Stand Alone Child Life Policies

[LGilmore]

Ahh Bob... You do realize that insuring through a mutual company the face amount grows over time if you select that option.

When insuring a child, you are doing two things for the parent. You are taking care of the worst possible scenario and the best possible one at the same time. If you want them to keep the plan, it has to do both. If you are just focused on death benefit, the sale won't stick because there is no "future" there, just death.

Yea, I insured my kids cause death is a possibility, but I also made the policies for their future too. Plans are doing great returning about two and half times cash values compared to premiums and for Bob, the DB has risen over time as well above the rate of inflation.

 

[scagnt83]

You see, this is what is silly about people who insure children. What will $50,000 be worth by the time a child becomes an adult?

It's tantamount to p!ssing into the wind.

That $50k policy will be around $100k at age 45. Around $200k at age 90.
If they exercise the GIO Rider they could add on $400k in extra coverage by age 45.

That is hardly pissing into the wind. It is a final expense benefit that will keep up with inflation. If they choose to, it can become a decent sized policy once they are an adult by exercising the GIO Rider.

If you care about insurability, then get serious.

The $50k-$150k range is serious for a kid. Especially when they are guaranteed to be able to purchase more up to age 45. It is insuring not just now, but it is insuring their future insurability.

Other than that, insuring a child is insuring a financial liability. It's stupid. While the death of a child will cost you a funeral, you don't have to feed and clothe them anymore, you are financially ahead.

Tell that to someone who just lost a child.

Quick story... today at lunch I met someone who is very relevant to this discussion. His child died at 5 from lukemia. He works on commissions and he said he took around a $40k pay cut that year due to being distraught over his childs death. His wife quit her job because she was so upset and didnt work for a 2 year period... she made about $50k per year he said. That is a $140k financial loss, plus the cost of the funeral.

That might be a larger than usual example, but I have known others who it has affected more than that. Just ironic to meet someone today who has lived this scenario and would vehemently disagree with your non-licensed opinion.

 

[Robert Barney]

That $50k policy will be around $100k at age 45. Around $200k at age 90.

Give me a conservative estimate of what you think inflation will be during that time period.

 

[Justin Bilyj]

Give me a conservative estimate of what you think inflation will be during that time period.

with GIO rider attached I think it's a smart move, something is better than nothing in this world..
I once saw a top attorney fall to pieces and drink during the day because his son died prematurely, I don't remember him getting his stuff together after that...

 

[Robert Barney]

Tell that to someone who just lost a child.

Quick story... today at lunch I met someone who is very relevant to this discussion. His child died at 5 from lukemia. He works on commissions and he said he took around a $40k pay cut that year due to being distraught over his childs death. His wife quit her job because she was so upset and didnt work for a 2 year period... she made about $50k per year he said. That is a $140k financial loss, plus the cost of the funeral.

That might be a larger than usual example, but I have known others who it has affected more than that. Just ironic to meet someone today who has lived this scenario and would vehemently disagree with your non-licensed opinion.

Nice to see a "license" makes you an expert on the psychological distress facing people who lose their children. Which question was that on the exam?

I would venture to guess some people become just as distraught if they lose their favorite pet. Should we now be insuring the family dog?

I am always amazed at the excuses that agents will gin up for selling insurance for the wrong reasons to the wrong people.

What used to really p!ss me off, when I was a licensed agent and reviewing people's insurance (the crap they bought from other agents), were people spending a large amount of money insuring their children, who had insufficient coverage on themselves. And I suspect that there are many here, who continue such practices, peddling kiddy policies to moms and/or dads who don't have sufficient coverage on themselves. In the event of that income earning parent dying, that agent will have put the child and surviving parent through the financial wringer because that agent was too busy peddling a kiddy policy to properly insure the family.

Watch this video, if you dare:

https://www.youtube.com/watch?v=hR9qkhGQbyE

Consider the experience of the young widows in that story (30 years ago).

Consider the comments of the Vice President of marketing, of a large life insurance company, confronted by the fact that his agent under-insured the consumer.

 

[rousemark]

Nice to see a "license" makes you an expert on the psychological distress facing people who lose their children. Which question was that on the exam?

I would venture to guess some people become just as distraught if they lose their favorite pet. Should we now be insuring the family dog?

I am always amazed at the excuses that agents will gin up for selling insurance for the wrong reasons to the wrong people.

What used to really p!ss me off, when I was a licensed agent and reviewing people's insurance (the crap they bought from other agents), were people spending a large amount of money insuring their children, who had insufficient coverage on themselves. And I suspect that there are many here, who continue such practices, peddling kiddy policies to moms and/or dads who don't have sufficient coverage on themselves. In the event of that income earning parent dying, that agent will have put the child and surviving parent through the financial wringer because that agent was too busy peddling a kiddy policy to properly insure the family.

Watch this video, if you dare:

https://www.youtube.com/watch?v=hR9qkhGQbyE

Consider the experience of the young widows in that story (30 years ago).

Consider the comments of the Vice President of marketing, of a large life insurance company, confronted by the fact that his agent under-insured the consumer.

On the other hand, since I have lived to a ripe old age, I wish had bought WL instead of term.. I would be better off. I watched the video you posted.. Saw the claim that those dirty rotten ow sown agents are making 50% more on WL... Not if you sell the same premium amount. Then, it is almost equal but that doesn't fit with your opinion that professional agents are snake oil salesmen.

 

[Robert Barney]

with GIO rider attached I think it's a smart move, something is better than nothing in this world..
I once saw a top attorney fall to pieces and drink during the day because his son died prematurely, I don't remember him getting his stuff together after that...

You quote this question:

Give me a conservative estimate of what you think inflation will be during that time period.

Then you didn't answer it.

 

[scagnt83]

Give me a conservative estimate of what you think inflation will be during that time period.

According to the National Funeral Directors Association, the average inflation rate of a funeral over the past 15 years is in the 1.5%-3% range. And it has been on the low end of that for the past decade.

In 2013 they saw a 1.6% increase. In 2012 it was a 1.2% increase. The 80s and 90s saw larger increases of around 4%-6%.

Either way, since the national average cost for a funeral with a casket is around $8k; a $25k policy increasing at 1.5%-3% is plenty to keep up with the cost. And considering that they can purchase more in $25k increments, it will serve as a lifetime final expense policy without a problem.

 

[MW Agent]

You quote this question:

Give me a conservative estimate of what you think inflation will be during that time period.

Then you didn't answer it.

Concerned the policy's PUA's won't keep up with inflation? Keep in mind that if inflation gets higher, so do the general account returns, which should translate to higher dividend rates.

 

[scagnt83]

Nice to see a "license" makes you an expert on the psychological distress facing people who lose their children. Which question was that on the exam?

I would venture to guess some people become just as distraught if they lose their favorite pet. Should we now be insuring the family dog?

I am always amazed at the excuses that agents will gin up for selling insurance for the wrong reasons to the wrong people.

A license makes you legally able to dispense advice.
And even though you look down on CE classes since the one that you taught was crap (no surprise). I actually have seen CE classes that when they talked about insuring children you need to consider potential loss of income from the parents as well. But since you are not an actual agent, and are not required to educate yourself on proper suitability, you give totally inappropriate recommendations on a regular basis.

I assume that the video you linked to was a woman whos husband had WL and probably needed Term instead or as well. We dont know what day we will die. And agents do not control what the client decides to buy. I have had clients who needed more coverage insist on a low DB WL and nothing else. I have had clients who needed to put some permanent coverage in place insist on just Term. You (and probably the woman in the video) have no clue what the agent recommended or the choices he showed the guy or what the guy said he wanted. If you were an agent, you would know that plenty of people come to us and ask for something that doesnt expire and will pay their final expenses in old age. I can recommend they get Term along with it, and I usually do, but that does not mean that they listen. Of course, If you actually sold insurance you would know all of this already.