Whole Life Policy Review

[Robert Barney]

You got that right!! When I started they were showing UL's at 11% and paying premiums for 7 years. Who would have thought interest rates would be on a 30 year decline?

I went into my past editions of Compulife, to give you guys an idea of the change in prices over the last 10 years.

10 years ago, a level to 100 no lapse UL (there were no "to 121" products at that time), for a 50 year old, male non-smoker in preferred plus health, for $1,000,000, had an annual premium of $8,720. (Amerus or Indianapolis Life).

Today, for the same 50 year old, "to age 121", $12,136.50 per year.

That's a 50% increase in premium.

Interest rates in 2006? Not exactly double digit.

 

[rousemark]

That.

Larry, are you more insurable today than you were two years ago?

Don't know about Larry but I certainly am!

 

[scagnt83]

That's a 50% increase in premium.

Interest rates in 2006? Not exactly double digit.

10 years ago the 10 Year Yield was around 4.5%-5%. Today it is at 2%. That is a little over a 50% decrease in yield.

Another way to look at it is that they have increase around 3.5% per year. Which is pretty much in line with general inflation. But since we are living longer than ever you would think that premiums increases would stay below inflation.

Interest rates are the only logical reason Premiums would increase that much. Insurers are making 50% less on the majority of their holdings... so they are forced to charge 50% more.


But that is a great example for why putting off coverage just makes things more expensive. Thank you for sharing that Robert. I think it would be really cool to see a graph showing average term rates and gul rates over the past 20 or 30 years.

 

[Robert Barney]

Thank you for sharing that Robert. I think it would be really cool to see a graph showing average term rates and gul rates over the past 20 or 30 years.

Term rates:

Term4sale - History of Term Life Insurance Rates

 

[scagnt83]

Term rates:

Term4sale - History of Term Life Insurance Rates

Thanks! Very interesting to see the differences between the various health ratings.

 

[WinoBlues]

Term rates:

Term4sale - History of Term Life Insurance Rates

That is very cool.

 

[LGilmore]

That.

Larry, are you more insurable today than you were two years ago?

Why no, I am not more insurable today than I was two years ago.... On the good side, I get to stop wearing one of my boots to take pressure off the wound I have had for 21 months. In a few more weeks, I should be able to stop wearing the boot on my amputation from last year.

I mean who would have thought that blisters from flip flops would max my deductible and co insurance out 3 years in a row?

Oh and I forgot to mention the sudden appearance of Afib 24 months ago where they tried to jump start me by killing me and letting me reboot.

So buying whole life in my 20's when I could still run a 4.6 40 at 6'7" and 250lbs while playing rugby and soccer turned out to be a good idea...

locking in a price with a rising death benefit turned out to be a good idea for me and the numerous people I have met along the way. Very few people get healthier as they age.

 

[pfg1]

locking in a price with a rising death benefit turned out to be a good idea for me and the numerous people I have met along the way. Very few people get healthier as they age.

Spot on.

Buying perm ins at a young age is a great thing if the budget allows. So many more pro's to owning it, even above getting less healthy over time.

I know I haven't been at this nearly as long as many of you... but I've not personally met anyone that has said they regretted buying permanent insurance 20-30-40yrs ago. I have met plenty that said they regretted NOT buying it.

I have several clients that have perm WL policies that the dividend is 3-4x the premium. My wife has a policy her mother bought on her 39yrs ago... premium is less than $60/yr, dividend alone last year was $250.

 

[scagnt83]

The only ones that I have met who regret it (or were not totally happy) were vastly over-promised what it would do by the agent. Usually they were promised that the policy would be paid up by a certain date and it was not.

No insurance product is bad or dangerous. The danger is in the design of the policy and the application of it to the situation.

 

[WinoBlues]

Why no, I am not more insurable today than I was two years ago.... On the good side, I get to stop wearing one of my boots to take pressure off the wound I have had for 21 months. In a few more weeks, I should be able to stop wearing the boot on my amputation from last year.

I mean who would have thought that blisters from flip flops would max my deductible and co insurance out 3 years in a row?

Oh and I forgot to mention the sudden appearance of Afib 24 months ago where they tried to jump start me by killing me and letting me reboot.

So buying whole life in my 20's when I could still run a 4.6 40 at 6'7" and 250lbs while playing rugby and soccer turned out to be a good idea...

locking in a price with a rising death benefit turned out to be a good idea for me and the numerous people I have met along the way. Very few people get healthier as they age.

Control Alt Delete worked?