Is FE worth it?

[LostDollar]

Welcome to the Forum, Edward. Hope to correspond with you more in the future. When your grandmother passed, I assume there was quite a bit of cash value, considering she paid more into the policy than the beneficiary received. Keep in mind that as the cash value increase, although it seems like the premium is paying for the original death benefit. In reality, the premium is paying for the difference between the current cash value and death benefit. This means her cost is limited to the amount the insurance company has at risk. Oftentimes, we confuse Premium with Cost of Insurance (or amount at risk.) Therefore, the longer she paid, more and more of her premium dollars were being allocated towards the cash value. Did you consider that a possibility at the time, or not? Hope that makes you feel somewhat better about it.

It seems to me like the person you responded to is talking about a situation where:
to just create an example:

A person bought a $10,000 death benefit life insurance policy and wound up paying $14,000 in premiums for that coverage before they passed away.

For at least some viewers of the situation, it will appear that the policy holder was taken advantage of. I don't think cash value in the policy has anything to do with that viewpoint.

Sometime in the last few years there has been a thread where an agent (I think) posted about an example of that specific situation. A daughter of one of his policy holders caused the policy on her father to be cancelled because he had paid in something like $12,000 for a $10,000 death benefit policy. She believed he had wasted his money and would have been continuing to do so if he would have continued paying premiums.

 

[titeye]

It seems to me like the person you responded to is talking about a situation where:
to just create an example:

A person bought a $10,000 death benefit life insurance policy and wound up paying $14,000 in premiums for that coverage before they passed away.

For at least some viewers of the situation, it will appear that the policy holder was taken advantage of. I don't think cash value in the policy has anything to do with that viewpoint.

Sometime in the last few years there has been a thread where an agent (I think) posted about an example of that specific situation. A daughter of one of his policy holders caused the policy on her father to be cancelled because he had paid in something like $12,000 for a $10,000 death benefit policy. She believed he had wasted his money and would have been continuing to do so if he would have continued paying premiums.

Thanks for pointing that out. Prior to getting into FE, I only recommended UL where there death benefit increased after a certain point.

 

[Newby]

It seems to me like the person you responded to is talking about a situation where:
to just create an example:

A person bought a $10,000 death benefit life insurance policy and wound up paying $14,000 in premiums for that coverage before they passed away.

For at least some viewers of the situation, it will appear that the policy holder was taken advantage of. I don't think cash value in the policy has anything to do with that viewpoint.

Sometime in the last few years there has been a thread where an agent (I think) posted about an example of that specific situation. A daughter of one of his policy holders caused the policy on her father to be cancelled because he had paid in something like $12,000 for a $10,000 death benefit policy. She believed he had wasted his money and would have been continuing to do so if he would have continued paying premiums.

I heard a story once where someone had bought a term policy. At the end of the term they had paid in $12,000 and they got NO benefit because they were still alive. They would have loved to get $10,000. Their daughter was furious at how they had been taken advantage of.

Oh wait! This is nearly every term case.

Life insurance is not intended to make a profit on. It's intended to insure a financial risk.

 

[rousemark]

Thanks for pointing that out. Prior to getting into FE, I only recommended UL where there death benefit increased after a certain point.

Or, disappeared completly.

 

[Life Hawk]

Or, disappeared completly.

And where did all that $ go...

 

[DayTimer]

Insurance Agents are an endangered species. I expect in another 10 years our children will be able to see displays at the zoo or the museum, not sure which, labelled "Insurance Agent of the early 21st Century".

Because in the next 10 years the American public is going suddenly going to become responsible and seek out the proper amount of insurance to protect their loved ones?

And while they are at it they will learn what even 98% of curretnly licensed agents do not know about the ability of life insurance not only to provide for a death benefit but also to reduce or eliminate income taxes, pay off debts, fund college educations ...?

I like you, LD, but you do sometimes come across as almost having a disdain for us agents, you know?

 

[DayTimer]

No, the agent is not going to go away.. There will always be a need for an agent to approach those people who will not take the initiative to buy it own their own.

We may disagree on some things, Louis, but we agree on some pretty important things as well.

 

[titeye]

And while they are at it they will learn what even 98% of currently licensed agents do not know about the ability of life insurance not only to provide for a death benefit but also to reduce or eliminate income taxes, pay off debts, fund college educations ...?

I find this hard to believe, but if this is true, it means that 98% of licensed agents know just enough about insurance to hurt people. Is this a true statistical fact?

 

[goillini52]

I find this hard to believe, but if this is true, it means that 98% of licensed agents know just enough about insurance to hurt people. Is this a true statistical fact?

That's an exaggeration, it's more like 97%.

 

[Travis Price]

That's an exaggeration, it's more like 97%.

97.4%