I was wondering how so many people who are licensed or claim to be licensed in the field of Life insurance will spout off Suze Orman sound bites about how term is the only kind of insurance that should be purchased without asking a single question about the persons situation?
Income levels, estate implications, family situations and health are just a few of the factors that could make a term insurance recommendation entirely incorrect for a person yet I never see anybody ask those questions. Is it that they do not care or do not know any better?
Also Why is the only part that they harp upon is that UL, VUL etc is a bad investment? Why do you not consider that permanent coverage should be recommended only as on a death benefit basis and the advantages of liquid, income tax free, guaranteed money for those who survive the insured and not the investment advantages to the insured? Do you also point out that investments are equally bad when viewed as an insurance product? I agree. There is no one insurance product that is for everyone in every situation. Every person is different. They all have different reasons for purchasing an insurance product. They are in different life stages that will make one product a better fit for THEM than another product. They all have different goals for what they want the product to do for them. It is up to the agent to listen to what the client wants and needs and then give them the information and the options available so they can make the right decisions.
I believe the agents that harp on one product are just repeating what they learned or are just promoting what they sell. The thing that strikes me as "funny" is that if you follow the links in their post there are advertisements for whole and universal life products. I guess in the end it's just about money.
I'm new here but I have noticed that many agents really do try to inform the person that asked the question. There was a question yesterday about lies that insurance agents say. I may be naive but I believe that most agents try to tell the truth. The problem is that it's the truth as they see it or as they have been taught. It's not that they don't care but they don't take the time to find out what harm they can cause a person by their ignorance. Many agents here will usually have as part of their answer "see a local agent" because insurance laws are so different across state lines and around the world.
The general public has so little knowledge about insurance. This is one reason why insurance companies have such a bad reputation. The agent doesn't tell them the cons about a product, just the pros (as they were taught). And they tell the cons about the competing product, not the pros (again, as they were taught). So when something isn't covered the public is surprised.
So no - one size doesn't fit all! From a non agent I would say because they like to hear themselves talk. Everyone likes to put across their point of view on some subject even when it doesn't really address the question at hand.
But this is balanced by the stupid people that would ask such a question without knowing who is really answering the question, so they have no idea if the advice is good or bad.
And I love the fact that you will have 5 answers and none of them agree with each other. Because for the majority of people, Term is the best insurance. It's pure insurance. UL, VUL, is gimicky at best - and it IS a bad investment, at a rotten rate of return.
If two average people live to 80 and die, one with whole life, the other with term that he let cancel at 60 and invested the difference, the UNINSURED one will have MORE MONEY to leave to his loved ones.
Insurance is NOT a good investment. Yes, it's an investment - with a rotten return, and you can do MUCH better in an index fund.
You've been listening to your marketing rep too much, and not doing enough thinking on your own - or running the numbers yourself. DO THE MATH.
Yes, I point out that cats make bad dogs, dogs make bad cats, investments aren't insurance, and that YOU HAVE TO DEFINE THE NEED FIRST. And if the need/goal is INVESTING, insurance isn't the best product. If the need/goal is a BENEFIT PAYOUT UPON DEATH to take care of kids, well, they GROW UP, ya know?? That's not a permanent need!!! If you notice, I tend to be up front with people that this forum will only result in general advice and they should talk to an independent agent.
Look at my post yesterday and you will see that I do think there are times when insurance as a savings vehicle is suitable, maybe not the best thing going, but suitable. I love competing against agents with the other mindset in the field. I've never had someone confuse an investment as insurance. You Had the best answer to your own question!
Gotcha! People just learn enought to SOUND like they know what they are talking about by listening to talk radio shows (Suzi Orman, Dave Ramsey etc.) and parroting what they hear.
It's funny to hear people ask about insurance for funeral expenses and these "advice givers" pushing term. Do the math. Term is great for what it is designed for but it is terrible (and usually unobtainable) for a 66 year old person who wants to insure themself for just enough for burial expenses without buying $100,000+ of temporary coverage.
Show me 10-people who bought term life and I will show you 5-who have the correct product and 5-more who don't even understand when their coverage will end, haven't invested the difference because they didn't know they needed to, and will be mad at the end of the term that they lost all their money and have nothing to show for it.
I'm not anti-term. But term is definitely NOT the right solution for everyone's needs. |
