First of all, life insurance isn't for me. I'm dead. It's for my wife and son. I have 30 year term that expires when I'm 68 - my wife will be 73 and my son will be 33. I'm trying to figure out why they would need life insurance then.
On a bad day I can destroy the returns of any perm life policy - and have been doing so.
I imagine healthagent sitting in his nursing home sucking down a cup of iced tea, not really aware of who he is. Dimentia is a terrible disease. Meanwhile his wife is writing checks for $5000 or $10,000 a month for his care. I'm sure she'll come visit a lot but when your care eats up everything you've saved, when she's sold the vacation home and the Ferrari she'll start wishing you'd at least have purchased a whole life policy so when you do finally die, maybe after 6 or 7 years she'd be able to replenish her wealth. But in your wisdom in your 40's, you had it all figured out. You were certain of your future. You knew for a fact you only needed term insurance until you were 73.
Sometimes it is what is is. I could have a horrible accident today and end up like Christopher Reeve. It's called "life."
I could also end up wrongfully convicted of a crime and be sentenced to 40 years in jail. Maybe someone needs to come out with "prison insurance."
Many whole life policies are written for situations that will probably happen, not possibly. Older people will probably died and have final expenses. While a person could go bankrupt next year if they are HNW now and are on that track then they will probably have estate taxes, not just possibly. A parent has devlopmentally disabled child who is not likely to not be disabled or high need at any time in the future. The need is probable not just a possibility. A woman wants to leave some funds to her church when she dies and has thought it through. She will probably die at some age. Others may not want to do that but she does and she is the client.
Winter
------------------------------------ Spending Our Way to Prosperity
I imagine healthagent sitting in his nursing home sucking down a cup of iced tea, not really aware of who he is. Dimentia is a terrible disease. Meanwhile his wife is writing checks for $5000 or $10,000 a month for his care. I'm sure she'll come visit a lot but when your care eats up everything you've saved, when she's sold the vacation home and the Ferrari she'll start wishing you'd at least have purchased a whole life policy so when you do finally die, maybe after 6 or 7 years she'd be able to replenish her wealth. But in your wisdom in your 40's, you had it all figured out. You were certain of your future. You knew for a fact you only needed term insurance until you were 73.
What they would need in that situation is LTC insurance. The whole-life policy would have to be cash surrendered or assigned over to Medicaid if they spent down all their assets. The term life insurance is actually exempt from that because there is no cash value.
The whole-life policy would have to be cash surrendered or assigned over to Medicaid if they spent down all their assets.
Depends. He may be able to sell his policy as part of a life settlement transaction to raise cash- especially if it is a good sized policy. In that instance the fact that he was so sick would get him a better offer.
Not saying that is automatically the way to go. Only that it is in the mix for consideration.
Exactly. Again, just imagine how protected we'd be if we handed over most of our pay to insurance companies.
It's amazing humans made it this far
Without disagreeing with that, I would add in the thought that when you deliver some death benefit checks to families you get a different perspective, or at least an additional perspective. I have been stood up and treated like dogcrap by many prospects but I can guarantee that you wont be stood up when you deliver the death benefit check or show up to do the paperwork for it. As with other types of insurance, it can be expensive to have it and also plenty expensive at times to not have it.
Agreed - but every solid agent thinks their line of insurance is necessary. And if they don't feel that they they need to get out of the biz.
However, it's common sense that we can't take the typical American and think they can afford literally 6 different insurance products.
The largest holes are obviously towards the end of life when treatment or support becomes extremely expensive and emotions and ethics smack up against reality where we have to wonder why we're keeping people alive with close to zero quality of life just because "we can."
My grandfather was diagnosed with cancer at 81 and obviously recommended all these courses of treatment. What he chose was to go home.
But I don't disagree with you. There are many horrible situations were a parent becomes disabled - due to either an accident or illness and how we see their children spending their money to provide care.
I know my parents do not have LTC or life insurance. If my father needed round-the-clock care it would be a huge issue for us (4 kids) - 2 of whom live out of state.
That said, my father has specific wishes about his quality of life and I'm going to honor that.
Car insurance
Whole life
Annuities
Disability
Ltc
Health insurance
Etc...
Man....if I spend 75% of what I make I'll be covered!
That wouldn't take 75% of your income, very likely less than ten percent if you set it up correctly. Just because health insurance takes such a big bite, it doesn't mean the other policies are that expensive.
Society will continue on if any of us become permanently disabled or we permanently maim someone else in a car accident. But our own personal economic situation will become very dire.
But when we are spending over a third of our income to service our debt, we can't expect much out of life.
I applaud all the successful folks on here but I do have a bit of a problem when some of us scoff at other types of insurance. Sure it is nice to say our product is the most important, but really all of our products form the base of our financial lives. Without a base everything comes tumbling down.
Right on.
I am a new agent but it is easy to see that we must do what is best for the client based on their goals, not based on how much commission we can bank.
Originally Posted by Winter
The need is probable not just a possibility. A woman wants to leave some funds to her church when she dies and has thought it through. She will probably die at some age. Others may not want to do that but she does and she is the client.
Yeah, mine does too. He wants a Brazilian nurse who wiil give him a good spongebath plus! every day. Hmm. How do we insure that?
Sounds like as large of a life policy as you can place on the ole boy... cause that activity will certainly cause these words to be uttered (with hand of chest): "Here comes the big one Elizabeth". (ala Redd Fox)
But what a way to go... Brazilian nurse... hmmm
Sponge bath... double hmmm.
This I am sure of. When I recommend perm over term, I'm doing the best thing for the client. That does not mean he always (can) buy it... but I never SELL term insurance. I allow the client to buy it after they have convinced me that they won't do what is in their best interest but instead do what their neighbor or friend or brother-in-law has done... which was BTITD. I've learned a long time ago "Don't fight the tape." (There is probably only 3 people in this venue who know where that saying came from... or who have ever seen "the tape"... and no it is not video tape!)
First of all, you should understand that ALL life insurance IS term. The only difference is the way the "extra" premium is invested, if in fact there is extra. Term in and by itself has no extra premium, it strictly buys life insurance. Whole Life charges more up front and builds cash value which is invested by the company who makes alot more on that investment than they give to the client! UL is a combination of the two, a hybrid.
UL was started when Art L. Williams began educating the consumer that they could get a better return on the "extra" if they would only have the discipline to invest it themselves. Unfortunatly, most people don't. This was the "Buy Term and Invest the Difference" concept. Works well if you work it. The insurance companies saw what he was doing and came up with the UL's as their answer to a better return. But they really only work if you have time to make it work. The whole idea behind the investment part of insurance is to give you time to accumalate money but cover you if you die early. If you have the accumulation, then you don't need the insurance do you? You're self insured at that point. As for "term", Mortgage insurance is an example of a need for term. When you are young, you have alot of bills and a future to cover. Therefore you need alot of insurance coverage. When you get older, presumably the kids are gone, the mortgage is paid, etc, etc, so you don't need the high protection anymore, or at least not as high.
Hopefully, maybe when you where young you took out a WL policy then and it seems like paying pennies comparitivly.
Term is a scam? Well, sounds like you've been scammed your "Whole Life" then!
Cash value life insurance is one of the most important assets of a bank, particularly America’s large banks.
Banks purchase so much cash value life insurance that life insurance of this type has its own name BOLI (bank-owned-life-insurance). Banks own so much BOLI that the banks could be considered life insurance companies unto themselves. According to the Federal Deposit Insurance Corporation (FDIC) and the General Accounting Office (GAO), BOLI is a cornerstone of a bank and one most important assets in the nation’s banking and financial systems..............
Re: Whole Life Insurance
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