Insurance Agent Forum

[marcircus]

Airborne1 and others who do not care for W/L:

Airborne1 stated in another thread:

I'm no longer in the habit of bashing my head against the wall with folks who think W/L is even a decent product, much less a great one.

I am researching CV insurance for my children. I welcome all opinions, that is how one learns. Would you be so kind as to share some reasons you do not think W/L is a decent product.

Is it because UL's, EIUL's and VUL's are available and they are far superior?

Is there something inherently undesirable about them few people focus on?

I really appreciate all comments.

Thanks so much

[STIBROKER@AUSTIN.RR.COM]

put me down as WL are great for kids.......

[marcircus]

Stibroker

put me down as WL are great for kids.......

Thanks for your input.

1. Why great for kids.
2. Does that mean not for adults? Why?

[STIBROKER@AUSTIN.RR.COM]

Originally Posted by marcircus

Thanks for your input.

1. Why great for kids.

because you can not sell them term and its cheap and guaranteed....

Originally Posted by marcircus

2. Does that mean not for adults? Why?

to expensive to cover the face amount needs.......

[James]

I suppose that I'm on the W/L is preferable. The UL structure will allow more flexibility but that comes at a cost. If a DB is the main objective then a W/L is without a doubt the best way to go. If one needs flexibility as in DB, Premium then the UL is preferable. As in debt management the UL generally is more desirable with its flexibility, even though WL is adding in flexibility also of late.

[STIBROKER@AUSTIN.RR.COM]

Originally Posted by James

If a DB is the main objective then a W/L is without a doubt the best way to go.

really....how much would 5 mill in WL run me......

[marcircus]

Stibroker

really....how much would 5 mill in WL run me...

Wouldn't it become prohibitively expensive in later years whereas the W/L woulld stay level?

Isn't it a pay now or pay later proposition?

Interesting side note on UL/VUL: I found Sun Life of Canada (not licensed to sell the product in the US - - I don't think) has four options.

In addition to what is traditionally offered in the US (I forget if it is called option A and B or option 1 and 2), they offer an inflation adjusted DB. So, if you buy a million dollar policy and inflation next year is 3%, they adjust the DB to $1,030,000.

They also have a policy where the DB remains constant until the tail end of the policy. For example, let's say you got a $1,000,000 UL/VUL. Well, say starting at age 50 or 55 it declines sharply and is readjusted say to $50,000. A nice feature to keep the COI affordable.

[James]

Originally Posted by marcircus

Stibroker

Wouldn't it become prohibitively expensive in later years whereas the W/L woulld stay level?

Isn't it a pay now or pay later proposition?

Interesting side note on UL/VUL: I found Sun Life of Canada (not licensed to sell the product in the US - - I don't think) has four options.

In addition to what is traditionally offered in the US (I forget if it is called option A and B or option 1 and 2), they offer an inflation adjusted DB. So, if you buy a million dollar policy and inflation next year is 3%, they adjust the DB to $1,030,000.

They also have a policy where the DB remains constant until the tail end of the policy. For example, let's say you got a $1,000,000 UL/VUL. Well, say starting at age 50 or 55 it declines sharply and is rfeadjusted say to $50,000. A nice feature to keep the COI affordable.

You can't argue with the likes of Sti when he floats out something like "how much is it for 5 mill". Obviously someone making 50 grand a year couldn't afford a 5 mill or for matter a 1 mill WL or UL for the most part. Yet I would suggest that is overinsured, of course one can find situations where it may apply but for the most part I don't run accross it.

[marcircus]

James, if I may:

I know you are a big proponent of WL. May I ask you why?

1. Why do you like it so much. (And I do not mean that argumentatively, just to elicit a response). I can see that the benefits are: (1) permanent coverage, (2) level premiums, and (3) more affordable than term (in the later years). But as I see it, it takes decades to build up any decent cash value. An insured should be awful young when they start it (ofcourse, they probably could not really afford a decent DB) You seem to really like the CV aspect of it especially the LTC (riders ?). It really intrigues me why you seem to be so enthusiastic about the product - - to me it seems as if though it takes a lifetime to build up the CV, hence hardly noteworthy.

2. I know you have said WL is getting more flexible. How?

3. I am curious why it builds up cash value - - why was it designed like that. Do you have any idea. What is the historical origin/context? Let's face it, what product sets aside part of your payments in a savings account for you (okay, I suppose credit card rewards programs do to an extent and airline frequent flier miles, but what else). What I mean by curious why it builds up cash value, what were the designers of the product thinking/intending. What is the rationale to accumulate CV? Is my question clear? I wonder if originally, maybe 100 years ago, it started out as a savings program with a DB in case you did not reach your savings goal when you died.

4. Which came first, term or WL?

5. If I may ask your further indulgence, would you mind describing the top two or three ideal candidates or scenarios for WL.

I guess I really ask, because I see it kind of like a "vanilla" flavored product (I don't know if that makes sense. You walk into a Baskin Robbins and one is attracted by all the other ice cream with fancy names and colors but by golly, vanilla sells and it is fundamental to the industry).
Further, I am not that impressed with the buildup of CV. As I said earlier, one better start when one is awful young. But then an advantage is the predictable premium that one can just pay on auto-pilot; takes no work, no monitoring, no thought. No slight intended, those are good things. If one buys insurance, they want a sure thing (or at least should have it available) they do not need to take risks wondering if they will be able to afford the COI in 10 years or how much the minimum premium will be next year to keep the policy in force.


Anyway, since I see it as a plain Jane vanilla product and you are so enthusastic about it (and are the professional) I obviously do not appreciate all the subtleties, attributes, and benefits of it.

Thanks James.

[Airborne1]

I tried sending you an email, but it got bounced back.

Also, a PM.

What industry are you in ? Not asking because I'm nosy, but it would help to know how to respond to some of your questions.

[marcircus]

Airborne1

Thanks for your efforts in reaching me.

[James]

Originally Posted by marcircus

James, if I may:

I know you are a big proponent of WL. May I ask you why?

1. Why do you like it so much. (And I do not mean that argumentatively, just to elicit a response). I can see that the benefits are: (1) permanent coverage, (2) level premiums, and (3) more affordable than term (in the later years). But as I see it, it takes decades to build up any decent cash value. An insured should be awful young when they start it (ofcourse, they probably could not really afford a decent DB) You seem to really like the CV aspect of it especially the LTC (riders ?). It really intrigues me why you seem to be so enthusiastic about the product - - to me it seems as if though it takes a lifetime to build up the CV, hence hardly noteworthy.

2. I know you have said WL is getting more flexible. How?

3. I am curious why it builds up cash value - - why was it designed like that. Do you have any idea. What is the historical origin/context? Let's face it, what product sets aside part of your payments in a savings account for you (okay, I suppose credit card rewards programs do to an extent and airline frequent flier miles, but what else). What I mean by curious why it builds up cash value, what were the designers of the product thinking/intending. What is the rationale to accumulate CV? Is my question clear? I wonder if originally, maybe 100 years ago, it started out as a savings program with a DB in case you did not reach your savings goal when you died.

4. Which came first, term or WL?

5. If I may ask your further indulgence, would you mind describing the top two or three ideal candidates or scenarios for WL.

I guess I really ask, because I see it kind of like a "vanilla" flavored product (I don't know if that makes sense. You walk into a Baskin Robbins and one is attracted by all the other ice cream with fancy names and colors but by golly, vanilla sells and it is fundamental to the industry).
Further, I am not that impressed with the buildup of CV. As I said earlier, one better start when one is awful young. But then an advantage is the predictable premium that one can just pay on auto-pilot; takes no work, no monitoring, no thought. No slight intended, those are good things. If one buys insurance, they want a sure thing (or at least should have it available) they do not need to take risks wondering if they will be able to afford the COI in 10 years or how much the minimum premium will be next year to keep the policy in force.


Anyway, since I see it as a plain Jane vanilla product and you are so enthusastic about it (and are the professional) I obviously do not appreciate all the subtleties, attributes, and benefits of it.

Thanks James.

Excellent questions, I doubt if I could answer with any real significance without taking some time to respond in earnest. I would start with this, W/L was around before Term and that the Insurance Contract was an investment in the Insurance Company more on a Social/Economic Scale than today. Back a hundred years ago the economy was base more on small business that was driven locally with little State or Federal regulation and the ability for an average citizen to invest was more limited than today, extremely so. The W/L contract predates US Steel and Standard which is the first Huge Corp. that we see in the US or in some ways the World and there was no good way for one to invest outside of the local market or place of birth. Now we fast forward over a hundred years and we have without a question the fastest growing social engineering changes that the human race has ever seen and we all are right smack in the middle of it, you are living in historical times.

So the question is does W/L still fit in? Since the changes we are talking about began with the birth of the Industrial Revolution and the Social Changes since the early 18th Century but in earnest I would argue that in America and we are for the most part generations ahead of other Nations in Social Changes that it has not been since after WWII that the major change of investments came to the Middle Class, well I would argue since the 60's or about 40 years. Man doesn't change that much in 40 years and most people have basically the same financial mentallity that our grandparents had. So I would suggest the W/L Contract, CD and/or Bonds today are still what most are comfortable with. Now is this a good thing? That is for more educated people than you'll find on this board but we all have opinions. For one I don't think today's financial market ideas pushed by many are "population friendly".

Lets take GM for instance, once a World Icon (in the fities and early sixties), thee World Icon as far as business went. It alone was the lone Corporations that Nations stood and took notice if they took a dump. Fast forward 40 years and we see the problems now with GM and their likely rocky road ahead as they dig out from a debacle that has been in the works since the 50's. Now I imagine every company is like that, I don't think Microsoft will be all that much ahead if we fast forward 40 years. Now some want to put the idea of "Retirement Funding" strictly on the back of Private Companies/Corporations? I for one am thinking this might be a bit much if we desire to stay a free social and free economic base society. Today I see a rather Facsist set of ideas coming from all political parties, why? Because large Business is becoming so entangle with our everyday needs now including retirement funding which is quite personal to many. Go back before WWII and most retirement circle around the family not Wall Street and our retirement agenda has change and for the most part is new if we consider the idea of Middle Class retirement.

[marcircus]

James,

Thanks so very much for your response. You put alot of things into perspective. Some of the sites I hit on with Google, had introductions to life insurance describing how it has existed for thousands of years since at least the early Romans.

Apparently people would band together for mutual financial protection such as a guild, and contribute to a fund to pay death benefits. As the funds grew with time and if invested wisely, the survivors did pretty well.

So, now I can see a rationale for the existence of WL and your comment about how it was one of the few things you could invest in 100 years ago explains another phenomenon quite nicely: mutual companies.

So, you have early groups banding together for financial security (mutually owned companies), their investments grow (WL-CV), and it is one of the few things to invest in besides railroads and presto, the modern day insurance company is formed. Thanks so much.

I really enjoy your editorials, views, and opinions. I always learn something from you.

Thanks!

[James]

The first Annuity predates Rome, I believe it was the Babylon's that first started a Annuity system. The first true banking system was first witness with the Knights of the Templar, they had what was called "Chits" (?), and they could use them like checks at any House of Templar that were spread across all of Europe down into the Middle East. This freed them from having to carry large amounts of cash which were a part of the envy by the French Royality and the Church which lead to the deaths of most of the Knights not to mention their political power was growing at an alarming rate, well at least according to the Government and Church.

[healthagent]

James, your knowledge of history is nothing less than stunning. Do you have a formal background in history or are you just a very avid book reader?

[sman]

Originally Posted by James

Now some want to put the idea of "Retirement Funding" strictly on the back of Private Companies/Corporations? I for one am thinking this might be a bit much if we desire to stay a free social and free economic base society. Today I see a rather Facsist set of ideas coming from all political parties, why? Because large Business is becoming so entangle with our everyday needs now including retirement funding which is quite personal to many. Go back before WWII and most retirement circle around the family not Wall Street and our retirement agenda has change and for the most part is new if we consider the idea of Middle Class retirement.

James,

Are you saying you're against investing in the markets for retirement?