, universal, and variable policies. Chris emphasizes the importance of securing life insurance early to protect income and ensure financial security. He discusses using whole life insurance for future insurability and as a savings tool, as well as accessing funds for long-term care. The conversation also covers factors affecting policy costs and the importance of having a personal policy in addition to any employer-provided insurance.
Key Takeaways
- Term vs. Whole Life Insurance: Term life insurance is often cheaper and covers a specific period, while whole life insurance builds cash value and can cover a lifetime.
- Importance of Early Planning: Securing life insurance early can save money and ensure coverage before health issues arise.
- Policy Add-Ons: Riders and additional benefits can be added to policies, offering options like early payouts in case of terminal illness.
- Considerations for Older Adults: Even in later years, it's possible to obtain life insurance, though options may be limited and more expensive.
- Employer-Provided Life Insurance: While beneficial, relying solely on employer-provided life insurance is risky due to job changes or potential loss of coverage.
Transcript
Emilia Bourland, OTR, ECHM, CFPS
Hi everyone. Welcome. Yeah, it's Friday. Welcome to CareLab.
Brandy Archie, OTD, OTR/L, CLIPP
It's Friday.
Welcome to Care Lab. I'm so excited to be here. I'm so excited we have our guest, Chris Hotchkiss from the Chris Hotchkiss Agency. Thank you for joining us today.
Chris Hotchkiss
Hey, happy Friday. Thank you for having me.
Brandy Archie, OTD, OTR/L, CLIPP
Okay now, before we talk about all the important stuff and in your bio and all that good stuff, Amelia is going to challenge us, I'm sure, with a crazy icebreaker question, go.
Emilia Bourland, OTR, ECHM, CFPS
wow, that was actually, this is the least crazy icebreaker question I think I've ever had. So that was, you were oversold, you oversold. Yeah, no, okay, so here's my icebreaker, but I think it's a good one. What is something that you want to learn that has nothing to do with like your work life or personal life necessarily now? Has nothing to do with...
Brandy Archie, OTD, OTR/L, CLIPP
a regular conference version of Icebreaker?
Emilia Bourland, OTR, ECHM, CFPS
creating productive income or anything like that, but something that you just wanna learn just to learn it.
Chris Hotchkiss
that's a great question. I, picked up the guitar in college. I had some buddies that did it. and I'm a big sports guy, so like baseball and hockey and a lot of that athletic stuff kind of came easy to me growing up and the guitar was like speaking French. so I put it down cause I just wasn't very good at it. I think that, if I had the time to learn something, or to try something new, I think I would pick a guitar back up and, and give that a go.
being a little older and a little more patient, I think.
Brandy Archie, OTD, OTR/L, CLIPP
Yeah, that's awesome. Guitar is on my list a long way down, a long way down. But the first thing on my list, I think, and this is probably surprising, is crochet. So I know how to crochet like a pot holder. I want to learn how to crochet something else that's a little bit more useful. My grandmother taught me how to crochet a long time ago. I have made a scarf.
Emilia Bourland, OTR, ECHM, CFPS
Yeah, totally, Brandy.
Brandy Archie, OTD, OTR/L, CLIPP
but I never put any time or effort into actually learning how to do the crab. And now actually somebody that I went to high school with, she has a whole clothing line and boutique with crocheted clothing and it looks fire. And so I'm not trying to be on that level, but it'll be nice to be able to crochet some stuff.
Emilia Bourland, OTR, ECHM, CFPS
So that's so funny. So I want to love to knit. That's not my, I want to love, I know. So we had to, yeah. So we actually had to learn to knit in OT school, in grad school for, it was the first time that we did task analysis, which if you're in OT and you went to OT school, you know, is actually, it is so central to being an occupational therapist to learn task analysis.
Brandy Archie, OTD, OTR/L, CLIPP
You want to love him, but you don't really want to do it.
Emilia Bourland, OTR, ECHM, CFPS
but it was also so painful. So we had to do it, we had to make like caps and actually all of the hats were donated to charity afterwards. So that was really nice, but we had to make knit caps and then we had to do a task analysis for every single thing that went into creating that. And I wanted to like it so much and I actually started knitting afterwards. I thought it would stay fun. Well, anything is fun once you're not writing down a...
Brandy Archie, OTD, OTR/L, CLIPP
step by step of every single thing that you have to do in order to do it.
Emilia Bourland, OTR, ECHM, CFPS
100 page task analysis for how to like knit and purl. But I just found it so tedious. And I like every once in a while though, I'm like, it looks so cool when people are knitting and it looks relaxing. I wanna relax like that, but I don't know.
Brandy Archie, OTD, OTR/L, CLIPP
This doesn't sound like the answer to your question. It doesn't sound like this is something you want to learn.
Emilia Bourland, OTR, ECHM, CFPS
It's not actually, it's not. It's just something, your answer reminded me of the fact, like, man, I really want, I want to want to knit, but I don't. Maybe I'll try again someday. But so, so no, my answer is, is similar to Chris, actually. I would love to like get really good at the ukulele. Yeah, I think, I think it'd be cool to play guitar, but my hands are kind of small.
Chris Hotchkiss
Hahaha
Brandy Archie, OTD, OTR/L, CLIPP
interesting.
Emilia Bourland, OTR, ECHM, CFPS
I'm sure they make small guitars, you know. And also I think guitar, because it has six strings, is probably infinitely harder than ukulele. And I'm not setting to make this too difficult for myself. That's the level that I'm on right now. So like ukulele, I think, is pretty easy to learn. It's tiny, so it wouldn't have to like reach a whole lot. And I just think that ukulele is a happy little instrument. It's fun to like, you could pack it in a bag and bring it along and like sing a little song.
Chris Hotchkiss
Hahaha
Brandy Archie, OTD, OTR/L, CLIPP
Got it.
Brandy Archie, OTD, OTR/L, CLIPP
Sounds good.
Emilia Bourland, OTR, ECHM, CFPS
So yeah, that's what I want to do.
Brandy Archie, OTD, OTR/L, CLIPP
I have a feeling that listeners are going to be like, ukulele is extremely hard. This is a challenging subject. I can't believe you degraded it in that way and thought it was just a little thing you could pick up. I have no idea. But it would be interesting if that's actually the truth.
Chris Hotchkiss
Ha ha ha!
Emilia Bourland, OTR, ECHM, CFPS
Probably, probably. I've just insulted an entire group of musicians. I'm sorry. But also, like, I'm telling you that I really like it and I think it's great. So. Yeah.
Brandy Archie, OTD, OTR/L, CLIPP
You
Brandy Archie, OTD, OTR/L, CLIPP
Yeah, cool. Well, we are super excited to have Chris Hotchkiss here. And while he takes a break from not actually learning how to play the guitar and spend some time talking with us about how insurance can be beneficial to us. And so Chris and I go way back here in Kansas City, and that's how we met. And I've learned so much from you about how to protect assets, but also plan.
for the future in aging in place or aging wherever you're going to do that at, through insurance products. And so that was new information to me when I learned it. And so it's super valuable, especially at a time period before you're needing help. That's like how insurance works. And so that is why I think it's really important that we had him on so that
the sooner you can know this information, the better. He's been in the insurance industry for over 12 years and is very familiar and passionate about life insurance and how it helps people in the event that their family member or significant other passes away. And so Chris Hotchkiss, welcome to CareLab.
Chris Hotchkiss
Awesome, thank you again for having me. I'm excited about the topic today.
Brandy Archie, OTD, OTR/L, CLIPP
So let's talk, let's start at the beginning and say, just tell us what are the types of life insurance and let's start there.
Chris Hotchkiss
Right, lots of different types. I kind of narrow it down to four or five that I think are important for me that I find don't have all the fluff. You know what I mean? You want something that gets straight to the point and really protects what you need. So starting the top term life insurance, whole life insurance, universal life insurance, variable life insurance and universal are kind of the same. And then final expense insurance. Those are the five that I really
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Chris Hotchkiss
believe in that I think that are very important. The most important for me is term life insurance, okay? It's the cheapest option for people that are on budgets, but it also gives you the most bang for your buck in my opinion. Dr. Brandy, you and I have talked about this, you know, over the years with kind of what we did with you.
and how important it is to protect your income earning years. And that's what term life insurance really does. Whole life insurance.
Brandy Archie, OTD, OTR/L, CLIPP
Can you give us an example of how like you'd use the term life insurance, how you maybe if you feel comfortable talking about how you use term life insurance for like your kids and all that.
Chris Hotchkiss
I'm sorry.
Yep, so what? So so me I'm a gambling man. I enjoyed that sports betting became legal on the Kansas side. My office on the Kansas side, so every Friday before I go home, I'll make a $5 bet here and there. One thing I'm not willing to gamble though is the financial future and success of my family if I wasn't there to provide so term life insurance for me. How I use it is if something were to happen to me, I am never going to put the burden on my wife.
to figure out how to pay the bills. Her burden should be how to help our family get through what just happened and for her never to work again. My kids are a little older now than they were when I got the policy. I have an 18 year old and a 13 year old, but. Still, I think. Kids that young and and losing a father or a mother.
that young would be devastating and to have that other parent have to go to work 15 hours a day to pay the bills just to keep them to survive, you know, keep the lights on the food on the table I think is terrible. So the one thing for me that I like to convey when it comes to term life insurance and why it's important. Everybody knows of the website GoFundMe. Yeah.
Emilia Bourland, OTR, ECHM, CFPS
Mm -hmm.
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Chris Hotchkiss
Did you know that 74 % of the GoFundMe's right now, active GoFundMe's are for life insurance. It's for people that have had significant others die suddenly, for college funds for their kids, to help pay the medical bills from when it happened, to put food on the table and pay the bills and just to help them stay and continue the life that they had built, right? 74 % of GoFundMe's. It's insane.
Brandy Archie, OTD, OTR/L, CLIPP
That's a crazy amount. That's a crazy amount.
Emilia Bourland, OTR, ECHM, CFPS
Yeah, yeah, that's that's nuts.
Chris Hotchkiss
Yeah, so I use my term life insurance that way. It protects my income years. I got it. I got a 30 -year term when I was 34. It ends when I'm 64, which is right about retirement. And at that point in time, with other avenues that I've taken with my financial planner and everything else, I'm able to self -insure at that point.
Emilia Bourland, OTR, ECHM, CFPS
Can you tell, what does that mean to self -insure for people who might not know?
Chris Hotchkiss
So, yeah, self -insure would be that I have saved enough money and that I have planned well enough for my retirement. And my years as I get older that I can afford when I pass away that my will and my assets will pay for my.
Emilia Bourland, OTR, ECHM, CFPS
Gotcha.
Brandy Archie, OTD, OTR/L, CLIPP
Thank you.
Chris Hotchkiss
Yeah.
Brandy Archie, OTD, OTR/L, CLIPP
Okay, so that's term and then like, what about, go ahead.
Chris Hotchkiss
yeah, so that's where I was just going next. The whole life insurance and that's something doctora many that I've done with my kids. We've done it with your children as well. A lot of people don't think that they should put life insurance on their kids. They get a little creeped out by it and I totally get it. What we're doing though is we are. We are we're locking in their future insurability, OK? There's a bunch of.
I have to say this right, like you know there's some some childhood things out there that are pretty significant. My son has a friend in his class and he's a about to be an athlete or that's beat cancer twice. Right, lots of kids that I see today. Childhood diabetes. It's not an epidemic per se, but it's out there, right? So that kind of stuff will impact their life for when they turn 30 and have a wife and kids. They're going to be ineligible.
Brandy Archie, OTD, OTR/L, CLIPP
Mmm.
Chris Hotchkiss
for a lot of types of life insurance because of that path. Doing it, doing a whole life policy for your kids really locks that in where you can put endorsements on there to where guaranteed purchase options. So no matter what, for eight times in their life, they can buy more and more and more without medical testing, no matter what had happened in the past. Just keep adding to it and adding to it and adding to it. So that's one of the reasons.
Emilia Bourland, OTR, ECHM, CFPS
Mm -hmm.
Chris Hotchkiss
My best friend who got me into this industry had a great point too when he was teaching me 12, 13 years ago. When I asked, why do you do it? He goes, you know what? If something were to ever happen to my kids, I am not going back to work for a while. I need to keep, you know, I put together what was left of my family. So that's another reason I think that that's important.
And again, I'm not buying. He said it great. I'm not buying it for me. I'm buying it for them. Something you pass on to them as they get older and things like that. So that's kind of the whole life insurance for your kids. Whole life insurance for adults is the same. Lots of ways to do it. And this is where you can use whole life insurance to pay for your funeral. OK, whole life insurance can also be used as a savings account. It grows cash value.
Unlike the term, term life insurance, when it ends, it ends, it's done. Nothing you can do with it. Whole life insurance, though, it grows that cash value, right? So there's actually pot of gold at the end of the rainbow, right? So that's why I think that's the big difference between term life insurance and whole life insurance. And I think that's why whole life is important as well.
Emilia Bourland, OTR, ECHM, CFPS
So let me ask you some questions to clarify about that. Cause I've thought like as an adult about whole life insurance as an adult, but I really hadn't thought about it as like something that you purchase for kids, which makes a lot of sense. You know, when you're talking about it, there are so many unexpected things that can happen throughout life that will make you uninsurable. And at the time it might not seem like a big deal, but later on down the road, it actually can become really problematic. And so that makes a lot of sense. I guess my question would be,
Chris Hotchkiss
Yes.
Emilia Bourland, OTR, ECHM, CFPS
And since you can add coverage on to whole life as you go, the other concern, I think, for a lot of families, especially when you're starting out, when you have young kids, is you might not have a ton of disposable income at that time in your life to also put towards a whole life policy for your kids. So is that something that people can purchase relatively inexpensively for their kids when their kids are young and then just as needed, you can add on as your income grows or as your family grows or as...
Chris Hotchkiss
Yes.
Emilia Bourland, OTR, ECHM, CFPS
As you know, like you said, you pass it on to your kids and when they have their own income and career, then they can add on as they need to. Is that right?
Chris Hotchkiss
That's correct. So, whole life insurance for adults. So, I'm 44. A whole life insurance policy for me is way more expensive than it is for, let's say I had a son that was four, right? We're talking anywhere between 28 and 34 bucks a month for a $50 ,000 whole life policy for a kid. So, we're not talking a ton of money. We're talking four trips to Starbucks, right? If you can...
Emilia Bourland, OTR, ECHM, CFPS
wow.
Chris Hotchkiss
avoid your four trips to Starbucks and make your coffee at home for those days that month and you've paid for your child's life insurance policy. With what it costs to eat out today, right? Brainy, I'm sure you know. With kids and everything else, right? It's not cheap. Even, you know, my daughter getting out of the house and it's just me, my wife and my son. I mean, that's still a 70, $80 bill. If I had...
My daughter still in the house eating dinner with us. I bet you I'm paying for all my life insurance policy on one All of my life insurance policies on one time eating out So it is a huge myth life insurance is not affordable Or that you need a ton of disposable income on it That's a huge myth But yeah, the younger you are obviously the cheaper it is so you're talking anyway between 28 34 bucks for a kid a month
Brandy Archie, OTD, OTR/L, CLIPP
One trip.
Emilia Bourland, OTR, ECHM, CFPS
Mm -hmm. Yeah.
Brandy Archie, OTD, OTR/L, CLIPP
So my question is, are there any ways to think creatively about using life insurance or maybe some other kind of insurance to be able to get some cash out before you pass away to pay for care?
Chris Hotchkiss
Yes, absolutely. So on term policies, especially term policies that have the big amount, right? So let's say a million dollar term and something happens to where maybe you have cancer or whatever, you are able to dip into that up to 65 % of the death benefit before you die, right? To help pay for the care, to help your family.
maybe if they're not working to help pay the bills, things like that. So life insurance definitely has that option to tack onto it to allow you to gain some of those funds before you pass away to help with that long -term care or that'd be in a term like policy as well.
Brandy Archie, OTD, OTR/L, CLIPP
and that would be in the whole life of me.
okay. Both of them.
Chris Hotchkiss
Yeah, in both of them. Absolutely.
Emilia Bourland, OTR, ECHM, CFPS
Is that in, but it can't possibly be in like every term life policy. It's gotta depend on the policy and the carrier and stuff, right? Yeah.
Chris Hotchkiss
Right, it's not automatic. It's not an automatic, it's entered into the policy. It's something that it's like an endorsement you put on. It's kind of like your car, right? You drive your car and you have car insurance. Well, do you have the emergency roadside? And do you have the rental reimbursement? It's just all add on stuff. Pennies on the dollar really that help protect you in that instance where you have that terminal diagnosis and you know, you want to get access to some of that money faster.
Emilia Bourland, OTR, ECHM, CFPS
Mm -hmm.
Emilia Bourland, OTR, ECHM, CFPS
Okay, so what then is the difference? So I was familiar, at least terminology wise, with like term and whole and generally how they work, but the idea of universal and variable life insurance is new to me. Can you say what those things are?
Chris Hotchkiss
Mm -hmm.
Chris Hotchkiss
Yeah, so this is this is complicated. The universal life and variable life is. So. So let's just start with with universal life. It's a flexible premium, but it also includes flexible death benefits, right? So if you over fund it, let's say you have a little more disposable income and you're putting more money into it. The death benefit grows better.
Emilia Bourland, OTR, ECHM, CFPS
Yes, yes, that's what I was hoping for. Amazing. Let's do this.
Brandy Archie, OTD, OTR/L, CLIPP
I have to dig into complicated topics, so it's fine. We're good.
Chris Hotchkiss
grows faster, the cash value grows faster, right? But as you get older, and let's say you still funded at that same rate, but as you get older and your health declines, well, then that death benefit goes down, right, depending on how the markets work. This is something that I don't recommend that often because of...
the validity of it, right? Like the volatility of it is the better word for it. So let's just say, I'll give you this example and this is kind of how universal life works. Okay, imagine there's a giant bucket, okay? There's a spigot on the top that's dumping water in, okay? And then there's a spigot on the bottom of the bucket that's letting water leak out. Okay, does that make sense? So the spigot on the top that's putting water in is your premium, right? The water in...
Brandy Archie, OTD, OTR/L, CLIPP
Yep.
Chris Hotchkiss
the bucket is your death benefit. So the more money you put in, the faster the water goes up, the higher your death benefit is. The older you get, and as the market changes, that spigot on the bottom opens bigger and bigger, and it goes from like a drip to a trickle to where water's coming out a little faster, right? And if you don't change up here, where you're funding the policy or putting water in the bucket, right? The water in the bucket slowly goes down, right? So you could be 80, have a...
a universal life policy that you've paid into for years. And at the start, you know, it was great. But over time, that death benefit has gone down, down and down. So that's kind of why. And that's not all universal life policies by any means. That's just some of the older ones that were kind of sold in the 80s and early 90s that are doing that. Universal life policies now are a little more stable. Right. But again, that premium amount is going to be way higher.
and it's gonna grow cash value. But again, it's for people that have more disposable income that are trying to use life insurance maybe as like a savings account or things like that. Does that make sense?
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Emilia Bourland, OTR, ECHM, CFPS
Kind of. So what I'm understanding is it's basically, it's tied to the market. It's almost like having, it's almost having another retirement account basically, but this one is specifically for a death benefit. And if the market goes up, then your money grows. But if the market goes down, then your money goes away. So it's closer to playing the stock market than other kinds of life insurance.
Chris Hotchkiss
It is.
Chris Hotchkiss
Same with, yep.
And same with variable, variable life insurance requires an active management understanding of investments, right? So that's very much market tied on the variable life insurance. So when it comes to me and kind of how I discuss life insurance with clients, I don't really take this route. I think that for me and my beliefs on what life insurance is, term life insurance and whole life insurance, a balance of that.
is what you need. You know what I mean? So financial advisors, really good financial advisors will use universal and variable life insurance as part of their as part of people's retirement plans. I'm an I'm an insurance guy right? I I'm I specialize in life insurance as well. I don't specialize in retirement plans. That's just not my cup of tea right? That's why I have friends that do that and if people are interested in in that kind of stuff
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Brandy Archie, OTD, OTR/L, CLIPP
Yeah.
Chris Hotchkiss
I would rather them talk to the expert that fits their retirement plan, not something through me.
Emilia Bourland, OTR, ECHM, CFPS
Makes sense.
Brandy Archie, OTD, OTR/L, CLIPP
Right. So I got a question. So let's say 45, 50, 55. I've never had a life insurance policy. My mother doesn't have one either. And I see how hard it is for us to deal with her care. And we really don't have a lot of resources to work with to help care for her. And I'm hearing you talk about these abilities to, one, make sure that my funeral is covered, but also to draw down on some of it.
Chris Hotchkiss
Mm -hmm.
Brandy Archie, OTD, OTR/L, CLIPP
in order to pay for my own care when I get older, is it too late for me to get a life insurance policy if I'm not a kid or I'm not just beginning my career and I'm like in my 50s?
Chris Hotchkiss
No, it's not. If your health is good, right, which people that are between, you know, 50 -55, there's probably some issues there. Not issues that necessarily make you ineligible, but issues that will definitely affect the bottom line and the price of it. In something like that, let's say, let's just say 60 to 65, right, maybe the best course of action, because a term policy won't work.
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Chris Hotchkiss
You might be able to get a 10 year term that gets you to age 70 for not a lot of money. And I bet you it would cost you about 140, 150 a month, right? Maybe that's part of the budget, but maybe it's not. For people like that that I talked to that are worried about that, I kind of suggest either a whole life 100 policy, which is a small whole life policy that they pay on until they're 100 or they pass away.
It does grow cash value. It is more expensive, but at least it'll never go away. Or I talk to them about a final expense insurance policy, something that is, you know, simple that when they do pass away, their kids aren't like, let's pass the bucket and see what we can raise to cover this funeral. You know what I mean? So, 40, 40, 45 is definitely not too, too old. 50, 55, you're not too old yet. but you're going to see.
the prices really skyrocket there. And when you get to 60, as far as term insurance goes, you're really kind of over the barrel on what your options and payments will be. Does that help?
Brandy Archie, OTD, OTR/L, CLIPP
That helps a lot. So let's just say I work at a corporation and they give me benefits and one of those benefits is life insurance. Aren't I covered? Isn't that good enough?
Chris Hotchkiss
Yeah, yeah. No, it's not. It's great. I will never knock it. I'll never knock a company that gives that stuff. And I tell my clients that yes, you always take it because it's pennies on the dollar, right? It's probably the average is probably one and a half times your salary. So that's definitely not enough to help your family survive. And unless you plan to stay at that job till retirement, which is highly unlikely,
Emilia Bourland, OTR, ECHM, CFPS
Yeah
Brandy Archie, OTD, OTR/L, CLIPP
Thank you.
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Brandy Archie, OTD, OTR/L, CLIPP
Mm -hmm.
Chris Hotchkiss
then you're gonna lose it, right? So let's say, Brandy, you switch jobs. Well, life insurance policy doesn't follow you. Let's say, and this is a true story. Dr. Brandy, I've shared this with you. I have a really good friend, a fraternity brother from college that wife...
was diagnosed with breast cancer when she was pregnant with their daughter, daughter same age as mine, born a couple of months after my daughter. Anyways, long story short, she passed away. Her company let her go before she passed away. And when my buddy went to collect the life insurance policy through work, they said, sorry, we fired her. It's not valid. Not illegal by any means, immoral probably, you know, pretty.
pretty shady and it wasn't a small company either. It was a big big corporation in the Casey area. So that's that's the risk you take. When you have a life in life insurance policy through work, it's pretty much an accident only policy. Again, always take it. You know it's probably $2 .50 out of your paycheck every week for one and a half times your salary, but that's why it's important to own your own policy outside of work because.
that term policy will stay the same price from when you start it to when you end it. And it's not going to go away because you decide to change careers or companies.
Emilia Bourland, OTR, ECHM, CFPS
Yeah, I feel like also it would sure stink to be stuck in a job because that was the only life insurance that you could get, even if it wasn't enough. But like, let's say you had a life event happen or a health event happen that made it so you were you couldn't get another policy. It would really stink to be stuck in a job or be worried about that as as part of what was going to define how you made career decisions or life decisions going.
Chris Hotchkiss
Yeah.
Chris Hotchkiss
Yeah.
Emilia Bourland, OTR, ECHM, CFPS
forward because you would have to really think about the risk that you were taking and leaving that behind. So it makes a lot of sense to have a policy that you own on your own and you take it with you wherever you go and it's not dependent on your employer. Although I would, I have to think, yeah, like if they're offering you extra insurance for pennies on the dollar, the answer is yes, right? Heck yes.
Chris Hotchkiss
up.
Chris Hotchkiss
It's always yes. It's always yes. It's always yes, but but putting pushing on your chips in the middle of the table and that's the hand you're holding for for protecting your family. That's not very good. It's a pretty big gamble.
Brandy Archie, OTD, OTR/L, CLIPP
Yes.
Emilia Bourland, OTR, ECHM, CFPS
Mm -hmm.
Emilia Bourland, OTR, ECHM, CFPS
So it seems like the takeaway that I'm getting here is it is important to get a policy that hopefully is going to work for you in the long term and the short term, but it's really important to get that policy sooner rather than later. So like if you're thinking about it and for some reason you're waiting, probably the
best idea is to explore getting that sooner rather than later because you just don't know what can happen that would make you ineligible for a policy or for increasing a policy or something like that later on. And it's going to be cheaper the earlier you buy in. Is that a good summation?
Chris Hotchkiss
Yes.
Chris Hotchkiss
Well.
Chris Hotchkiss
That's correct. Yep. Yeah, you know and and when I was kind of putting some some thoughts together on this and kind of knowing where we were going to go in this conversation I did do some not some research but just put some notes down on kind of the things that do factor into kind of the cost of life insurance you know and the top the top top is age right let's say a 25 year old
to a 35 year old. That's a huge, that's 10 years. It's a huge difference in premiums you'll pay over the years of the policy. Gender is another one. Obviously, boys are dumb, girls are smarter. Let's just be real honest there. That's why car insurance is cheaper for the ladies than it is for the guys. But statistically, yes, absolutely. And I can lean on Max from my own life to know that that's not wrong.
Emilia Bourland, OTR, ECHM, CFPS
We exhibit less risk -taking behavior. Less risk -taking behavior.
Brandy Archie, OTD, OTR/L, CLIPP
Yes.
Chris Hotchkiss
That isn't 100 % correct and I'm not mad about it. So things like that. Health status, right? So when we're 25, we're in pretty good shape, right? We're young and life hasn't hit us real hard yet. You know, 35 things change, right? The stresses of life, the stresses of having kids, a lot of that stuff has effects on you, the way you eat, the way you exercise, things like that. So...
Your health status is a huge part of it. Your lifestyle choices, right? Are you a smoker or do you chew or do you not? Do you take time to exercise three, four times a week? Do you want to go dirt track racing? Are you that guy that wants to go race cars? I was in a town called Paducah, South Dakota.
Sorry, no, no, Pukwana, South Dakota. And there were lawnmower races. Have you ever heard of lawnmower racing? Well, these dudes were on lawnmowers, riding lawnmowers, going like 55 miles an hour around a dirt track. And I'm like, yeah, that guy's probably, it's insane. It's a fun time to watch. It's great. But it's like, God, if you've got life insurance, I hope your guy doesn't know you do this. Skydiving, you know,
Emilia Bourland, OTR, ECHM, CFPS
Yes!
Brandy Archie, OTD, OTR/L, CLIPP
Like getting on a tractor?
Emilia Bourland, OTR, ECHM, CFPS
Yeah, they're crazy.
Emilia Bourland, OTR, ECHM, CFPS
Can I just say like, man, life insurance people and therapists at a party, we would be such downers, because you'd be like, man, you should probably have some life insurance. You're going to act like that. And Brandi and I would be like, have you heard of TBIs and spinal cord injuries? Like, you don't want a part of that. Just get down. Just get down like real party poopers.
Brandy Archie, OTD, OTR/L, CLIPP
downers.
Brandy Archie, OTD, OTR/L, CLIPP
You know what can happen.
Chris Hotchkiss
I know. Yep. Yep. Guilty. Guilty. Another thing that factors into it is your occupation, right? Are you the guy that wants to dangle from a skyscraper cleaning windows? Are you the guy that's in a 50 -foot tree cutting it down? You know, thank God for people like that, right? It's just not my cup of tea. But that plays a factor into kind of the rates you pay. Your weight and BMI. Again, that goes back to lifestyle choices a little bit, I think.
Emilia Bourland, OTR, ECHM, CFPS
You
Brandy Archie, OTD, OTR/L, CLIPP
I'm sorry.
Chris Hotchkiss
on what can affect it and stuff like that. So the other things that really affect the price, the type of policy, obviously terms cheaper, whole life's more expensive, your coverage amount, right? If you want a big million dollar term, that's gonna be more expensive obviously than a $250 ,000 term. The policy length, and now this is important, term policies come in, for American family at least, five or 10, 15, 20 and 30.
A 20 year term is going to be cheaper than a 30 year term, right? Because obviously it's a shorter window of risk that the company is covering as opposed to the 30. The writers and additional benefits that we've talked about, you know, previously on the podcast, those add a little bit more to the rate you pay. And then payment frequency. So this is something that people don't realize. If you pay the year in advance, if you just pay your life insurance premium once a year, you save a bunch. Same with quarterly or
twice a year, right? So the monthly payment is just, it's the most expensive option. And it's the same thing with your car insurance or other insurance stuff you pay. You know what I mean? So.
Emilia Bourland, OTR, ECHM, CFPS
So I actually, I just found that out looking at my, so I'm finally doing my long -term care insurance policy, which I have been putting off, but I knew I needed to. So I finally was like, okay, I'm gonna pull the trigger on this. And I found out that if I just pay it in a lump sum, you know, if that's possible, then it's cheaper than doing a monthly payment. I was like, dang, that's good to know. I didn't know that for life insurance though, too. See, these are great things to know.
Chris Hotchkiss
Yeah, way cheaper. Yep.
Chris Hotchkiss
Yep. yeah.
Emilia Bourland, OTR, ECHM, CFPS
Okay, I have one more question for you. Actually, I have two first. If someone wanted to call you and ask about life insurance for themselves or get ahold of you, like what would be the best way for someone to reach out to you to ask about life insurance since you're obviously so knowledgeable about this, this is what you do for a living.
Chris Hotchkiss
Right? So I'm licensed in Kansas and Missouri. So unfortunately, I can only have conversations with people in those states due to the licensing laws about kind of policies that American family offers. But I'm here to help anybody that has questions about it. So the best way to get ahold of me is our office number. It's 913 -268 -8200 or my email, which is hilarious, by the way.
C -H -O -T -C -H -K -I, so chachki at Amfam .com. Apparently when they made their email addresses, they couldn't put the two S's on the last part of my name. So, it looks, hey, chachki at Amfam .com and we're in good shape.
Emilia Bourland, OTR, ECHM, CFPS
That is hilarious. Okay, second follow -up question then is for people who wouldn't be able to work with you to get life insurance, obviously people could be listening to this anywhere, how do they find a reputable life insurance broker to work with to really meet their needs?
Chris Hotchkiss
That's a great question. I would first start with the person that provides their property and casualty insurance. A lot of those companies do that, like American Family does all of the above, and they're able to kind of add some other discounts to your other policies by doing that. The next person I would talk to, because if the company that you're doing that through doesn't, I would speak with your financial advisor.
if you have one because a lot of financial advisors offer the same policies. Some financial advisors are like me. That's not their area of expertise, so they have referral partners that they refer that business to that are trusted and very good at what they do. So those would be the two paths that I would take if you're looking for somebody that's reputable. What I would try to avoid
and this is just me personally, is searching online and putting your info in because you will be bombarded with phone calls and you will not be able to really control the narrative because it's really like sharks smelling blood in the water, right? And it's kind of high pressure stuff. So I would always try to find a referral for somebody that has worked with that person that knows exactly how they work.
Brandy Archie, OTD, OTR/L, CLIPP
Well, Chris, I'm really appreciate all the knowledge it was in that to share today and for coming on the podcast and helping us understand both the simple and the complex versions of life insurance and how it can be useful to probably just about everybody who's listening and that if we haven't already done it, we should get on board. So thanks for joining us.
Emilia Bourland, OTR, ECHM, CFPS
Yeah, thank you so much for being here.
Chris Hotchkiss
Again, thank you for having me. It's been a blast.
Emilia Bourland, OTR, ECHM, CFPS
All right. sorry, go ahead, Brandy. You got this. I was just going to say, so if you thought that this episode and the information was valuable, please make sure that you are hitting that little button to subscribe, that you're clicking the little thumbs up like there so that we can keep bringing you Care Lab every Friday, which is when new episodes drop. We'll see you next time right here on Care Lab. Bye.
Brandy Archie, OTD, OTR/L, CLIPP
No, go ahead, wrap us up.
Brandy Archie, OTD, OTR/L, CLIPP
Bye.
Chris Hotchkiss
See you later.
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