Why does America hate whole life so much?

[LGilmore]

Funny thing, I've never seen that on a policy document. Tell me, if you buy whole life policy versus term, and you quit in the first 10 years, was the whole life a better deal?

Bob? Why would you buy whole life for ten years?

 

[toolbelt]

Bob? Why would you buy whole life for ten years?

Because it helps support his narrative?

 

[wln417]

Allen Trent: What company is that?

 

[Allen Trent]

Allen Trent: What company is that?

Captive Michigan only Multi line company

 

[Robert Barney]

Bob? Why would you buy whole life for ten years?

According to my sources, about HALF the whole life policies sold today will lapse in the next 10 years. Another half of those that remain will be gone in 20 years. Lapsed whole life policies were anything but whole life. That being the case, I think it is a fair question to ask which whole life policy would leave you in better shape versus term, if it is cancelled within 10 years?

Now I already know the answer, there aren't any. But watching some of you avoid the question should underline for consumers watching this conversation, and wondering whether to buy whole life or term, that unless you PLAN to keep it for the VERY long time, whole life is a bad deal and term makes much more sense.

It reminds me of the timeshare market. I feel bad for for people who get soaked into buying a time share from a time share salesman, and who later find out they really didn't understand what they were buying. Who benefits from that sale? The agent who sold it, and the reseller market where people pick up those timeshares for pennies on the dollar. I know, I own resold timeshares and I am staying in one this week.

Who benefits from premature lapses of whole life? Easy, life insurance companies who can then move money from their reserves into their profits.

While I think Whole Life is a great solution for some estate planning problems, and while I own some permanent insurance myself, the majority of consumers who buy it would be better off with term. In that regard, folks like Primerica and Dave Ramsey are providing a useful service to consumers even if they are too extreme in their absolute dislike of whole life products.

 

[Tahoe Ray]

You will not gain any traction Allen. Some folks are set in their ways and not open to other options. Its ok. We know that Term & Perm both fill a great need. I have a 63yo client that did a 7pay and by year 6 he could walk without a loss, by 10 he has $80k more walk away cash value than he put in. What a ripoff.

I know you wont accept this. But, below is my own person policy from last spring. I peeled off 100k of term coverage I have as a rider on a UL policy from 15 years ago. I bought the smallest face base WL I could at 25k & then I dropped the max lump sum into PUAR that the contract allowed. I took the money from my excess bank account money making no almost no interest & issuing me a 1099 each year. I don't think this is such a horrible policy for me. commits me to almost no annual premium for the small permanent face, I can have dividend pay part or all of the base premium & I can exchange for RPU coverage at any time.

BTW-- it is break even at 2nd anniversary compared to the term rider I was paying for will be a loss. with me being in the 35% -40% combined tax bracket, my bank interest was essentially zero. at 10 year anniversary, it illustrates to be 9200 positive -that is cumulative 32% gain over & above my premium whereas my term was going to be 100% loss if I lived. I did this all without being underwritten.

I am not saying everyone should buy WL. I believe everyone should max out term, max out retirement savings. but after that, I believe WL has a very solid place compared to most safe money equivalents of bank or bond money places to save. millions of Americans need at least FE WL or 25k-100k WL plans in place to help their spouse if they die in their 60s -90s as most Americans leave their spouses in a bad place.

keep believing that permanent has no place & term is the only solution, but you are 1000% percent wrong no matter what you can make a spreadsheet look like. spreadsheets don't factor in human nature or unforeseen life events that most families face many times

THEN:

According to my sources, about HALF the whole life policies sold today will lapse in the next 10 years. Another half of those that remain will be gone in 20 years. Lapsed whole life policies were anything but whole life. That being the case, I think it is a fair question to ask which whole life policy would leave you in better shape versus term, if it is cancelled within 10 years?

Now I already know the answer, there aren't any. But watching some of you avoid the question should underline for consumers watching this conversation, and wondering whether to buy whole life or term, that unless you PLAN to keep it for the VERY long time, whole life is a bad deal and term makes much more sense.

It reminds me of the timeshare market. I feel bad for for people who get soaked into buying a time share from a time share salesman, and who later find out they really didn't understand what they were buying. Who benefits from that sale? The agent who sold it, and the reseller market where people pick up those timeshares for pennies on the dollar. I know, I own resold timeshares and I am staying in one this week.

Who benefits from premature lapses of whole life? Easy, life insurance companies who can then move money from their reserves into their profits.

While I think Whole Life is a great solution for some estate planning problems, and while I own some permanent insurance myself, the majority of consumers who buy it would be better off with term. In that regard, folks like Primerica and Dave Ramsey are providing a useful service to consumers even if they are too extreme in their absolute dislike of whole life products.

LOL...

 

[DHK]

Which really means that the AGENT needs to bring a higher level of thinking, knowledge, and wisdom to the sale so they can truly SERVE their clients.

I am convinced that most don't - which is why people end up BELIEVING they were taken.

But @Robert Barney keeps blaming the PRODUCT.

I blame the AGENT.

I'd recommend any agent who wants to elevate their game, to check out the Confessions of a CPA book series by Bryan Bloom, CPA

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[toolbelt]

which whole life policy would leave you in better shape versus term, if it is cancelled within 10 years?

So in other words, if two people buy different products of which they had no use for, the person paying less made the wiser choice? When discussing life insurance, it makes the most sense to have it in force on the day you die. If you plan on dying prematurely, then obviously term is the best option. If we're just looking at throwing away money, Vegas is probably the best choice.