By: Mark D. Milbrod, CLU, CLTC
Vice President, ASG
I want to kick off the year by sharing an article I recently read about a family suing for $20 million after losing a loved one in an accident. It got me thinking: Most of us would expect a court to award our families millions if someone else were at fault. But if the “at-fault party” is simply life or bad luck, we often settle for much less. If you were the judge in your own case, what would you say your family actually needs to stay whole?
The Details of the Case The article describes a 43-year-old father of three who tragically died from injuries sustained in a motor vehicle accident. His car was struck by a truck that had clearly run a red light. The family sued for $20,000,000 to compensate for their loss due to the truck driver’s negligence.
This story made me reflect on what we do every day. Essentially, we assess Human Life Value for the clients we represent. We attach a life insurance benefit to an individual to indemnify the family for their loss. Furthermore, we provide Disability Income Replacement for those who lose the ability to earn a living due to sickness or injury. In both cases, we are assigning a Human Life Value.
In the case of the individual above, I wondered: How much life insurance did he actually have?
Even though the family is suing for $20,000,000, will they really receive it? More importantly, how much Human Life Value did that person insure himself for? If this case goes before a jury, would the defense attorney ask how much life insurance the deceased carried? If it were significantly less than $20,000,000, would a jury feel the family is entitled to that settlement?
The Conversation Starter When sitting with prospective clients, share this story. Ask them what their own Human Life Value is. If they were in that same accident, how much would their family sue for? How much life insurance should they own so their family can carry on? Additionally, if they were injured rather than killed, how much disability income protection would they need to replace lost earnings?
To kickstart the conversation, here are some thought-provoking questions to pose:
- “If you owned a machine that spit out $100,000 every single year, tax-free, and it was guaranteed to run for the next 25 years, how much would you insure that machine for?”
- “Most people insure their home for 100% of its value. If we looked at your lifetime earnings as your most valuable ‘property,’ what percentage of that value is currently protected?”
- “If you were injured and couldn’t work, your expenses wouldn’t stay the same—they would likely go up due to medical costs. In that scenario, is your family’s ‘backup plan’ a GoFundMe page or a guaranteed contract?”
If a client says they would sue for $20,000,000, it brings home the reality of their need for significant Life or Disability Insurance.
Why This Conversation Wins Cases This article put things in perspective for me. Human Life Value is a powerful topic. These conversations move the needle from a commodity purchase (finding the cheapest term policy) to a legacy strategy (protecting a multi-million dollar asset: the person).
- For Life Insurance: It highlights that a “round number” like $1,000,000 is often woefully inadequate for a young family.
- For Disability: It frames the income stream as “property” that needs to be insured just as heavily as a home or a business.
It is a sobering thought: If we wouldn’t let a truck driver’s insurance company off the hook for less than $20M, why should we let ourselves off the hook for less?