Selling Life Insurance...

[James]

The entire thread is no more then a exercise and concepts on how to sell Life Insurance and why Whole Life or a solid UL is a good foundation of any economic plan for any individual. While some may or may not agree entirely, it is a fool that think life circles around their preconcieve notions. It is like that song, "*** Wind" by Dylan, "everytime you open your mouth its like...."

Now if you are oppose to WL for whatever reason that is fine. Yet I would think some reasoning outside of name calling would give more credence to one's critism.

Voodoo Economics, I'm going to buy term and invest the difference only if I don't spend it first! That is what these people are basically stating, they have no interest outside of a quick easy sale, true commission whores. Only thing I would come back with, is lost opportunity cost of the BTID crap some espoouse as the great plan.

 

[James]

James, the joke is on you. It's "boorish". You may want to try googling "online dictionary of English".

No, I meant boarish.
Boarish
\Boar"ish\, a. Swinish; brutal; cruel.

In his anointed flesh stick boarish fangs. --Shak.

You are becoming like a trapped animal which tends to become boarish in its own defense, I don't know why you are so defensive?

 

[JMO Fan]

Thanks, I learned something. Mudslinging is both boorish and boarish (as well as boring ). WL & UL are best for many, not all.

Those who are very disciplined at saving probably do better with term & well-diversified investments. Few are that disciplined. Many think they are, but should be sold UL (as they probably won't buy WL).

Those who struggle to keep money in savings, pay off credit cards, and contribute to IRAs, should probably buy WL.

 

[James]

Thanks, I learned something. Mudslinging is both boorish and boarish (as well as boring ). WL & UL are best for many, not all.

Those who are very disciplined at saving probably do better with term & well-diversified investments. Few are that disciplined. Many think they are, but should be sold UL (as they probably won't buy WL).

Those who struggle to keep money in savings, pay off credit cards, and contribute to IRAs, should probably buy WL.

Kind of leaving out a few well known facts are you not? BTID is only as good as the investor is, with the amount we are talking about exactly what is amount to we pay a money manager to increase one's found fortune? Fact 1, people are lousy investors, they either attempt to time the market or buy only after movement of the market has occured, such as trying to duplicate what the market is doing currently. Main reasons why most investors make a whopping 3.2% at the end of the day. Its one of those nasty things some like to call the Human Factor.

 

[Crabcake Johnny]

Well I just cross-sell life and I can tell you what I see; client after client with "$50,000" or $100,000" of perm coverage telling me "but my agent told me never to buy term."

To me, these are commission whores. Wow - you have a $100,000 DB? Well since your mortgage balance alone is $220,000 I guess you're set.

I'm asking every single client about their life. I have YET to run into a SINGLE client who has perm life with a proper DB - not one.

 

[moonlightandmargaritas]

"but my agent told me never to buy term."

To me, these are commission whores. I have YET to run into a SINGLE client who has perm life with a proper DB - not one.

As a veteran of some years in the life insurance wars I can tell you this soooooo true!

Typical scenario:

Client can afford to spend say, $50 per month...

Option 1 $200,000 DB term comp 50%

Option 2 $ 50,000 DB whole comp 75%

Which do you suppose the agent pushes? I hold the insurance companies responsible by the way they incent the comp.

Before you start, I know....less than 1% of term insurance turns into a claim...blah blah blah...so what?

If you doubt whole life is more profitable for the insurance company...just look at the comp.

I've delivered a fair amount of death claims over the years. Not one beneficiary has EVER asked what kind of policy it was...

 

[Delta76]

Client can afford to spend say, $50 per month...

Option 1 $200,000 DB term comp 50%

Option 2 $ 50,000 DB whole comp 75%

Which do you suppose the agent pushes? I hold the insurance companies responsible by the way they incent the comp.


I think it comes down to the agent being unethical. I always sell to death benefit first before the type of coverage. Then I give the term vs. permanent education and ask how much they can reasonably afford assumming their water heater went out and when they look outside, the truck has a flat tire. We then go all term or a blended policy.

Even for the commission whores out there, you will probably make more in the long term selling convertable term, as long as you educate the client and do what is right. Do an annual review and determine if it makes sense to convert a portion next year and each year later. It's deferred compensation to the agent and the client wins now and in the future.

 

[Crabcake Johnny]

And the same client who will not invest when they buy term gets a perm policy, let's the cash accrue then cancels and it's off to Hawaii!!!

Perm is no guarantee that the client will actually save money. You also have these perm life agents pushing their little $50,000 DB policy and the client isn't even participating or maxing their 401K....and in cases there's a match!

Especially when there's a 401K match you'd never possibly recommend perm coverage unless they were already maxed out on the 401K contribution.

Ironically the agent selling term is painted as the commission whore when it's the exact opposite.

Perm life? The client who's maxed the 401K, maxed the IRA, and can afford the correct DB. For "middle class America" take a guess as how many people that is.

 

[bobson]

And the same client who will not invest when they buy term gets a perm policy, let's the cash accrue then cancels and it's off to Hawaii!!!

Perm is no guarantee that the client will actually save money. You also have these perm life agents pushing their little $50,000 DB policy and the client isn't even participating or maxing their 401K....and in cases there's a match!

Especially when there's a 401K match you'd never possibly recommend perm coverage unless they were already maxed out on the 401K contribution.

Ironically the agent selling term is painted as the commission whore when it's the exact opposite.

Perm life? The client who's maxed the 401K, maxed the IRA, and can afford the correct DB. For "middle class America" take a guess as how many people that is.

You are making a few assumptions that aren't true. You assume everyone should save money inside tax deferred vehicles. Here are 3 reasons why someone may not want to. 1. Taxes are going to go up. Pay tax now and take out tax free money later or defer current taxes and pay taxes on a much bigger pile of money. 2. You are forced to start withdrawing qualified money at at 70.5. What happens if the person is still working? Now he's paying taxes on his earnings plus additional taxes on savings he is forced to withdraw. 3. What happens if our friend has an unfortunate incident and he needs access to cash? What happens if our friend has an opportunity and he needs access to cash?

Who benefits from 401Ks the most? Do you ever wonder why there are more mutual funds then there are individual stocks? Do you know which industry pushed for the creation of 401K accounts?

 

[moonlightandmargaritas]

You are making a few assumptions that aren't true. You assume everyone should save money inside tax deferred vehicles. Here are 3 reasons why someone may not want to. 1. Taxes are going to go up. Pay tax now and take out tax free money later or defer current taxes and pay taxes on a much bigger pile of money. 2. You are forced to start withdrawing qualified money at at 70.5. What happens if the person is still working? Now he's paying taxes on his earnings plus additional taxes on savings he is forced to withdraw. 3. What happens if our friend has an unfortunate incident and he needs access to cash? What happens if our friend has an opportunity and he needs access to cash?

Who benefits from 401Ks the most? Do you ever wonder why there are more mutual funds then there are individual stocks? Do you know which industry pushed for the creation of 401K accounts?

Sounds like LEAP to me.

Here's one for you...why should I not 401(k) at a miniumum up to the company match?

Seems like a guaranteed 100% profit to me...