People Have Too Much Life Insurance?

[Brian Anderson]

The weekly “10 things ________ won’t tell you” piece in The Wall Street Journal Sunday led off by claiming life insurance agents won’t tell you that Americans have too much life insurance.

That’s in stark contrast to just about any survey I’ve seen, which all seem to show that the gap in the amount of coverage Americans have compared to what they really need continues to grow. LIMRA studies, for example, say half of U.S. households (58 million) say they need more life insurance, and that the average amount of coverage for U.S. adults has declined to $167,000, down $30,000 from the average coverage in 2004.
If $167,000 is too much life insurance, we’ve got a problem all right.
Please check out the 10 things in the WSJ piece (the link shortens it to "10 things life insurance agents won" but it's really "won't say"), then come back and share your thoughts on this thread.

10 things life insurance agents won

 

[DHK]

#1) Owning too much life insurance... Only if the insurance company says you have too much, then you have too much. $163,000 will only cover a family with a $50,000 income for just over 3 years. Then what?

Regardless of "the average sized policy 10 years ago"... that doesn't mean that it's getting the job done. Unfortunately, I think most policies are sold by price, not by plan. If they think about the plan, it's probably grossly underfunded.

#2) We'd rather sell you investments than insurance... well, I don't want to watch clients who don't have enough savings & protection to lose money that they have no business risking.

#3) Your child doesn't really need life insurance... that's true to a point. Kids do die, and being able to pay for a funeral is a good idea. At minimum, a child rider on an adult policy. But kids may not quality for insurance when they are adults. Plus, there will never be a better time to buy it and lock it in at such a low price. If you can have guaranteed insurance options at regular intervals, it can really be a great plan.

#4) Variable annuities ARE like expensive mutual funds... except they can have a living benefit rider to guarantee a stream of income you can't outlive. Without that, it absolutely is an 'expensive mutual fund'.

#5) Whole life policies may not pay for themselves... with premium offset of policy values. Especially true if the policy is minimally funded.

#6) Waiting years to build up cash value... especially true if the policy is minimally funded.

#7) Toothless regulators? Just print out a Glenn Neasham or Alan Lewis article.

#8) Faking death and collecting? A simple annual review will help combat any problems. And while I agree with not allowing the agent to be power of attorney, the agent isn't the problem here. It's the lack of service after the sale.

#9) Paying off the boss... is only done for 'key man' policies, and all employees must be notified per IRS section 101j, or the company loses the tax benefits.

#10) Long term care coverage... well, I kinda agree with the point. There are so few LTC carriers left in California... that there's only Genworth that's available for the CA Partnership for LTC.

IMO, this is a GREAT PIECE if you're the kind of 'straight-shooter' agent you need to be, and can PROVE that these things are either true or false.

 

[xrac]

The weekly “10 things ________ won’t tell you” piece in The Wall Street Journal Sunday led off by claiming life insurance agents won’t tell you that Americans have too much life insurance.
10 things life insurance agents won

I consider that pure garbage.

 

[houcoogster]

It's true!
Every time I delivered a death benefit check to a grieving family member they told me to "take it back to the company that's too much money".





NOT

 

[rocky top buzz]

How about "10 things Securities Advisors don't want you to know about life insurance?"

1 - You are probably underinsured because we are telling you that you that the market averages 11% a year. But we haven't told you that order of returns is vital and if we have a couple of bad years your portfolio might not do so well.

2 - While we tell you we are "diversifying" your portfolio, every mutual fund and stock we sell you has a guaranteed value of $0. The only true way to diversify is across multiple products (including insurance and annuities).

3 - You should invest your child's college savings in a mutual fund. There is no way the market will drop 35% when your child is 18 and about to go to college and you are needing that money. Of, and if your child dies you only need enough money to bury them. Funeral on Friday and back to work Monday, no need to take tome off to grieve and I'm sure you will be 100% productive and if not, you can just live off your child's college savings plan (after taxes and penalties).

4 - Variable annuities are like mutual funds, but with the added benefit of guarantees. But why do you need guarantees? Suze Orman says the market grows 13% a year every year and never slows down!!

5 - You can have paid-up life insurance, but you would have to give the insurance company more money and you would be missing out on these 15% a year returns I can get you in the market!

6 - And you'll never build cash value because you are capped on your IUL. And don't worry, 2008 will never happen with my investments (Did I mention the guarantees on these mutual funds? never mind).

7 - Funny how Kenneth Lay and Bernie Madoff were able to cause so much havoc under the watchful eye of their state insurance commissions. Oh wait, weren't those guys under the authority of the federal government?

8 - Sure, someone could fake your death and steal your life insurance, you could also get struck by lightning on a sunny day. But you are far more likely to have someone sell you a fraudulent investment. Ever watch boiler room?

9 - If you live, did you know your boss will make a profit off of your work!!?! And they will invest that profit with me where I will earn 13% just like Suze Orman said! Say it ain't so! Oh and buy the way, if your employer collects on your death benefit, it is because they paid the premiums for it.

10 - Instead of buying LTC insurance, or a Life/LTC hybrid, invest your money with me to cover LTC needs. There is no guarantee you will have any money when you need it, and it will be taxable, but I'm going to earn 13%!!!

 

[xrac]

How about "10 things Securities Advisors don't want you to know about life insurance?"

1 - You are probably underinsured because we are telling you that you that the market averages 11% a year. But we haven't told you that order of returns is vital and if we have a couple of bad years your portfolio might not do so well.

2 - While we tell you we are "diversifying" your portfolio, every mutual fund and stock we sell you has a guaranteed value of $0. The only true way to diversify is across multiple products (including insurance and annuities).

3 - You should invest your child's college savings in a mutual fund. There is no way the market will drop 35% when your child is 18 and about to go to college and you are needing that money. Of, and if your child dies you only need enough money to bury them. Funeral on Friday and back to work Monday, no need to take tome off to grieve and I'm sure you will be 100% productive and if not, you can just live off your child's college savings plan (after taxes and penalties).

4 - Variable annuities are like mutual funds, but with the added benefit of guarantees. But why do you need guarantees? Suze Orman says the market grows 13% a year every year and never slows down!!

5 - You can have paid-up life insurance, but you would have to give the insurance company more money and you would be missing out on these 15% a year returns I can get you in the market!

6 - And you'll never build cash value because you are capped on your IUL. And don't worry, 2008 will never happen with my investments (Did I mention the guarantees on these mutual funds? never mind).

7 - Funny how Kenneth Lay and Bernie Madoff were able to cause so much havoc under the watchful eye of their state insurance commissions. Oh wait, weren't those guys under the authority of the federal government?

8 - Sure, someone could fake your death and steal your life insurance, you could also get struck by lightning on a sunny day. But you are far more likely to have someone sell you a fraudulent investment. Ever watch boiler room?

9 - If you live, did you know your boss will make a profit off of your work!!?! And they will invest that profit with me where I will earn 13% just like Suze Orman said! Say it ain't so! Oh and buy the way, if your employer collects on your death benefit, it is because they paid the premiums for it.

10 - Instead of buying LTC insurance, or a Life/LTC hybrid, invest your money with me to cover LTC needs. There is no guarantee you will have any money when you need it, and it will be taxable, but I'm going to earn 13%!!!

Better than the article in the WSJ.

 

[pfg1]

How about "10 things Securities Advisors don't want you to know about life insurance?"

1 - You are probably underinsured because we are telling you that you that the market averages 11% a year. But we haven't told you that order of returns is vital and if we have a couple of bad years your portfolio might not do so well.

2 - While we tell you we are "diversifying" your portfolio, every mutual fund and stock we sell you has a guaranteed value of $0. The only true way to diversify is across multiple products (including insurance and annuities).

3 - You should invest your child's college savings in a mutual fund. There is no way the market will drop 35% when your child is 18 and about to go to college and you are needing that money. Of, and if your child dies you only need enough money to bury them. Funeral on Friday and back to work Monday, no need to take tome off to grieve and I'm sure you will be 100% productive and if not, you can just live off your child's college savings plan (after taxes and penalties).

4 - Variable annuities are like mutual funds, but with the added benefit of guarantees. But why do you need guarantees? Suze Orman says the market grows 13% a year every year and never slows down!!

5 - You can have paid-up life insurance, but you would have to give the insurance company more money and you would be missing out on these 15% a year returns I can get you in the market!

6 - And you'll never build cash value because you are capped on your IUL. And don't worry, 2008 will never happen with my investments (Did I mention the guarantees on these mutual funds? never mind).

7 - Funny how Kenneth Lay and Bernie Madoff were able to cause so much havoc under the watchful eye of their state insurance commissions. Oh wait, weren't those guys under the authority of the federal government?

8 - Sure, someone could fake your death and steal your life insurance, you could also get struck by lightning on a sunny day. But you are far more likely to have someone sell you a fraudulent investment. Ever watch boiler room?

9 - If you live, did you know your boss will make a profit off of your work!!?! And they will invest that profit with me where I will earn 13% just like Suze Orman said! Say it ain't so! Oh and buy the way, if your employer collects on your death benefit, it is because they paid the premiums for it.

10 - Instead of buying LTC insurance, or a Life/LTC hybrid, invest your money with me to cover LTC needs. There is no guarantee you will have any money when you need it, and it will be taxable, but I'm going to earn 13%!!!

LOL, nicely done

 

[Newby]

How about "10 things Securities Advisors don't want you to know about life insurance?" 1 - You are probably underinsured because we are telling you that you that the market averages 11% a year. But we haven't told you that order of returns is vital and if we have a couple of bad years your portfolio might not do so well. 2 - While we tell you we are "diversifying" your portfolio, every mutual fund and stock we sell you has a guaranteed value of $0. The only true way to diversify is across multiple products (including insurance and annuities). 3 - You should invest your child's college savings in a mutual fund. There is no way the market will drop 35% when your child is 18 and about to go to college and you are needing that money. Of, and if your child dies you only need enough money to bury them. Funeral on Friday and back to work Monday, no need to take tome off to grieve and I'm sure you will be 100% productive and if not, you can just live off your child's college savings plan (after taxes and penalties). 4 - Variable annuities are like mutual funds, but with the added benefit of guarantees. But why do you need guarantees? Suze Orman says the market grows 13% a year every year and never slows down!! 5 - You can have paid-up life insurance, but you would have to give the insurance company more money and you would be missing out on these 15% a year returns I can get you in the market! 6 - And you'll never build cash value because you are capped on your IUL. And don't worry, 2008 will never happen with my investments (Did I mention the guarantees on these mutual funds? never mind). 7 - Funny how Kenneth Lay and Bernie Madoff were able to cause so much havoc under the watchful eye of their state insurance commissions. Oh wait, weren't those guys under the authority of the federal government? 8 - Sure, someone could fake your death and steal your life insurance, you could also get struck by lightning on a sunny day. But you are far more likely to have someone sell you a fraudulent investment. Ever watch boiler room? 9 - If you live, did you know your boss will make a profit off of your work!!?! And they will invest that profit with me where I will earn 13% just like Suze Orman said! Say it ain't so! Oh and buy the way, if your employer collects on your death benefit, it is because they paid the premiums for it. 10 - Instead of buying LTC insurance, or a Life/LTC hybrid, invest your money with me to cover LTC needs. There is no guarantee you will have any money when you need it, and it will be taxable, but I'm going to earn 13%!!!

Great post. You need to submit that to the magazine.

 

[outlander]

How about "10 things Securities Advisors don't want you to know about life insurance?" 1 - You are probably underinsured because we are telling you that you that the market averages 11% a year. But we haven't told you that order of returns is vital and if we have a couple of bad years your portfolio might not do so well. 2 - While we tell you we are "diversifying" your portfolio, every mutual fund and stock we sell you has a guaranteed value of $0. The only true way to diversify is across multiple products (including insurance and annuities). 3 - You should invest your child's college savings in a mutual fund. There is no way the market will drop 35% when your child is 18 and about to go to college and you are needing that money. Of, and if your child dies you only need enough money to bury them. Funeral on Friday and back to work Monday, no need to take tome off to grieve and I'm sure you will be 100% productive and if not, you can just live off your child's college savings plan (after taxes and penalties). 4 - Variable annuities are like mutual funds, but with the added benefit of guarantees. But why do you need guarantees? Suze Orman says the market grows 13% a year every year and never slows down!! 5 - You can have paid-up life insurance, but you would have to give the insurance company more money and you would be missing out on these 15% a year returns I can get you in the market! 6 - And you'll never build cash value because you are capped on your IUL. And don't worry, 2008 will never happen with my investments (Did I mention the guarantees on these mutual funds? never mind). 7 - Funny how Kenneth Lay and Bernie Madoff were able to cause so much havoc under the watchful eye of their state insurance commissions. Oh wait, weren't those guys under the authority of the federal government? 8 - Sure, someone could fake your death and steal your life insurance, you could also get struck by lightning on a sunny day. But you are far more likely to have someone sell you a fraudulent investment. Ever watch boiler room? 9 - If you live, did you know your boss will make a profit off of your work!!?! And they will invest that profit with me where I will earn 13% just like Suze Orman said! Say it ain't so! Oh and buy the way, if your employer collects on your death benefit, it is because they paid the premiums for it. 10 - Instead of buying LTC insurance, or a Life/LTC hybrid, invest your money with me to cover LTC needs. There is no guarantee you will have any money when you need it, and it will be taxable, but I'm going to earn 13%!!!

Standing "O" Clap, Clap

 

[gduell]

What a raft of b.s. The Wall Street Journal has descended into a strident, factually feckless, ideological megaphone like all of Murdock's media outlets.