Brunch & Budget

b&b241: The Racist History of Insurance & Why You Need It Anyway

February 13, 2021 Brunch & Budget
Brunch & Budget
b&b241: The Racist History of Insurance & Why You Need It Anyway
Show Notes Transcript

Hey there,

It's Black History Month, and we're always ready to call out some sh*t about the finance industry. Here's some f*cked up history for you:

The history of insurance is racist.

NY Life started in the 1800's by insuring enslaved Africans lives - if a slave died, the insurance company would pay the slavemaster for their life. Fastforward to the 80's and 90's when Walmart started buying "dead peasant" life insurance policies where if an employee died, Walmart got paid out. POC have always had a complicated relationship with insurance - it's an exploitative industry where salespeople are incentivized to take advantage of their clients. It's also one of the best ways to protect the wealth you've built and pass it on to the next generation. This week, we explore the racist history of insurance and why you need it anyway. By the end of the podcast, you'll know exactly what insurance you need to buy to protect your wealth at every stage of life.

Music Featured in This Episode:
Dead Peasant feat Sana Sana by PAN(D)EMIC
R.I.P Disability [Rework] by Shawn Crutch
Segregation by Ondaway

Dyalekt:

When your budget feels like it's pushing a boulder up the hill and you're looking over your shoulder gets better and as have no children, they're lying to you on social, you're looking for something real good with budget budget and get the skills to stop avoiding your bills, book and a bunch of budgets show about personal finance and racial economic inclusion with your host, Pamela Pelley, certified financial planner to help you stop avoiding your finances. Your budget calm I'm Sam from out of dialogue ready to take a bite out of your budget. I'm your sound provider dialectic. here's your host, Pamela capelle. It budget as part of the racing wealth podcast now.

Pamela Capalad, CFP, AFC:

We are Hello. Hi, everybody. I love that you have that. Totally memorized. Now.

Dyalekt:

It's not even really memorized. I only know the beginning of it. And then I have to make up the end because I'm still not happy with it. Every time until I'm happy with it.

Pamela Capalad, CFP, AFC:

I love it. I love it. It's

Dyalekt:

a freestyle, right? Yeah,

Pamela Capalad, CFP, AFC:

it is. Thank you everybody for tuning in. We are at the beginning of Black History Month. And we want to talk about insurance. Yeah.

Dyalekt:

Because you know, that's the thing people think about Black History Month, right? They think about was it Rosa Parks, Dr. King and insurance

Pamela Capalad, CFP, AFC:

and Geico.

Dyalekt:

Shawn, y'all know that they replaced? It was a black man who been at Geico was they replaced it with the gecko, the gecko was actually front. No.

Pamela Capalad, CFP, AFC:

Wait a second, the duck? No, it's

Dyalekt:

the Geico Gecko.

Pamela Capalad, CFP, AFC:

Wait. Is the duck oh my gosh, there are too many animals involved in insurance. That's

Dyalekt:

actually a weird thing. Like, we're kidding about. Black people didn't invent Geico. But there's a lot of racist history to insurance that we want to talk about ends we're

Pamela Capalad, CFP, AFC:

talking about today. Clearly like,

Dyalekt:

but that's often when we talk about racism in representation. There's often this idea of people replacing people of color, particularly black people with animals, right. That's like, weird bringing up like, oh, the Geico thing. Like, why does insurance do that? And I mean, most State

Pamela Capalad, CFP, AFC:

Farm got the president from 24.

Dyalekt:

Well, State Farm is all about using black people as their mascot because after they use that, oh my god, I'm 24. Then they went to the NBA. And Chris Paul, they've been all up in the NBA players have sons. They're like,

Pamela Capalad, CFP, AFC:

this is our niche. Okay, we're talking about the racist history of insurance and why anyway, insurance is not a fun topic. It's something though that is the number one way to protect your wealth and the number one way to protect your generational wealth.

Dyalekt:

So we will, let's stop and talk about that. Okay. Lots of folks have lots of different definitions on what protecting your wealth means. So what do you mean by it's the number one way because that was the number one way to protect your wealth?

Pamela Capalad, CFP, AFC:

Well, the thing is that we're really we spend a lot of time accumulating wealth, right? We talk about investments, we talk about saving, we talk about budgeting, we talk about increasing our income, and all of those things. But what happens when you get a big medical bill? What happens when there's a sudden death in your family? What happens when you're disabled, and you can't work anymore? Right? What happens when there's a leak in your apartment, and it destroyed like most of your stuff, right? And all of that savings, all of that investment? All of that money is just wiped out in one fell swoop. Right? Yeah, that's possible. surance protects against that, if you have the right insurance in place, you can protect against all of those things. And that's the thing about insurance is all it is, is you saying there are risks in life, and I want someone else to be the one to pay for them in case they happen.

Dyalekt:

Okay, but there's risks in life and stuff. Right? But like we talked about the number one way to protect your wealth. So let me go through a couple of ways. Like what about we always talk about having a savings question, what about you having your money to protect yourself? Does that hold you down? How does insurance hold you down better than that?

Pamela Capalad, CFP, AFC:

Well, that is a way to protect your wealth. But again, renter's insurance, for instance, can cover 1015 $20,000 worth of your stuff. So instead of you having to go into your savings and spend $20,000, replacing your stuff, you pay 10 $20 a month, and if something were to happen, the insurance company pays for all of it.

Dyalekt:

So you say and you can make a budget where you're putting away this money, you do have the savings cushion for stuff, but then just add in like $20 a month, which is just a couple 100 a year and you can take care of 20 grand.

Pamela Capalad, CFP, AFC:

Exactly. Yeah.

Dyalekt:

So when we're saying it's the number one way to protect your things, we're talking proportionately,

Pamela Capalad, CFP, AFC:

and we're also talking protecting your wealth in terms of your savings, your savings is a form of wealth, too, right? So your savings as you're building your wealth, and yes, it will protect you if something were to happen to you. But if you didn't have to tap into that savings if some disaster happened, and usually when I say disaster, I mean like big, big disasters, right? Like, if something happens, something breaks for $500, you're going to pay that you're not going to make a claim on your renter's insurance for a $500 thing, right? But if a huge thing happens if your house burns down, if there's intense water damage, if you get disabled and you can't work for a year, right? How long does your savings gonna last then?

Dyalekt:

Now that makes a lot of sense. Yeah. So how about the other one? How about estate planning? estate planning is the other big one that we often talk about. It's a big way to help protect yourself

Pamela Capalad, CFP, AFC:

and that protects your wealth in terms of Building generational wealth so that protect your wealth after death insurance protects your wealth during your lifetime. Ah, so

Dyalekt:

before we even get to estate planning, we got to get this part about it doesn't even work. Yes. If there's, you know, you have an estate plan together, but there's no insurance. Yeah, okay.

Pamela Capalad, CFP, AFC:

Exactly, exactly. Because that's the thing too, is like life insurance is the only type of insurance that protects your loved ones after you die. We have disability insurance, we have auto homeowners insurance, renter's insurance, we have umbrella insurance, lairs. Health insurance is a huge one, right? And so all of those things, protect your wealth during your lifetime. So while you're accumulating wealth, you're telling this insurance company, I want the risk to be offloaded to something else, I want you to take care of that risk. If something were to happen, I lean insurance company says that's great. pay a premium, the likelihood of this risk happening, this disaster happening is pretty low for us. So we're gonna make a profit by collecting your premiums. And if the disaster happens to someone will have the money to pay them. That's the business model, basically, right? They're like, Oh, the likelihood of house burning down doesn't happen. Well, I don't know how often it happens. I was like, wait,

Dyalekt:

wait for that to drop. I was right.

Pamela Capalad, CFP, AFC:

But the thing about them, they're taking a bet that more people are going to be paying premiums, then are going to actually be making claims. And there is a space in the insurance industry where they took the wrong bet. Have you heard of long term care insurance?

Dyalekt:

Yeah. So So how does this took the long back? Because like I thought insurance, even though it's unsure, I didn't think that this is another financial thing that basically breaks down to gambling.

Pamela Capalad, CFP, AFC:

Not well, a little bit. I'm just saying. Like, well, there's actuaries and insurance, who are actually like, looking at stats and looking at all of these numbers in terms of life expectancies, in terms of disability rates and things like that, to determine what your premium is going to be how much is going to cost for you to pay for this insurance, and also the likelihood that they're going to have to pay out right? And then so actuaries are helping insurance companies figure how to be as profitable as possible. Oh, yeah,

Dyalekt:

that's a good run profitable as possible. By the way, I want to talk a little bit later because I go into what you're going about, but I don't want to forget about how weird it is that we have to do business with someone who is betting against us on our life. That's something that like, I want to I want to pull that back and wrap about that. But like, let's keep going.

Pamela Capalad, CFP, AFC:

That is how insurance became so racist. Right? Right. Right. Right. Right.

Dyalekt:

So we will get back to So

Pamela Capalad, CFP, AFC:

anyway, so long term care insurance, I think it was invented in like the 80s or 90s, it was a product that essentially said, Hey, people are living longer, they're going to be older for longer, right. And they're going to need medical care in that old age. So we're going to sell this long term care policy. And the way that it works is you pay a premium, usually an annual premium. And then once the annual premium is paid, usually, I think you could like pay it for 10 years, and then it's done. There were these 10 years policies. And then you could also pay until you needed it. So there are like different ways to do it. And what the insurance companies thought was going to happen were that people were going to pay these long term care policies. And at some point, they're going to forget about them and let them lapse. Right, and that they most likely weren't gonna have because they price them that way. Right. So they most likely weren't going to have to pay out. The problem was that the long term care policies became something that people really need to tap into. And so they became popular at these lower rates. And the insurance companies were losing money, paying out the benefits of these long term care policies compared to what they had earned by collecting the premium. You're

Dyalekt:

saying people needed to tap into them. People were using

Pamela Capalad, CFP, AFC:

people were using them and people were using them at rates that the insurance companies do not anticipate. Well,

Dyalekt:

that's what I'm Yes, surprising there. And because Long Term Care seems like something that's going to need to have,

Pamela Capalad, CFP, AFC:

well, they don't they underestimated how many people would continue to pay their premiums, and they underestimate how long people are actually going to need to be on the long term care insurance. So

Dyalekt:

similar to what we were talking about last week, with GameStop people betting against people went wrong to them.

Pamela Capalad, CFP, AFC:

It did. Okay. So most companies either have really expensive Long Term Care policies, or they just got out of the game completely, because it was a loss. So that's how insurance companies make money. Right? Yeah. They're like, Oh, we need to collect more premium than, you know, what we're paying out, which is just like, you know, more or less for the student.

Dyalekt:

Right? Yeah. Like, Oh, these episodes is a stereotype like it's untrue. But there are a lot of companies that have this as policy where they're trying to make sure they pay they don't pay out even when they say they should pay it.

Pamela Capalad, CFP, AFC:

Exactly, exactly. And that's where you hear stories of people being denied claims or being really hard to, like, get on disability are really hard to obtain these insurance benefits.

Dyalekt:

Well, and even the training, I've heard from people who worked in insurance while they train you to talk to people to sort of weasel your way out of paying out.

Pamela Capalad, CFP, AFC:

Yeah, yeah, exactly. So let's talk about let's dig into the history of insurance. Okay, take a breath, right.

Dyalekt:

The history of insurance is systemic racism, systemic racism.

Pamela Capalad, CFP, AFC:

It started with slavery. Of course, if you're familiar with the New York Life Insurance,

Dyalekt:

the first was New Life Insurance first to do this.

Unknown:

They're the ones that are still around.

Dyalekt:

Okay, well, they're the ones that are around and they continue to live off. So New York Life Insurance, their whole thing was that they would take out a policy on the enslaved African, right? Yes. But it wasn't for the benefit of the families, family,

Pamela Capalad, CFP, AFC:

or even individual. Yeah, no, it was it wasn't for the benefit of the loved ones. It was for the benefit of

Dyalekt:

it was benefit of the owners. Right. The slave owners were the ones who took out the policy. Yeah. And then after they work these people to death, they then reap the reward of their life on the insurance policy. Yeah,

Pamela Capalad, CFP, AFC:

basically, these insurance policies because slaves are considered property. They're actually property and casualty policies.

Dyalekt:

So like, your tractor broke down. Yeah, yeah.

Pamela Capalad, CFP, AFC:

If your horse died, if your slave died,

Dyalekt:

right, and like, that's the whole thing of like my track, I get paid out for working my tractor to death when my tractor breaks down.

Pamela Capalad, CFP, AFC:

Yeah, exactly. Exactly. And New York Life built their business on these slave master policy,

Dyalekt:

double dipping and exploitation.

Pamela Capalad, CFP, AFC:

Yeah. Whoo, whoo. Oh, my God, I feel so gross. Talking about it. Okay.

Dyalekt:

Yeah. And by the way, all of that money that they got, I know, there was some sort of reconciliation that they did at some point where they were like, Hey, your life is really apologetic about it. Here's some United Negro College Fund money. I'm not sure if that was exactly the charity, maybe we can bring that back. It's okay. We don't have to tell you the reparations, tiny thing that they did to try to bring

Pamela Capalad, CFP, AFC:

us back. It didn't even come up as a blip. So then the next big thing was life insurance premiums. For a long time, black Americans were not allowed to purchase life insurance premiums. And I say not allowed as an insurance companies were not allowing black Americans to buy life insurance. The only insurance they had access to for the longest time was burial insurance. So okay, yeah. So let's talk about insurance. So it is today it's actually it's, it's we'll talk about the difference between term and permanent insurance and a little bit but burial insurance. It basically covers funeral expenses. It's exactly what it sounds like. It's

Dyalekt:

very familiar to a lot of black families. Absolutely. We're like, you can't afford life insurance. We want to make sure you can put a headstone there.

Pamela Capalad, CFP, AFC:

Yeah. And so burial insurance does not require a medical exam, the max policy amount is $50,000, and burial insurance, you pay for your lifetime until you die, essentially. So that was the only policy that black Americans were allowed to get for the longest time. And then the they realized, I think the life insurance market realized that they were missing out on an opportunity to sell life insurance to black people. During the segregation, a lot of black insurance companies popped up and they were actually doing really great things for their community. So there was here's this article, it was really great. It was an interview from marketplace. Yeah. marketplace.org. And how the decline of

Dyalekt:

black owned insurance firms and widen the racial wealth gap.

Pamela Capalad, CFP, AFC:

Yeah, cuz the thing is, we talked about how insurance companies make money, right, we talk about the profit, and we talk about and what these these black insurance companies were actually doing was, instead of keeping the profit for themselves, or passing the profit on to their insurance holders, they're actually reinvesting in the black community in other ways. They're providing mortgage loans for the community. And they're also investing in black businesses by providing capital for the African American.

Dyalekt:

So sort of being even like a pseudo bank at that point. Yeah, yeah. Full service. So that was ill, because like, it feels like insurance should be one of those things that encapsulated within the whole banking structure.

Pamela Capalad, CFP, AFC:

Yeah, the tricky part about that is so you technically, because of regulation, you weren't allowed. And then in deregulation in the 80s, all of a sudden, banks were allowed to sell everything, including insurance, and that actually muddy the waters and made it more complex.

Dyalekt:

So it ended up not being you could end up not being

Pamela Capalad, CFP, AFC:

a good thing. But the way that these black insurance companies were structuring themselves, they were able to give back directly to the communities and also still make a profit from these insurance policies they were selling. The problem was, when desegregation happened, you always talk about this, right? We got to do a whole episode on it, right? desegregation happened. And while black Americans now had access to white insurance companies, they actually saw it as a status symbol to be able to get life insurance from companies like Prudential or Metropolitan Life. Well, I

Dyalekt:

mean, that's one of the things I mean, like I couldn't do

Pamela Capalad, CFP, AFC:

before, and now I can, so I'm gonna

Dyalekt:

Yeah, it's definitely something that my mom will always say it's like, yeah, you know, like, companies act like we're not good enough for them, but we're gonna show them that's like the whole idea of Oprah buying out some?

Pamela Capalad, CFP, AFC:

Yeah, it's like, we're gonna show them by joining the system, essentially. Right. So what ended up happening was a lot of these black insurance companies, white Americans did not patronize black insurance companies. It's just like a lot of things that went wrong and desegregation, right. And so a lot of these black insurance companies just straight up went out of business, because black Americans like, Oh, I can go to Prudential, I can go to Metropolitan Life, I can get a life insurance policy that feels like a status symbol at the same time, right. And so that's what ended up happening desegregation. The additional problem was that Prudential and Metropolitan Life and all these white owned insurance companies would only honor two thirds of the policy value for black Americans compared to white Americans. And they charge 30 to 40% higher premiums to black Americans than white Americans. So they

Dyalekt:

charge higher premiums, they paid out less. Yeah, total money, not even like less often, but like they paid out less total money. And that's something that I'm sure they could have had as official policy, but also finagle their way through explaining why that wasn't a racially discriminatory policy.

Pamela Capalad, CFP, AFC:

Yeah. And it was only until the Civil Rights Act of 1984, that that practice was completely banned. And as we know, you know, insurance companies found other ways to do this, but they couldn't actually charge more or pay out less based on race as of the Civil Rights Act of 1984 1964 1988 1984.

Dyalekt:

That's, like very recent. Yeah, even still, that's still pretty recent Civil Rights Act is in our lifetime, you can a reasonably grand scheme of things. I looked up New York Life and I wanted to see a whole FAQ section about it in there. What was your life's connection to slavery in the 1800s? They do it very passively. Yeah, I'll share it. It's, it's Well, the thing about it is it's not really an admission of guilt. Of course not it's them talking about you know, we're over here, get to me thing.

Pamela Capalad, CFP, AFC:

Here normal questions, common

Dyalekt:

questions, there we go. That's why it's called common questions rather than Oh, you So come and quit. I love the thing about how does your connection to slavery rather than out as your participation but connected to slavery compared to others, and our research indicates to at least 60 other companies who did it to other companies did it so it's not that bad, but also wasn't a major part of your business, though it wasn't even that big a part of our business, it was only 5% of our business. It wasn't a lot of our business. And when do they stop doing it? By the way, they also say that it was a whole different company, because it was a different name. It was Nautilus like the excellent Bob. James is like

Pamela Capalad, CFP, AFC:

Sallie Mae is not navion anymore, whatever. Yeah. And then

Dyalekt:

I kind of called it when you talk about your historical flavor and how they accounted for it. They donated to the PBS series slavery in the making of America in the fall of Jim Crow. And they've established the New York Life endowment for emerging African American issues at CUNY is Colin Powell Center for Policy Studies. So they've seen a couple of dollars here, but not nearly as much as the amount of money that had helped to build the company.

Pamela Capalad, CFP, AFC:

So nothing they've done nothing. things they could write off on their tax return.

Dyalekt:

Yeah, they they could put into their press releases.

Pamela Capalad, CFP, AFC:

So it's more than nothing. It's a great way to go to the next song.

Dyalekt:

Yeah. So should we stop and go to some music? Let's go shopping.

Pamela Capalad, CFP, AFC:

Go to some music.

Dyalekt:

Well, first, can you actually explain the thing that is about the song? Oh, yes, I

Pamela Capalad, CFP, AFC:

forgot. Everything comes full circle, y'all because racism doesn't care about white people either.

Dyalekt:

Yeah, that's that's one thing about white supremacy, particularly doesn't care about white people. Oh, yeah. That's the actual that's the phrase that I like to say, well, because this is the thing of it. People often think of white supremacy as like, Oh, it's just like, I mean, black folks, and brown folks and stuff like that. But really, it's more of using black people in particular as guinea pigs to create income inequality for everybody else. So just like New York live was placing bets on people's human bodies. They've also done this in a more racially equitable way

Pamela Capalad, CFP, AFC:

they did Walmart, and it turns out plenty of other corporations were taking out what are called dead peasant insurance policies on their employees. So it was called company owned life insurance. And what that meant was that if you were an employee at Walmart, Walmart took out an insurance policy on your life. And if you died, Walmart would get the death benefit.

Dyalekt:

Not your family, again, not your loved ones, Walmart, the company that owns your work, and consequently your body.

Pamela Capalad, CFP, AFC:

Yeah, they literally did the same thing that slave owners were doing to slaves. And they did it to white folks, and they do. Every employee they did not discriminate, right? Plenty of companies did this. They got sued for it. This is not common practice anymore. Because not because it became illegal because it got too expensive.

Dyalekt:

Yeah, and again, this was something that happened in 2000.

Pamela Capalad, CFP, AFC:

Yeah, it happened in the 90s and 2000 deal doesn't just happen so let's listen to the song. So yeah,

Dyalekt:

so talking about this dead person's insurance. We got a song here called dead peasant from an artist emic who has been releasing a lot of music since the pandemic happened. You can see some of the other stuff that got from the album Pan emic this is dead peasant featuring Sana Sana and we'll check you out.

Unknown:

did pass as a matter of fact, for some power in God just picked up a rock and Bachus brother in the head. And there you have it, the first peasant dead and so on and so on and on and on. And this is more than the cast could manage. Cuz you wouldn't be what you collateral damage a couple of things that they forgot to mention. So listen, here's our peoples history lesson. It's not your neighbors who cracked them with who called us property and made us do tobacco flips it's not your neighbors who broke your back see now them slave owners sons work at Goldman Sachs so let me cake with some love in the bathroom and let them know that we the people actually matter you see the needs of the many outweigh the needs of the few. I thought I'd remind you though you already knew you're dead peasant. peasant dead. That's what the memo said. You're a slave worker. And you're worth more dead right? More dead right? Kiss my brown hands if you don't see my color. We diverse but believe we're still brothers. We say we train trains my hands a bird's wings. Fibonacci. we part ways when we cut trees down it's human beings to say buy paper for trees bottled water for rivers and put us in this racist police state. My stole row when they are like a goldfish trying to grow beyond this fishbowl was so freedom. But nonetheless, for all intensive purposes, stop your part in the circus get a turkey lid work your bed and sell your dreams from birth you live tightrope, the tightrope, juggling daggers and bills keeping in that still climbing ladders up hill you wouldn't be in your bedroom, which is not the case. The block is hot the coffee shop would take off your hood please stand still. The batch blood cross just the seal of the fans of the thrill want to see that blood spill another dead another story another operation mill plays on the field cheerleaders for the guild funding each establishment that's in the business to steal warship what you feel but don't want when they change the damn narrative. Piggy swale grinded for Mele needed some time to chill, searching for that light.

Dyalekt:

Welcome back. This is a budget we've got emic featuring sinusitis that was a joint dead peasant these cats up from Reno, Nevada, all around the country. I love that we get songs from all around the country and all around the world. Again, if you have some songs that are hip hop or hip hop, you got some groove to it that talk about these pertinent financial subjects for social subjects about life, please feel free to send them on to us you figure out how to do it. It's not too difficult. Oh, that

Pamela Capalad, CFP, AFC:

was really good. That Goldman Sachs line? Yeah, well, I

Dyalekt:

mean, I also love to have a straight line about the the needs of the people outweighs the breeds of the evil corporations and stuff like that, you know, just breaking down the simple, what the actual divide is, between folks and their interest in needs, and folks who base their borders on stuff that has nothing to do with humanity. And that's one of the reasons why people don't trust insurance, totally an example an avatar of the ways that companies armed people, and again, when we talk about black folks, and how black folks are used as the guinea pig for all of this stuff, all this harm and exploitation, again, insurance companies are the ones that really seem like they're the avatars of everything. They're the ones that made it up and set the system that everyone else Well,

Pamela Capalad, CFP, AFC:

it's true. It's true.

Dyalekt:

We got a rock with it anyway. Right?

Pamela Capalad, CFP, AFC:

Well, yeah, we just talked about at the beginning of the show how it is a huge way to protect your wealth. I think it's one of the number one ways to actually one of the number one ways there's lots of things, I guess, but I think it is the number one way to protect your wealth in your lifetime and allow you to continue to accumulate your wealth without having to worry about the potential disasters that could wipe out your wealth. They could wipe out your savings that could you know put you in bankruptcy that could ruin your credit score all of these things you know, before we get into more

Dyalekt:

of the facts stuff, can I just talk to you as a planner real quick when you talk to your clients and they come to you especially cuz you know, you're talking about you have a lot of clients color and you know, we're like even me, like I came to you not knowing anything and all I know that is insurances is a bad thing. And it's not only not worth my money, but it's something that's going to take advantage of me and take money out of my pocket. What do you tell me to get me to convince me to actually get insurance? Yeah, I

Pamela Capalad, CFP, AFC:

mean, I'm not in the job of convincing someone I guess is the first thing is it's one of those things where insurance is a tool to support you and your financial journey. And I think that there are plenty of people who choose not to use that tool, and it's okay if after learning everything you learn about insurance, and this is why I think it's super important to understand the history of it, understand how it's currently predatory. today. If you learn everything about this, and you stellar, like, fuck it, I don't want it, then I'm not gonna say you meet it, I'm gonna say here is how we have to plan differently for you because you decided that you don't want to, you know, be a part of the insurance industry? No, I don't want to have an insurance product

Dyalekt:

by saying that is. Are you saying that the insurance is kind of a shortcut to things that we need that there is a longer path? Or is it if we're not doing insurance, and we have to cobble something together? And it's a little bit scary?

Pamela Capalad, CFP, AFC:

Yeah, there's a you're you're putting a lot of things at risk by not having insurance, right. And I think that when we've talked about life insurance, and disability insurance, which is what we're going to be going over today, I think we're gonna have to have a part two, just because there's so much to talk about when it comes to insurance. When you talk about life insurance, and disability insurance, I think for life insurance, in particular, a lot of black Americans, a lot of pocc actually see life insurance as a way to be able to pass wealth on to the next generation where it's been sold that way, I don't think that that is the right way to look at it at all. But for a lot of people, it's this idea that not only are you losing a loved one, but you're probably also losing someone who is making income, right, and you're losing someone who is actually financially providing for your family. And losing that source of income is devastating. On top of losing a loved one and dealing with the emotional mental stuff around it. Like we often recommend that even if you don't have kids, but you get life insurance for your significant others for each other. Because if someone wants to stop working for a couple years, and just like get their mental and emotional stuff together, or just freak out,

Dyalekt:

like, yeah, just freak out, you know, to freak out.

Pamela Capalad, CFP, AFC:

Yeah, exactly like insurance is there for you to be able to freak out and not have to worry about the money side of it.

Dyalekt:

Yeah, cuz we got kids to deal with, it doesn't matter if someone really important to you goes because you probably have to go to work the next day, right? That's you have other people to take care of,

Pamela Capalad, CFP, AFC:

unless you have life insurance, right, then you don't have to go to work the next day, right, then the life insurance proceeds cover your ability to stop working to work less to change your lifestyle. If you were not the primary caretaker of your kids and your spouse was or your significant other was, and they're gone, you're able to be that primary caretaker.

Dyalekt:

And if you have to go to work the next day, you're not only going to work the next day and not dealing with your own stuff, you're not allowing your family to deal with their stuff. So there's more long term hurt being done. So what we're asking is for folks to deal with this system that's gonna harm us one way or another, when we're gone, to make sure that we can use money to create the space and bandwidth to take care of our sanity and our family.

Pamela Capalad, CFP, AFC:

Exactly. Okay, exactly. And you don't have to entrench yourself in the insurance industry as much as people make you think, right. I think a lot of I think a lot of pocc, who have been who have spoken to life insurance agents, are speaking to people are incentivized to sell you more expensive policies that you don't actually need. So I think those are we can talk about life insurance now and talk about the difference between term insurance and permanent insurance, right? Yeah,

Dyalekt:

no

Pamela Capalad, CFP, AFC:

term insurance, the way that it's positioned by life insurance agents is you're just throwing your money away, you're like renting insurance for a certain period of time, the way that it works is, you pay a premium to have life insurance for a certain number of years, 10 years, 20 years, 30 years is the most common, right 10 years. So you have like kids who are 10. Or if you have a short few have loved ones you're taking care of, and you need to take care of them for that shorter period of time. 10 year policy is usually enough 20 year term policies are usually a great time period if you have young kids, because that will take them from their youth to adulthood, essentially, so from when they're babies to when they're going to college, right. And then you have 30 year term policies, if you want to either ensure your loved ones for a longer period of time, or if you want to insure like a new mortgage or something, right, if you want to make it so that your family doesn't have to pay for the mortgage, if something were to happen to you a 30 year term policies another way to go make some and so these term policies are really inexpensive, right? So I have a $500,000 term policy, that's 20 years, and I pay $18 a month for it. I know, right? Ah, I don't even think about it. If you dollars a month, that's nothing, right? That's an easy line item to add to my budget, right? And life insurance premiums are based on your age and your health. So they always give you a rate based on your age. And then they also have you take a medical exam, which is really just like weighing you drawing your blood and getting medical records to understand your medical history. So for 18 a month, you got to be really young and healthy. Right? I was 29. And I was pretty healthy.

Dyalekt:

Yeah. It's for when you start not even like it doesn't.

Pamela Capalad, CFP, AFC:

level? Yeah, no, it's uh, it's called I got a level term premium, which means that for the whole 20 years, my insurance premium is that rate forever, until the 20 years, until you're

Dyalekt:

49. And then they're like, we got to renegotiate. Because you're not as young and healthy.

Pamela Capalad, CFP, AFC:

Yeah, exactly, exactly. But hopefully by then the kids are older, I'm less worried about them, meaning the life insurance if something were to happen to me, right. I didn't even have kids. When I took it out. We just started planning to have kids, which is I was like, let me get life insurance. And when we were married, we got married to each other. So that's the other thing. And so those are the kinds of things so term insurance is pretty inexpensive, right and pretty affordable. Um, the other insurance is permanent insurance. And there are of course, multiple types of permanent insurance. products, there are whole life insurance, Universal Life Insurance and variable Universal Life Insurance. Now, before we go into permanent insurance actually want to do a little bit of a detour and talk about company life insurance policies. Yes,

Dyalekt:

let's talk about because

Pamela Capalad, CFP, AFC:

those are also usually term policies, but they're group term policy. And we're not talking about the one with you, yes, exactly. A lot of companies as part of their benefits package actually offer life insurance that is paid by the company, but you choose who the beneficiary is. So it benefits your family, as long as you choose who the beneficiary is. And a lot of company on life insurance, usually, they'll insure one time salary, or $50,000, or whatever the the amount is that they insure that money, if something were to happen to you, then you just name a beneficiary, and that money goes directly to your beneficiary. And that's a term policy. So if you were to leave that company, then that life insurance is just gone, the benefit is gone. You don't get to take that with you, right. A lot of companies also offer voluntary term life insurance policies, where if you pay a little bit of a premium, you're also able to get part of you're also able to be part of a group life insurance rate, which usually means you don't have to take a medical exam. And it costs like 567 $8, I've seen it be really, really inexpensive for people to be part of this group voluntary life

Dyalekt:

insurance, because it's a group thing. And because it comes from your company,

Pamela Capalad, CFP, AFC:

Yes, exactly. So it lowers the rate. And you don't have to take a medical exam, because they're insuring like a group of people.

Dyalekt:

But again, you're not going to be able to take it with you.

Pamela Capalad, CFP, AFC:

So you can but the rate is going to be based on you as an individual, and they are going to base it from what we've seen, on average, they're going to assume that you're a 55 year old male smoker. Oh, it's gonna be more expensive.

Dyalekt:

Yeah, yeah. Yeah. Yeah. Leave out on your own.

Pamela Capalad, CFP, AFC:

Yeah, then it's probably cheaper for you to actually just buy an individual policy somewhere else. Gotcha. Yeah. So that's one of the arguments for having an individual policy in general, not always going to your company is unless you see yourself at your company for a really long time. Individual policies are pretty expensive for life insurance. And part of the reason why is because we don't die that often like the the goal is, and I have to use them. 20 years, right? Yeah, right. The goal is to still be around in 20 years, and you're insuring the fact that if you weren't your family's gonna take care of. So that's a really important thing. Now, let's talk about permanent insurance. Because this is where the lines get blurry in terms of like, Can life insurance build generational wealth?

Dyalekt:

Well, and that's the thing that I hear all the time is that these kind of permanent insurance are the ones that will build your wealth, because you can use them to generate money. It's sort of like when people start talking about how the stock market can start making you money out of nowhere, or, you know, you're just gonna get dividends and you're gonna be rich off your dividends and work.

Pamela Capalad, CFP, AFC:

Yeah, no, it's true. And that's, that's the thing with these kinds of policies. So let's start with whole life insurance. Whole Life Insurance is the mother lode for a lot of insurance agents, because the premiums are so high, just to give you an idea, if I took out a $500,000, whole life policy, it would print at age 29, healthy, all of that kind of stuff, it probably would have cost me almost $1,000. Okay, significantly more. Yeah, it's significant. And the reason why I do the math in my

Dyalekt:

head to see how that works. Oh, shit,

Pamela Capalad, CFP, AFC:

that's so much more, right? That's so much more. And the thing is, with permanent life insurance with whole life insurance in particular, the reason why is because whole life insurance builds what they call cash value. So cash value means you're putting this money in, but every year, you're getting a guaranteed interest rate from the company. And you also potentially get dividends if the company made a profit that year for your whole life insurance policy, right? So your face

Dyalekt:

just struck out, I'm like, 4000 a month like this is purely like pre pandemic, but I feel like I could just pay somebody to keep me out of trouble. Right, just like, look at me, pull me back. That's just so much money for that

Pamela Capalad, CFP, AFC:

it is a lot of money. And the benefit that they tout is that over time, the cash value builds up in retirement, it's tax free growth, right? So if the money is growing in the insurance policy, you don't have to pay taxes on it. If you borrow from the cash, y'all, you're borrowing the money from the owner. So there's no income?

Dyalekt:

Because you're already in the weeds.

Pamela Capalad, CFP, AFC:

So super in the weeds, yes.

Dyalekt:

But this needs to be discussed, because this is something that I hear from people all the time. And there's always like a half assed explanation of the people don't really know where it's coming from. So this is the thing about how having a whole life insurance policy will make you money, right? So let's back all the way up to like all how one How is it gonna at all make money? And then why is this theory a thing? And then why is it not actually a good thing?

Pamela Capalad, CFP, AFC:

Right, right. And I'm not saying it's not a good thing. There are uses for whole life insurance that I've seen working in wealth management, we saw a lot of whole life insurance and wealth management. And part of it was to avoid paying in state taxes, but that's a whole other conversation. Let's just talk about the beta.

Dyalekt:

Because that's how it works for rich folks.

Pamela Capalad, CFP, AFC:

That's how it works for rich people because the thing is whole life insurance. One of the things benefits they say is all of the growth is tax free. Right? So let's say you take out a life insurance policy, I'll walk you through every year, up until year three. So year one and year two, we pay $12,000 a year, right? Let's use the example that I gave, and you're wanting paid $12,000 a year, all that money goes to Commission's and the cost of life insurance. year two, same thing. All that money goes to Commission's and the cost of life insurance on average insurance agents earned 50% of the premium in the first two years after that there's a trail that they call it of diminishing amounts that they earn from the life insurance policy. So they really only care about that immediate sale, that first sale right in the third year, the third year is when you start to see that cash value really build up. So that $12,000 that you put in that third year, you actually see potentially a balance of close to $12,000, maybe the balances 910 $1,000 in that account, because you put that money in there, some of that money goes to insurance costs, but a lot of it goes to building the cash value right? On top of that the cash value gets a guaranteed interest rate from the insurance company. So every year they're paying you interest, usually three 4% is the guaranteed, right? And that interest is non taxable because it's in this insurance policy. That makes sense. It's in this vehicle, right? And you're not technically touching the money. The other thing is some insurance companies, big insurance companies aren't public like massmutual, or Northwestern or things like that. They also pay a dividend back to their policyholders if the company makes a profit that year. Yes. And so sometimes you may be instead of 4%, you're earning 7%, or 6%, or whatever the dividend is that

Dyalekt:

year, cuz that's one of those things is like your company doesn't have to go public if they don't want to, and that money has got to go somewhere

Pamela Capalad, CFP, AFC:

apart, right? Northwestern Mutual mass mutual, the mutual part is that it's private, and it's owned by shareholders, right? So that aspect of whole life is really appealing to people, because then the money grows tax free. And technically, you're able to borrow against the cash value anytime, right? And so you're able to if you want to pay for like kids college, and you would pay a whole life policy for 20 years, right. Or if you wanted to borrow for your retirement, then all of that money you borrow, it's technically tax free. The other side of it, though, is you have to pay an interest rate to the insurance company for the amount you borrow for as long as you're borrowing it. So if you don't pay that cash value back, then the amount of your death benefit goes down at the time that you die,

Dyalekt:

that gets a little complicated. Do you know that there's interest rates from both sides going on?

Pamela Capalad, CFP, AFC:

Well, you're getting paid an interest rate if you leave the cash value in there growing. But if you borrow money, and you take out a loan, because it's a loan, right, you're borrowing the money, so you don't have to pay taxes, but you certainly have to pay the interest rate because it's alone, otherwise, it doesn't count as a loan. So the insurance company is collecting an interest rate, if you borrow that money against your cash value, the way they presented those, you don't even feel it, right, because you never have to technically pay that money back. You can just leave it out of your policy forever. And your death benefit will just be lower when you die. Right.

Dyalekt:

Yeah. Cuz I mean, I guess, you know, with with this one, that that's the way you get out of the deal.

Pamela Capalad, CFP, AFC:

Yeah. Exactly. Exactly. It's permanent. It's permanent life insurance. So the thing with whole life that is very risky, I would say is I don't like mixing insurance and investments in general. And here's why. So I started in the financial services industry in 2008. I was working in wealth management 2008 was when all that shit went down. Right, right. So 2009 2010, we were really helping clients through very difficult times. A lot of our clients were losing their jobs. I think maybe like 10 to 15% of our clients, I think were Lehman Brothers clients now and also Lehman Brothers workers. Yep.

Dyalekt:

And when you're talking about this wealth management firms, I don't know if everybody really knows what wealth management firms do. You weren't just doing planning the same way you do it for your budget, right?

Pamela Capalad, CFP, AFC:

No, we were doing complex estate planning or doing complex insurance planning that complemented people's estate plan. You're doing retirement planning out over 30 years, all of the stuff that I learned my CFP courses but really only applied to wealthy people. Because the thing is, we hear about state taxes all the time, like, Oh, we have to like, why should someone pay state taxes, but a state taxes aren't relevant to you unless you are a state is worth $11 million or more. Right. And so this is where that insurance planning really came in is if we projected that someone's estate was going to be above the estate tax exclusion, which is currently $11 million, then we have to help them figure out a way to avoid

Dyalekt:

paying state tax. So once you start making like you've got a 15 $30 million estate, even more important than the actual function of the insurance is figuring out how to flip the tax

Pamela Capalad, CFP, AFC:

game. Exactly. And usually what we would do is we would sell people life insurance, to cover paying estate taxes. You know, so you'd have them buy a $2 million policy because we estimate they might owe $2 million in a state tax. So instead of it coming out of their state, their life insurance policy would pay for it.

Dyalekt:

I want to ask this of y'all who are listening and watching as we're doing the video stuff to you check us out on on Google, it's another good places but if you want to know a little bit more about this part in particular, because yeah, I'm like I said, I don't understand oftentimes. Looks like you know, the whole thing of why rich people are so concerned about taxes when it's like you're supposed to be making all this money doing the thing to do. But the reality is that once you hit a very high income threshold, you are making

Pamela Capalad, CFP, AFC:

lower threshold, your

Dyalekt:

net worth and wealth threshold, you are making your income, not from your effort, not from the things that you create and the things that you sell. But from the interest on things. Yeah, that's where the real money is, that's when your money is 10 making its own money. That's when you hit it like a huge amount in a

Pamela Capalad, CFP, AFC:

way that's sustainable, right in a way that can sustain a lifestyle. Yeah, that's the thing.

Dyalekt:

I mean, it's not you don't count like a couple bucks. It's not money making its own money, making its own money,

Pamela Capalad, CFP, AFC:

literally, literally, right. And so the thing about whole life insurance that's dangerous is you know, it when we did projections for people in 2007, and 2008, we're projecting they're going to be having these biggest states, and also projecting they were sonepar jobs. And so I remember, we had a couple who got sold a whole life insurance policy, that premium was $16,000. But it was fine, because he was making like, you know, $700,000 and was getting like 300 $400,000 bonus. So he was netting a million dollars this job, except that he lost it in 2009. Right. So he was three years in to his whole life policy where the premium was $16,000 48 grand. Yeah, he was in his third year. And the first two years, like I said, went directly to insurance, there was no cash value in it. And we were having to talk him through whether he should contribute to his 401k because he got another job, but it was lower paying significantly lower paying, or if he had to just make the insurance premium. And so if he let the policy lapse, that money would just be gone.

Dyalekt:

So when you get these types of all life insurance policies, you're not only betting on your life, but you're also betting on your job sticking with you,

Pamela Capalad, CFP, AFC:

you're betting on your ability to keep affording the payment.

Dyalekt:

That's a lot of asking, okay,

Pamela Capalad, CFP, AFC:

whatever that means, whether it's your job, whether you have, you know, other funds elsewhere, that you didn't know what to do with it. That's also often when rich people buy whole life insurances, they've exhausted all of their other wealth building options, right? They like maxing out their 401k, their investment portfolio is huge. And they're like, I need a tax free way to grow my money and also protect my wealth,

Dyalekt:

that whole life. That's another big rich people thing that I think that we don't think about a lot, we often think about it in sections, right? You can do this thing or this thing or that the other thing, but when it's really big money, you exhaust all the small stuff, and then go for these big for the fences, ones. So when we're thinking about our own money, before we think about these big wild things, we need to take care of all that other little stuff you just talked about that is available to us.

Pamela Capalad, CFP, AFC:

Yeah, and the thing is, the thing that I recommend for people is get a term policy, don't mix insurance with investments. And instead, invest the difference. Like if you have an extra $1,000 a month lying around, put $18 of it towards a term life policy, invest the other 900 and what $982 into the stock market every month, and your portfolio will grow. And also, if you lose your job, at some point, your investment portfolio is not going to disappear because you didn't contribute to it that month. Right? It's still gonna be there tomorrow, separate

Dyalekt:

and work with the different beasts that we talked a little bit about the fun parts of it last time. Yes,

Pamela Capalad, CFP, AFC:

exactly. Can we take a break and go to a song let's take a break, take a break. We're only getting two life insurance today.

Dyalekt:

Well is there isn't a more life. There's no universal life and talk about universal life. So I will I'm gonna play a song that talks about disability. So we'll see if it gets anything. Oh, let's

Pamela Capalad, CFP, AFC:

switch to disability and then come back and come back next time.

Dyalekt:

Okay, this is definitely gonna be oops,

Pamela Capalad, CFP, AFC:

we got to talk about disability insurance, y'all.

Dyalekt:

This is gonna be a two parter. Definitely. So we'll come back. Three parter, so, apologies to the songs that we didn't play, but we're gonna play this one. We're gonna go this is a real for real jam. I'm very excited about this one. We're gonna go over to this is Chicago once again to Chicago for the dope stuff. cago This is a cat named Shawn crutch with a song called rip disability. It's a rebirth of the track and it's really dope. Check it out. Justin,

Unknown:

Sarah Adam Lopez. They used to say that now they won't know my legacies may never heard Two days a week you you're playing if you choose let us bring this pepto mimetic anesthetic my friend from New Zealand distress the adolescent reception. TJ gave me the game. nano baby Tracy is CP nation, this triple motivation. Tomorrow's never perfect. Walking your path they used to say triple triple never back. I'm just giving you the facts. administrators need to know what I got playing my sister took my TVs to Walmart, some ecstasy bags, I got this morphine amazing feeling. So don't judge it. Dude, you got a dream to keep pursuing failures never lose. ability is the moment we say used to say that I won't say what I want to say. They won't. They won't get

Dyalekt:

that shot Shawn crutch, who I just want to read from the the bio. Sean crouch has cerebral palsy and is the founder of no ability we says no ability. It's K and o w no ability is an organization geared toward inspiring mentally and physically challenged individuals is undeniable motivation. Whereas music is to inspire underprivileged and handicapped children throughout the nation to achieve their dreams and their no ability. I just I just appreciate that. I love all artists that just talk about their experience and give it to you in fine detail.

Pamela Capalad, CFP, AFC:

It's so good. Well, let's talk about disability insurance

Dyalekt:

to talk about this, right?

Pamela Capalad, CFP, AFC:

Let's talk about it because it's a really important thing disability insurance, you're probably more likely going to be using disability insurance, then you will end up using life insurance, your loved ones and abusing it, you're more likely to be disabled and live than die.

Dyalekt:

And one thing I want to talk about, you know, with this artists here is that people often talk about disability as a shameful thing. Either if you have a disability, or the term going on disability folks like oh yeah, this was a going on disability. And people have talked about it like it's a scam. Well, that's the thing is

Pamela Capalad, CFP, AFC:

disability insurance, the biggest disability insurers Social Security, right. Social Security is not just a program for older Americans who are over 62. And social security also has a disability insurance component. So starting in 1956, you're able to collect disability insurance through the social security program if you're between the ages of 50 and 65. Or if you are a disabled child of someone who retired or died. If the you were disabled before age 18, then you're able to start collecting it after age 18. So it's a pretty robust disability program in terms of the benefits that it provides. It doesn't provide very much it provides about $1,000 a month. But for a lot of people that's better than working a minimum wage job

Dyalekt:

when they are better than a lot of those places where you've got like a minimum wage job, and they're only giving you a tiny amount of hours because it's really a token position.

Pamela Capalad, CFP, AFC:

Yeah, exactly. Exactly. So the thing about disability insurance is I personally think that there's a stigma against it because it's another social welfare program. You know, and it's a social welfare program that disproportionately could benefit people of color. But let's talk about why it's racist, right? Yeah.

Dyalekt:

What is what you really mean is it could proportionately benefits people Without it,

Pamela Capalad, CFP, AFC:

it could. It could but does it? No. No, it probably does it. Just to just to see how blatant This is. One is, it's much more difficult for black Americans to receive Disability Insurance than white Americans Surprise, surprise, they actually found this in 1992, they did a study, black people with serious ailments have been much more likely than whites in the last 30 years to be rejected for benefits under the Social Security Disability programs. This was the Los Angeles Times article don't

Dyalekt:

make sense to me too well, although the thinking it took was I was gonna say remember, like, in the past couple of years, they found that there are medical textbooks that still say that black people are more likely to lie about the pain there and that they have stronger thresholds for pain. And really, we just want drugs.

Pamela Capalad, CFP, AFC:

Yeah, exactly. Well, and let's talk about the history of social security disability in general, right, the definition of disability actually got loosened under the Reagan administration, because ronald reagan cut all of the mental health programs. And so in retaliation, in a sense, Congress said, Alright, if you're not providing mental health programs, you're closing these public mental health facilities, then we're going to fill the gap by loosening the Social Security Disability definition. And once again, to talk about the way that art influences things. Look at how many 80s horror movies are about mental health facilities, and what horrible places they are,

Dyalekt:

in reality, is based in reality, because initially, mental health facilities were very harmful exploitative, because they weren't regulated at all. And then that began an era of regulation. I believe the American Horror Story did a really good example of one of those pre regulation types of you saw the really good season that was about Well, that was like

Pamela Capalad, CFP, AFC:

a nurse ratchet type. Exactly.

Dyalekt:

Yeah, exactly what they're attached to. That's all part of that. And that that's the kind of stuff that led to the regulation. But then they continue to show those images, as Reagan was talking about how these were just a bad thing.

Pamela Capalad, CFP, AFC:

Right. Exactly, exactly. And so then we have the stigma against mental health, which probably really grew in the 70s. And again, in 1988, Social Security Disability accounted for one out of eight Social Security dollars in 2010. And now accounts for one out of five Social Security dollars. So under percent, yeah, it's significantly more, but the thing that they realized when they started it was it's not that people were getting disabled more often, or anything like that, they found that qualifying for disability got easier, just like what I described, and also finding work harder. So the definition for social security disability was loosened. And also, as we see wage stagnation, especially for low income workers, especially for workers, if specially for work that demanded physical labor was harder to find and paid less, right. And so then you have this confluence of things where it's like, well, this is a social safety net that we have access to, that we can potentially, you know, use to especially because the definitions loosened on things like back pain on mental health, on things that were you could describe the pain, but you couldn't prove it necessarily. And so there's a way to show that you were actually disabled in this way without necessarily having to prove that you had a debilitating illness. This is how a lot of disability dollars really got distributed through social security. Now, on the flip side of it, what's happening is it's getting more and more difficult. Now, to qualify for disability insurance. Most people don't get qualified in the first round, they often get denied in the first round of applying, they also often get denied in the second round of applying. And by the time you get to the third round, you actually have to go in front of an administrative judge and make an appeal as to why you should be getting disability all the while you're being told that you should be ashamed of your disability. And everyone's question you is another hit another way of knocking you down and making you think, well, maybe I should just figure it out on my own because

Dyalekt:

that's what everybody's saying that I should stop being selfish and greedy. Well, cuz

Pamela Capalad, CFP, AFC:

here's the thing about judges is they are humans and many of them are racist. So in the Milwaukee Wisconsin Journal Sentinel, they actually found that there was a judge whose notes that they were taking said things like young, white female, long brown hair attractive, looks innocent, very black African looking woman, actually gorilla like in appearance, he described people as buxom, he described people as gorillas, he described people in terms of whether or not he was going to actually deny or accept their disability insurance claim based on their race. And he learned about it. And these were notes that were electronically scanned in fucking records.

Dyalekt:

So this is the type of Kasmin people always like, Oh, yeah, well, that guy is awful, and all that, but they're forgetting the enormous wealth of judges, many of the people of color themselves who've been so indoctrinated by these norms by these ideas, that when they see a white lady with long brown hair, they're like, oh, there's a person with the future from it doesn't even have to be some they're creeping on them or think they're beautiful. They just look trustworthy to them and when they see trustworthy, right, and when they see a person to cover, especially when they see black people, all of the other things come into their head. They don't even really notice it. They're just like in their head, they decided this individual

Pamela Capalad, CFP, AFC:

seems untrustworthy, right? I don't believe them. And this all goes back to a dialect was saying we talked about on the show a lot about health care, and like how black people in general are believed less when they say they're in pain, right. And so that all comes around this economic structure of this. And so disability insurance, Social Security is one way to get it. Another way to get it is there's private disability insurance, of course, right, and private disability insurance, there are varying definitions, depending on the type of policy you can get. But the best place to get disability insurance in the private sector is through your job. If you have a company that offers disability insurance, as a benefit, take it, often jobs will pay for it for free. But if they don't, and there's a voluntary disability plan, that you've seen your benefits, look through it during open enrollment, whatever it is, or maybe you just asked HR about it, pay the extra dollars and take the disability insurance because often, disability insurance privatized will cover 60 or 70% of your income for 235 years, sometimes through retirement if you're disabled through retirement. And so these private policies, while expensive, if you were to pay for them individually, are actually very affordable, if you pay for them through a company. Again, this further goes into the problems of insuring people through employment and things like that, right, we had that big issue with health care this year. And Disability Insurance is another issue because then if you're not employed, you have to deal with social security disability. But if you have the benefit now, if it's something that maybe was buried in open enrollment conversation, or in your benefits booklet, or whatever it is, look for it and take it because it is a huge, huge benefit in case something were to happen to you.

Dyalekt:

Basically, it breaks down to this insurance is a lot like voting. These systems that were built were not built for us. But the real problem with these systems, and the way they're not built for us is they do their best to deny us access to them. So the only way we're going to be able to make the change we want and take care of our people is if we force our way through to get

Pamela Capalad, CFP, AFC:

access. Yes, speaking of forcing your way through, if you are a freelancer shout out to freelancers union, they set up a group Disability Policy for freelancers, you just have to sign up and be a member, it's free to be a member of freelancers union, and you can access their group disability policy, it's a basic policy. So it starts paying out as early as 30 days of disability, and it will pay you out for up to two years up to 60% of your income based on the tiers they have set up. So it's really truly inexpensive and inexpensive way to get disability insurance, if you're a freelancer. Also, if you're part of any professional associations, a lot of them may also have group disability policies, the Financial Planning Association, I'm part of that association and they have a nice group disability insurance policy that they pay for. So we do have to as dialect said, just figure out ways to still use the system so that we feel financially protected, and we're able to feel empowered to create change. From there,

Dyalekt:

we got to put our gas mask before we get ourselves out of this plane wreck we do so that's what's going on with that we're out of time for today. So we're gonna come back and talk some more about the races history and not just history but the races continued existence of insurance. Next week, we're gonna come and talk about why desegregation didn't work and get a little bit into that thing. And we want to encourage y'all please feel free to reach out hate us, rate us debate us and all the places that you can find us ask any questions, whether it's in our DMS, whether you go to brunch or budget.com and sign up for a chat or even just send an email through that come and holler at us. We'll address the questions live on air and thanks for check you out next time.

Unknown:

Thank you.