WOW...Mind Blown: "Term > Permanent"

Aug 16, 2016

  1. BYSFG
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    BYSFG Super Genius

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    So I'm browsing social media sites and my mind is just blown right now with how many agents out there are posting up messages such as/similar too:

    "If you have a whole life insurance policy, you may be paying too much! Drop your policy and buy term!"

    "Don't buy whole life! If you borrow from your whole life policy, you'll have to pay back interest at like 8%! Buy term instead and invest the rest and get 10-20% interest rate! In the next 25 years you won't ever need life insurance!"

    Since we talk shop in here...I stumbled on an agent saying how their term product covers you until 95 and that its the best on the market... :mad:

    ...Wow just wow...I don't know why this agitates me so much. Makes me feel helpless for some reason knowing some family out there is probably getting the short end of the stick.

    When you guys stumble onto these situations, do you guys do anything?
     
    BYSFG, Aug 16, 2016
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  2. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    It's easy to stand out against such biased drivel. "My job is to help you to make educated financial decisions that feel right to you, including doing nothing, if that's what feels right."

    Then I give them Lew Nason's version of the 5-minute lesson on life insurance comparing term to an investment-grade permanent plan. It's essentially outlined here:

    IARFC

    I have all kinds of other tools that I've developed to help people see the value of permanent life insurance, including a 23-point checklist (proprietary to me) comparing life insurance to mutual funds, 401(k)/IRA, Roth, and 529 plans.

    In addition, I show the difference between term, a base whole life only, and a maximum-funded policy based on a $10,000/year premium.

    Never make the client wrong. Show the client how they are right, but that you are also right.

    As far as the term product guaranteed to age 95, it's guaranteed renewable to age 95, but that does not necessarily mean that the premium is guaranteed level. Two completely different things.


    Now, if you're talking about being with a client who wants to cancel their permanent policy and go with term with another agent... let them. They just fired you. As John Savage would tell them "You're right. You'll be in far better hands with this agent. He's got it all together." Then walk out and call on another prospect.


    Know what's also fun? Anybody quoting any %'s online... especially earning 10-20% per year... just send them a message asking which product is guaranteeing that rate since they didn't include policy form numbers or an expiration date, OR if they are securities licensed and if this was an authorized advertisement to the public.

    As such, you can give them some free career compliance advice to only post %'s specific to products and have such postings approved by the appropriate compliance department in advance complete with either policy form numbers or a B/D advertising filing number. Otherwise, such advertisements can and will be held against them in arbitration or a court of law, should they not be able to deliver on it.

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    There's still an article on LifeHealthPro.com regarding term vs permanent... and it's been going on for a couple of years now.

    Just let them have their fun. I've got better things to do than to wrestle with the pigs.

    Besides, it just doesn't pay well to convert the opposition, unless you recruited them and they want to learn. Otherwise, let them sell term and believe in it. No problem. I'll just convert it later! :)
     
    DHK, Aug 16, 2016
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  3. pfg1
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    pfg1 Guru

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    There is a whole segment of this industry that has been trained that way, Buy Term Invest the Difference. The reality of it is that it more often ends up Buy Term Spend the Difference.

    They both have their place. I prefer permanent, but certainly use and sell term as well. I'm not going to fight anyone either, but I will try and educate them on the truth of how the products work.
     
    pfg1, Aug 16, 2016
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  4. marindependent
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    marindependent Guru

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    I personally and professionally think that there is bias in each direction.

    There are agents out there that will claim that Whole Life Insurance is a scam.

    There are also agents out there that will tell you that will sell a Whole Life Insurance policy to a poor lady on a fixed income that has no dependents.

    There are some areas where Whole Life Insurance can be the best fit, but more often than not a term life insurance policy is a better fit.

    However, it does depend on the situation.
     
  5. rousemark
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    rousemark Still Here!

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    No, they really do invest the difference . They "invest" in new cars, boats, refrigerators, ect. :)
     
  6. pfg1
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    pfg1 Guru

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    The people in my area "invest" $2-4k/yr per kid in youth travel sports for 10yrs hoping to get a scholarship :1frown:
     
    pfg1, Aug 16, 2016
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  7. Newby
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    Newby Guru

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    Poor ladies on fixed income with no dependents usually DO want whole-life. They want it to cover their funeral and cemetery expenses.
     
    Newby, Aug 16, 2016
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  8. BYSFG
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    BYSFG Super Genius

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    Maybe I'll send them a message. I highly doubt they (comments I saw) are even securities licensed from the way they are posting.

    Ill definitely look that up on lifehealthpro.

    Only agents Ive met so far claiming whole life is a scam usually refers back to Mr. Ramsey or Ms. Orman.

    I agree that its on a case to case scenario but unless the client is bleeding out cash and breaking the bank just to keep their policy, I most likely would not recommend replacing their permanent with a term.

    I only ever recommend term to meet certain needs such as when budgeting but with need of income replacement in an event of a premature death, off set mortgage in similar events, etc. with a permanent policy as the base for means of final expenses.
     
    BYSFG, Aug 16, 2016
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  9. rousemark
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    rousemark Still Here!

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    Or, they are hoping the kid will make the pros and become their meal ticket.
     
  10. bill3173
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    bill3173 Guru

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    No kidding. More people are buying term that should be getting WL, or at the very least GUL, than the other way around. Most of the people listening to the "tv experts" are dumb as shitt.
     
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