Is Final Expense a Ripoff?

[AboutThatLife]

Do you think you are selling the customers a good deal or would they be better off saving the small face amounts themselves and self insuring?

 

[DayTimer]

Do you think you are selling the customers a good deal or would they be better off saving the small face amounts themselves and self insuring?

First problem with self-insuring is that in the first months and years, the individual will be woefully underinsured; but if instead he or she was paying the same premium to the carrier, the individual would be fully insured from day one.

But the second and larger problem is this: If he or she hasn't saved even a dollar up to this point in life, what chance is there, realistically, that such an individual will suddenly "find discipline" and start a savings program now?

I think we are unequivocally helping these people.

 

[dtfe]

Lol for starters, insurance covers them far far far sooner than any savings account will.

However, that is a completely moot point. 99.8% of them will not ever ever ever actually save the money. It's just not going to happen.

Therefore, even if they were better off (which they aren't), the fact that they won't do it makes this dialogue totally unnecessary.

 

[KRobby]

Do you think you are selling the customers a good deal or would they be better off saving the small face amounts themselves and self insuring?

Just like all insurance, the better deal is to self insure if it's viable, and can comfortably and willingly afford the cost tomorrow. It's why we use a max income filter for DM cards for the small face value policies, they can't.

I had the same thoughts when I got into this racket, won't take long until you seem some genuine appreciation for your work. They have no options to mitigate this risk.

 

[BYSFG]

Remember the whole, buy term, invest the difference? What percent invested the difference and "made it big"?

Self insuring is not for the majority.

 

[John Galt]

Damn, almost a whole thread with everyone getting thumbs up.

 

[ajmiller]

^^^^this is why I love this place^^^^

 

[AboutThatLife]

Just like all insurance, the better deal is to self insure if it's viable, and can comfortably and willingly afford the cost tomorrow. It's why we use a max income filter for DM cards for the small face value policies, they can't.

I had the same thoughts when I got into this racket, won't take long until you seem some genuine appreciation for your work. They have no options to mitigate this risk.

This is the biggest question to me. Some of my suspects DO have the money and they DO believe in self insurance. The Theory of Decreasing Responsibility may have merit in some areas, but the idea that it leads to self-insurance, meh.

If you have enough money to self-insure, you need insurance to protect your estate from being liquidated. If you don't really have an estate, then the money would go better in a SPWL because liquid assets will count as income to the beneficiary.

Unless there are some alternate strategies I'm missing here.

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First problem with self-insuring is that in the first months and years, the individual will be woefully underinsured; but if instead he or she was paying the same premium to the carrier, the individual would be fully insured from day one.

But the second and larger problem is this: If he or she hasn't saved even a dollar up to this point in life, what chance is there, realistically, that such an individual will suddenly "find discipline" and start a savings program now?

I think we are unequivocally helping these people.

This is a great point.

 

[Rearden]

Final expense is a rip-off to those clients who think it is.

 

[goillini52]

This is the biggest question to me. Some of my suspects DO have the money and they DO believe in self insurance. The Theory of Decreasing Responsibility may have merit in some areas, but the idea that it leads to self-insurance, meh.

If you have enough money to self-insure, you need insurance to protect your estate from being liquidated. If you don't really have an estate, then the money would go better in a SPWL because liquid assets will count as income to the beneficiary.

Unless there are some alternate strategies I'm missing here.

A jar on the counter of the Convenience Store or fund raisers like a car wash, bake sale, etc.