Cancer Insurance - Waste of Money ?

This is rather like saying when I go to Duckwalls and buy a package of Fruit of the Looms, I am helping others to buy briefs.

Money paid to the insurance company goes to executive bonuses and other operating and infrastructure costs; profits; and "inventory" to be used in the conduct of the business. In this case, "inventory" just happens to be money rather than underwear.

(And I didn't think we were talking about non-profit mutual benefit organizations.)
 
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This is rather like saying when I go to Duckwalls and buy a package of Fruit of the Looms, I am helping others to buy briefs.

Money paid to the insurance company goes to executive bonuses and other operating and infrastructure costs; profits; and "inventory" to be used in the conduct of the business. In this case, "inventory" just happens to be money rather than underwear.

(And I didn't think we were talking about non-profit mutual benefit organizations.)
The difference is when you buy your undies none of the price goes into reserves for claims paying, so everything above costs is profit to the manufacturing company. To be sure, the insurance company makes profit, and yes, the executives get their bonuses (and I get my commission! ;) ). But after operating cost and before profit is the piece of the premium that goes to reserves, so why would it be wrong for someone to consider that their premiums are, at least indirectly, helping someone else at the time of need, whether non-profit or for profit?
 
Most businesses need reserves in some form or another. It may be large amounts of unsegregated cash. It may be segregated cash or cash equivalent reserve funds. It may be a credit line at the bank. But it is needed.

Employees expect to be paid. Governments expect payroll, income, property and sales taxes to be paid. Banks expect to be paid. Suppliers expect to be paid.

Customers have the nasty habits of going bankrupt, canceling contracts and/or using suppliers as banks. These activities affect a business' flow of incoming cash.
 
But, what about the folks that carry a plan and never have a claim? Have they just wasted their money?

How about people who have homeowners insurance and never have a claim?

How about people who have auto insurance and never have a claim?

You can ask that about any kind of insurance.

No, people aren't wasting their money. They may think they are. I can't tell you how often I was told "I'm insurance poor" while I was a life agent eons ago.

My sister is battling breast cancer as well as financial difficulties. She probably wishes she had it, although she does have a private disability policy paying her benefits.

Would I buy it? No. I'm 71 and retired, on social security, and the VA takes care of all my medical needs subject to small co-payment for which I have plenty of money in the bank.

A lot depends on a person's financial circumstances and medical potentialities.

And, for many, they are buying peace of mind when they buy the insurance.
 
The difference is when you buy your undies none of the price goes into reserves for claims paying, so everything above costs is profit to the manufacturing company. To be sure, the insurance company makes profit, and yes, the executives get their bonuses (and I get my commission! ;) ). But after operating cost and before profit is the piece of the premium that goes to reserves, so why would it be wrong for someone to consider that their premiums are, at least indirectly, helping someone else at the time of need, whether non-profit or for profit?
LD is showing he lacks some basic knowledge of insurance... The whole process began as people sharing risks (such as health care expenses).. Once it grew beyond just a few people in the pool there were administrative expenses to be paid. Totally different concept from retail apparel business.. Funny that he mention non profits... Many non profits have much larger administrative expenses (salaries, bonuses, etc.) than for profit insurance companies of similar size.
 
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LD is showing he lacks some basic knowledge of insurance... The whole process began as people sharing risks (such as health care expenses).. Once it grew beyond just a few people in the pool there were administrative expenses to be paid. Totally different concept from retail apparel business.. Funny that he mention non profits... Many non profits have much larger administrative expenses (salaries, bonuses, etc.) than for profit insurance companies of similar size.

That was a nice attempt at deflection.

We are not talking about the dark ages of insurance and how an early mutual company works. We were talking about appropriateness/inappropriateness of a sales technique in relation to a modern stock company.

Washington National/CNO is traded on the NYSE
National Security is traded on NASDAQ
According to wikipedia: Manhattan Life Insurance Company - Wikipedia
Manhattan Life (CUL) is a privately held stock company

Unless you can produce a contract form that says otherwise, I would expect that there is a contractual relationship (policy) between the company and a policy holder to provide a product (money) if certain events occur. The policy holder pays a fee. I highly doubt that any of those contracts are going guarantee the fee payer that all of their fee money will be paid out to other policy holders. I would further think that implying that to prospective customers would be some type of behavior breech that could generate an E&O lawsuit.

Paying fees/premiums merely "helps" the insurance company to stay in business and continues to obligate it to honor its contract with the policy holder. The premiums do not bind or constrain the company in the conduct of its business with others.

You, and the others, are allowing emotions to potentially guide you into something I believe is an unwise business practice. You are going to tell prospects they need to use their personal resources for charity for others rather than focusing on determining the prospects' insurance needs and whether or not their resources can provide/fulfill them.
 
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That was a nice attempt at deflection.

We are not talking about the dark ages of insurance and how an early mutual company works. We were talking about appropriateness/inappropriateness of a sales technique in relation to a modern stock company.

Washington National/CNO is traded on the NYSE
National Security is traded on NASDAQ
According to wikipedia: Manhattan Life Insurance Company - Wikipedia
Manhattan Life (CUL) is a privately held stock company

Unless you can produce a contract form that says otherwise, I would expect that there is a contractual relationship (policy) between the company and a policy holder to provide a product (money) if certain events occur. The policy holder pays a fee. I highly doubt that any of those contracts are going guarantee the fee payer that all of their fee money will be paid out to other policy holders. I would further think that implying that to prospective customers would be some type of behavior breech that could generate an E&O lawsuit.

Paying fees/premiums merely "helps" the insurance company to stay in business and continues to obligate it to honor its contract with the policy holder. The premiums do not bind or constrain the company in the conduct of its business with others.

You, and the others, are allowing emotions to potentially guide you into something I believe is an unwise business practice. You are going to tell prospects they need to use their personal resources for charity for others rather than focusing on determining the prospects' insurance needs and whether or not their resources can provide/fulfill them.

The premiums paid do in fact bind the contract.

The very basic definition of insurance is sharing the risk. So if an agent talks about this it is not misleading and therefore nothing illegal is being done.
 
That was a nice attempt at deflection.

We are not talking about the dark ages of insurance and how an early mutual company works. We were talking about appropriateness/inappropriateness of a sales technique in relation to a modern stock company.

Washington National/CNO is traded on the NYSE
National Security is traded on NASDAQ
According to wikipedia: Manhattan Life Insurance Company - Wikipedia
Manhattan Life (CUL) is a privately held stock company

Unless you can produce a contract form that says otherwise, I would expect that there is a contractual relationship (policy) between the company and a policy holder to provide a product (money) if certain events occur. The policy holder pays a fee. I highly doubt that any of those contracts are going guarantee the fee payer that all of their fee money will be paid out to other policy holders. I would further think that implying that to prospective customers would be some type of behavior breech that could generate an E&O lawsuit.

Paying fees/premiums merely "helps" the insurance company to stay in business and continues to obligate it to honor its contract with the policy holder. The premiums do not bind or constrain the company in the conduct of its business with others.

You, and the others, are allowing emotions to potentially guide you into something I believe is an unwise business practice. You are going to tell prospects they need to use their personal resources for charity for others rather than focusing on determining the prospects' insurance needs and whether or not their resources can provide/fulfill them.
And, just how many years have you been licensed. I have held mine since July 5th, 1971. Emotions have nothing to do with it. And, I have never told a person they "need" to put their resources into insurance for charitable purposes. I tell them that they "need" the coverage
In the event they suffer the loss.
 
As I sit here in the regional cancer center waiting to see my radiation oncologist for a follow up, talking with others that are either survivors or undergoing treatment, my thoughts turned to cancer insurance. There are many that say it is a waste of money. I can guarantee you that those that are fortunate enough to have the coverage to help them financially as they undergo treatment are among that group.

But, what about the folks that carry a plan and never have a claim? Have they just wasted their money? Well, first of all, I would be very thankful if I were in that group but something occurred to me
this morning that I had never thought of before.

"Where do you think the money to pay claims to those that need it comes from?" ...From the money contributed in the form of premiums by people who never have a claim. So the money we pay is not wasted but goes to help others in need which actually was the whole idea behind the early insurance societies.

Down deep I always knew that but I have used that knowledge in my presentation. Have always just appealed to the clients sense of "greed" that if the needed the money it would be there. But, by telling them, "I hope you never need it and if you don't you will have helped others that were in desperate need.", you also appeal to their sense of charity.

We don't have early insurance societies now. We have corporations. This is telling folks they need the product because it does something for others. It is a self serving appeal to emotion by an agent in order to force someone towards a purchasing process they might not otherwise engage in. It gives no indication of any engagement with the prospect to determine what THEIR needs or wishes are.
 
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