Decreasing Term?

[somarco]

Doesn't everyone need more coverage while they are young and less as they get older? Once you pay off the house and raise the kids and build up your net worth...what do you need it for.

If that's not true, there are going to be a whole lot of disappointed people when their term-life coverage is over regardless of whether it is decreaseing or level.

Generally, yes.

As long as life works out exactly as you planned.

But fewer people are paying off their mortgage and are carrying that debt, along with a bunch more, into their "retirement" years.

And fewer are retiring.

Do you think the greeters at Wal-Mart are there because they like to stand on their feet all day?

And what about inflation? Does anything cost less today than it did 30 years ago?

Even if you no longer have kids to take care of chances are you have a bigger mortgage now than you did 10 or 20 years ago. People move, refinance, take on more home debt.

Talk to someone who is 30 and they will tell you they only need life insurance for 20 - 30 years. Until the kids are grown and the house is paid for.

Talk to someone who is 60 and ask them if they wish they had bought more insurance, and had paid a little more for permanent insurance, rather than buying term.

Of course let's not forget the BTID gang. How many of them actually DID invest the difference rather than spending it?

Boomers (and younger) are ill prepared financially for old age.

The only ones who really have no (or less) need for insurance as they age are those who are broke and/or have no family who really cares about them & vice versa.

 

[somarco]

Estate taxes are not the issue for most, income taxes are.

For most estates of any consequence the income taxes due in respect of a decedent are greater than estate taxes.

 

[Wprice]

My two cents is that DT is for mortgage brokers that try to sell a little piece of insurance. There are no benefits to DT, period. It's a matter of dollars to go to a level term product per month anyway. Education is key when you talk about this coverage. Premiums stay the same, coverage goes down, or premiums stay the same and coverage stays the same. If they want to waste their money like that they might as well put the money in an interest bearing annuity. At least you'll get more bang for your buck. To me, DT isn't even an option, clients that ask about it, I simply say "I believe in the best products for my customers, that being in mind, I don't offer it."

 

[James]

You have WL/UL and you have Term, Term meaning for XX amount of years, correct? So why would one buy term to begin with? Term is specifically a product that operates great for a temporary need not for the life of the insured. So if that is the case then if one is assuring a temporary need exactly what is that, well IMHO that has to be an asset not the life of the insured, if that asset is decreasing (the value or risk) then obviously decreasing term is a perfect fit. Now contracts are contracts, no two are the same much like agents. You have some that seem to have a strange twist of logic.

You can always go with ART or shorter term periods such as the 5-10 year that is GR, of course both, the price will increase when renewed.

 

[Newby]

Generally, yes.

As long as life works out exactly as you planned.

But fewer people are paying off their mortgage and are carrying that debt, along with a bunch more, into their "retirement" years.

And fewer are retiring.

Do you think the greeters at Wal-Mart are there because they like to stand on their feet all day?

And what about inflation? Does anything cost less today than it did 30 years ago?

Even if you no longer have kids to take care of chances are you have a bigger mortgage now than you did 10 or 20 years ago. People move, refinance, take on more home debt.

Talk to someone who is 30 and they will tell you they only need life insurance for 20 - 30 years. Until the kids are grown and the house is paid for.

Talk to someone who is 60 and ask them if they wish they had bought more insurance, and had paid a little more for permanent insurance, rather than buying term.

Of course let's not forget the BTID gang. How many of them actually DID invest the difference rather than spending it?

Boomers (and younger) are ill prepared financially for old age.

The only ones who really have no (or less) need for insurance as they age are those who are broke and/or have no family who really cares about them & vice versa.

I agree that many people don't manage their money well. They also don't buy term and invest the difference (they often just buy more term insurance than they need thinking of it as a big lottery ticket.)

But I think financially responsible people who understand insurance may often have a need for decreasing term. I have only sold level term so far but I am new to term insurance.

 

[somarco]

Newby -

At what point do you think the owners of DT will drop their policy? Is it when that $100,000 policy is only worth $50,000 and they are paying the same as they did for $100,000? Or maybe at $20,000?

And what if they decide at a later point they need the original amount (or more) but have become uninsurable? What then?

DT is a useless product. I don't know any carrier that offer it and even if I did I would never make it available to my clients.

 

[James]

Newby -

At what point do you think the owners of DT will drop their policy? Is it when that $100,000 policy is only worth $50,000 and they are paying the same as they did for $100,000? Or maybe at $20,000?

And what if they decide at a later point they need the original amount (or more) but have become uninsurable? What then?

DT is a useless product. I don't know any carrier that offer it and even if I did I would never make it available to my clients.

These points can be turned against any Term Contract, it is the inherent weakness of term policy. There is always the, "What If". Plus generally speaking DT only goes down to half the DB, generally speaking.

 

[WBunch]

Newby -

At what point do you think the owners of DT will drop their policy? Is it when that $100,000 policy is only worth $50,000 and they are paying the same as they did for $100,000? Or maybe at $20,000?

And what if they decide at a later point they need the original amount (or more) but have become uninsurable? What then?

DT is a useless product. I don't know any carrier that offer it and even if I did I would never make it available to my clients.

Most of the DT contracts that I have come across do not decrease fully. Most decrease till it is worth half of the face value and then they remain level.

 

[Winter_123]

Newby -

At what point do you think the owners of DT will drop their policy? Is it when that $100,000 policy is only worth $50,000 and they are paying the same as they did for $100,000? Or maybe at $20,000?

And what if they decide at a later point they need the original amount (or more) but have become uninsurable? What then?

DT is a useless product. I don't know any carrier that offer it and even if I did I would never make it available to my clients.

Ditto

Winter

 

[bluemarlin08]

Try to find a decreasing term product, with an A+ company, that is less expensive than level term, not seen one.