For James, AngelP, and Whole Life Fans

marcircus · 03-17-2008, 08:21 PM

Here is a link to the best "Buy Term, Invest the Difference" study I have ever seen. It Uses a WL policy that was in force for 44 years so that the internal rate of return could be derived rather than estimated.

Let's hope the link works: http://www.assurity.com/images/Whole...8_Consumer.pdf

HomeService · 03-17-2008, 11:25 PM

Tell it to Dave Ramsey. Actually, I am not only a fan of whole life, it's about the only thing most of my clients will buy. They really want a cash value, and I sell mostly 5K or 10K final expense, and while some companies sell small term policies like this, or non-cash value WL in small amounts, most of my clients want the cash value. It's been a tradition of theirs for years, handed down through the generations, the buying of WL. Can't argue with tradition.

LGilmore · 03-17-2008, 11:53 PM

Whole life.. ya can't go backwards... These days that might mean something again..no?

JMO Fan · 03-18-2008, 12:33 PM

Very interesting, mostly well done. The comparison to UL is misleading, because it apparently shows UL at guaranteed rates. Even worse, it seems to presume extra money would be invested in a taxable CD, rather than tax-deferred as additional UL premium.

UL never charges guaranteed mortality, and has consistently credited cash values at higher current rates. The guarantees in UL products are dictated by IRS rules, which make it virtually impossible for insurers to use more favorable guarantees. Cash values based upon current COIs and credited interest are a much better indication of long-term likelihood.

fjman · 03-24-2008, 04:26 PM

Great Article.

I'm not sure if they factored in the lost opportunity cost of the term in their analysis, I need to look it over again later.... If not, the WL looks even better.

For the ones that can afford WL but are stuck on "buy term and spend the difference...(lol) This and similar approachs seem to drive the point. Even if the CSV and investment route came out equal, gotta remember, you still have insurance with WL on top of account values.

schealthagent · 04-08-2008, 10:09 AM

I know that for most agents (myself included) the buy term and invest the diff erence concept is so widely accepted because it is easy to understand and shop for the client. When selling a whole life policy you are stepping into a whole new arena with so many more variables. How do you know how to find the best wl policy for a client? You cant just base it on price like term - or can you?

policy doctor · 04-08-2008, 10:41 AM

It's not that easy to find participating WL policies anymore. I believe the mutuals had the corner on these.

bobson · 04-08-2008, 10:58 AM

Originally Posted by schealthagent

When selling a whole life policy you are stepping into a whole new arena with so many more variables. How do you know how to find the best wl policy for a client? You cant just base it on price like term - or can you?

Forget finding the best policy at all when it comes to any type of life insurance. The best policy doesn't exist for term or whole life.

Do some due diligence and find one or two good mutual companies and learn their products. If you understand the beuaty of whole life insurance it really doesn't matter if you are selling NYL, Guardian, Lafeyette Life, or some others. They are all good products but you won't ever know which is the best until someone uses the policy.

Read up on whole life insurance. There are plenty of great books out there. Then find a major mutual (or mutual holding company) company you like doing business with and learn their products.