Internet steadily becoming the way consumers learn about insurance products

[Travis Price]

It's tiny. Good thing too, given the very little that people are paying for term life insurance today.

A 40 year old male non-smoker can buy a $1,000,000 10 year term policy for as little as $324.

Do the math.

1,000,000 divided by $324 is 3,086. So the life insurance company needs 3,086 people to pay $324 just so it can collect enough money to pay one claim. Sorry guys, no commissions on this deal.

1 in 3,086. That mean 3,085 people didn't die. 3,085 term policies never paid a claim that year. Those people got ripped off.

Over 10 years, only 10 of the 3,086 people can die, or the life insurance company loses money.

So yeah, very few of those policies will pay a claim.

I'm pretty sure this is still not relevant.

What's your point?

The insurance company needs money to pay claims? No $41?..

Insurance is the transfer of risk. In Term, if the risk doesn't happen, there's no payout and you convert, pay the higher term cost, or drop the coverage. In life, the actuary evaluates the expectation of loss over the year and the company sets aside the claims pool to pay the expected losses.

The other money is invested and they take the arbitrage. Furthermore, they get new money for new policies sold.

Everyone doesn't die immediately after they get insurance. That transfer of risk over time is how the company stays solvent.

I feel like this is insurance 101 and I guess it's me not understanding your point.

 

[somarco]

I saw something about the % of term policies that ever pay out being small.

Most folks outlive their term coverage. Doesn't mean they outlive their need for insurance.

 

[goillini52]

Most folks outlive their term coverage. Doesn't mean they outlive their need for insurance.

I agree. I'm not against term. I think it makes sense for a young family to carry term, especially until their kids are on their own.

 

[WinoBlues]

Most folks outlive their term coverage. Doesn't mean they outlive their need for insurance.

That!

Or their Want of insurance.

 

[WinoBlues]

Need or Want

In the last year I have written two different guys term plans that some would say is wrong.

Client 1 = age 75, sold a 15 year term.
Client 2 = age 65,sold a 15 year term.

I and they are good with that.

 

[Travis Price]

Need or Want

In the last year I have written two different guys term plans that some would say is wrong.

Client 1 = age 75, sold a 15 year term.
Client 2 = age 65,sold a 15 year term.

I and them are good with that.

I don't think it's wrong. I think if you and the client agree that this is the best plan, it's right for them. A lot of people are 0/1 type of people. The best agents understand the clients needs, explain their options, and let them make an informed choice.

 

[DayTimer]

Those people got ripped off.

No, they didn't. During that year they got exactly what they paid for: Life insurance protection with a $1,000,000 death benefit.

The problem you have, and it is common to all "termites," is that you truly do not understand the nature of risk. Insurance protects against pure risks. The prote

This is like the traders and investors and registered reps who do not truly recognize (many do not recognize at all) that trading/investing in the market is speculative, involving speculative risks, and is therefore a form of gambling. The real question a trader should be asking is what is his or her edge. But they do not, they think only of ROI and rate of return, as they assume a positive outcome and are baffled when they lose money to the market.

But with respect to life insurance, so long as the insurance company stood ready, willing, and able to pay the claim then the client got everything that was promised by the contract.

I do not understand folks like you who have such apparent (and obvious?) disdain for the product hanging around a forum devoted its professional practitioners.

 

[goillini52]

I do not understand folks like you who have such apparent (and obvious?) disdain for the product hanging around a forum devoted its professional practitioners.

Marketing.............

 

[WinoBlues]

I don't think it's wrong. I think if you and the client agree that this is the best plan, it's right for them. A lot of people are 0/1 type of people. The best agents understand the clients needs, explain their options, and let them make an informed choice.

OK, it was click bait.

C1 = Partner in a successful company. The 15 yr ONL term we wrote just termed out and the monthly premium guy went to $7,200mo. Owns his CA home but just bought a lot in Hawaii for a vacation / retirement home and wanted more than needed $500,000 protection for his wife. That piece of mind had more value than the premium.

C2 = a farmer with a very large farm. Has a couple large policies already. Wanted $1,000,000 for 10 years, he came in better than applied so for a bit more we moved him to 15 year. He wrote a check for the annual before I finished the app. The piece of mind was of more value than the premium.

Neither of these clients needed the coverage. They wanted it.

My point - people are always giving absolutes in this business. There are no absolutes.

BTW, both are seniors, both consider life insurance for final expenses. *

All IMohsoHO

 

[Travis Price]

OK, it was click bait.

C1 = Partner in a successful company. The 15 yr ONL term we wrote just termed out and the monthly premium guy went to $7,200mo. Owns his CA home but just bought a lot in Hawaii for a vacation / retirement home and wanted more than needed $500,000 protection for his wife. That piece of mind had more value than the premium.

C2 = a farmer with a very large farm. Has a couple large policies already. Wanted $1,000,000 for 10 years, he came in better than applied so for a bit more we moved him to 15 year. He wrote a check for the annual before I finished the app. The piece of mind was of more value than the premium.

Neither of these clients needed the coverage. They wanted it.

My point - people are always giving absolutes in this business. There are no absolutes.

BTW, both are seniors, both consider life insurance for final expenses. *

All IMohsoHO

I agree with what you're doing. It's a matter of what the client needs vs what neat box we have agents put them in.

Sometimes FE is the right option for seniors, sometimes term is...