PrivClientSG
Guru
- 325
I didn't want to threadjack the other thread, but in reading some of the responses, I wanted to ask the question...
"Aside from illustrations...what do you look at to compare the true cost of different whole life policies? What ranking or rankings do you look at"
Secondary question -- will you look at "guarantee" only?
Do you look at "traditional net cost?" Now, that includes the dividends -- projected dividends I want to stress -- and that opens up an entirely different discussion. Yes, the illustration is meaningless. Do you look at one of the "adjusted cost" ratings/numbers? Surrender cost rankings? What about taking the opposite approach and using the "equal outlay" numbers? Does anyone do that? What about the "cash/equity accumulation" method?
Do some of you jump outside the policy approach and use one of the more "scientific" approaches? Linton? If you do use this, just for fun -- compare it to the your surrender cost numbers -- because conceptually, Linton is the reverse of a type of surrender cost approach. The latter sets the interest rate and ends up solving for cost; where the former (Linton) sets cost, and solves for interest. It should therefore be an excellent way to check the interest-adjusted method results because the two methods should rank policies virtually identically.
For those of you familiar with Joseph Belth, Ph.D., he has done a lot on policy comparison methods and related life insurance policy issues, topics, etc. Belth has two (I believe he still has two) ranking comparisons that rank/rate policy "costs" in this type of context.
Thanks.
"Aside from illustrations...what do you look at to compare the true cost of different whole life policies? What ranking or rankings do you look at"
Secondary question -- will you look at "guarantee" only?
Do you look at "traditional net cost?" Now, that includes the dividends -- projected dividends I want to stress -- and that opens up an entirely different discussion. Yes, the illustration is meaningless. Do you look at one of the "adjusted cost" ratings/numbers? Surrender cost rankings? What about taking the opposite approach and using the "equal outlay" numbers? Does anyone do that? What about the "cash/equity accumulation" method?
Do some of you jump outside the policy approach and use one of the more "scientific" approaches? Linton? If you do use this, just for fun -- compare it to the your surrender cost numbers -- because conceptually, Linton is the reverse of a type of surrender cost approach. The latter sets the interest rate and ends up solving for cost; where the former (Linton) sets cost, and solves for interest. It should therefore be an excellent way to check the interest-adjusted method results because the two methods should rank policies virtually identically.
For those of you familiar with Joseph Belth, Ph.D., he has done a lot on policy comparison methods and related life insurance policy issues, topics, etc. Belth has two (I believe he still has two) ranking comparisons that rank/rate policy "costs" in this type of context.
Thanks.