I want to TALK about LIFE INSURANCE.

[Scanner]

I agree with DisneySteve and Sweeps here.

It sounds like you are a budding salesperson, Lucky. . .and let me give you some advice.

If you are going to target the uninformed and unmotivated on finances, then go about what you are saying and beleiving the way you are. Don't change a thing. I am sure managers and meetings have filled your head with this.

Unfortunately, sales managers often don't "change with time" and with the advent of the internet. . .the times - they are "a'changing" as they say.

If you are going to want to get clients like DisneySteve, myself, and other professionals here, you are going to have to attack us differently.

Term insurance has an important role in a good financial plan.

Universal and whole life may (<------ operative word, may) have a role in college planning and estate planning.

But to suggest we buy something just because it's cheap and efficient (and I agree - term life insurance is an amazing product - $1000's of dollars of coverage for pennies). . .or just to bequeath random relatives some dough. . .just doesn't make sense.

I find it rather puzzling actually.

Why would I want to bequeath Cousin Jeffro or Uncle Billy Bob anything?

It's like suggesting I buy something I don't need at the dollar store just because it's cheap.

I had a disability insurance salesman cold call me the other day. Disability is a product I could actually use. . .but unfortunately, the hours I put in on my business are under 30 per week immediately disqualifying me (no part-time policies). Trying to salvage a sale from a lead, he asked if he could handle my investments.

While I admire his brevity for asking that question of someone I don't know from a common criminal. . .what a large leap. . .from selling an insurance product to advising me on my financial plan.

I politely told him all of my investments are with Charles Schwab, a discount brokerage and wished him luck.

I wish you luck too.

[sweeps]

Loved your comment, Scanner.

When all you have is a hammer, everything is a nail. Lucky's hammer is universal life insurance.

Seriously though -- I think this is a good thing. I think it's better for people to see the pitch here and discuss the flaws in it, rather than being forced into a high pressure sales pitch at home.

[disneysteve]

Originally Posted by sweeps

I think it's better for people to see the pitch here and discuss the flaws in it, rather than being forced into a high pressure sales pitch at home.

Don't EVER, EVER, EVER invite an insurance agent to come to your home to discuss your insurance "needs". That is a recipe for disaster. By the time they're done, you'll be ready to sign anything just to get them to leave.

If you want to meet with an agent, go to the agent's office so that if you don't like what you're hearing, you can get up and walk out.

[JimInOK]

Originally Posted by disneysteve

If a single adult dies, what happens to his debts? If John Doe owes money on a credit card in his name only, what happens when he dies? Can the credit card company go after John Doe's parents to pay that bill? I don't believe so but maybe I'm wrong. Same question for personal loans and hospital bills. As for a mortgage, that would be repaid by the proceeds of the sale of the property.

The only argument that makes sense to me is burial expenses, but all that requires is a minimal policy of about $10,000. And that's only if the family doesn't have any savings to cover an expense like that on their own.

I agree that there is no one-size-fits-all answer. It depends on the situation. I just think selling insurance as an investment product isn't such a great idea. I also think a lot of people are convinced into buying insurance out of fear rather than out of logic and solid financial planning.

It's not only a bad idea (for an actual agent) to pitch insurance as an investment product, it's actually illegal. That tells me all I need to know about whether or not it's a sound "investment."

[Joan.of.the.Arch]

Tripod, if you are recommending that people have life insurance in order to pay off debts when they die, that would mean that we would have to name our own estate as the beneficiary of the insurance. Leaving it to our parent, or brother, or cousin, or best friend does nothing to get the bills paid. Those people have no obligation to pay your bills. Of course, in most cases, our spouses do have legal obligation to pay our bills.

But if you think it is so important to pay your bills after you are dead, then it seems to me that the amount of life insurance you have should be a fundamental limit on the debt you take on. Want to finance a car whose resale value is going to decline faster than you pay off the debt? Make sure to increase your life insurance before making the purchase. (!?!?) Thinking of allowing a credit card issuer to increase your available credit? Better up the life insurance accordingly, just in case you actually use that credit. (!?!?)

Besides, if your estate --aside from life insurance-- has enough value, your estate will pay your bills when your are dead.

[tripods68]

Originally Posted by disneysteve

That's where we fundamentally disagree. Unless I was currently supporting all of those people, I wouldn't feel the need to give them money when I die? I have insurance to cover those who I do support - my wife and my daughter and that's it.

Steve--This long standing fundamental view held by many here. I like to expand this just a bit more and to make my point. This is my last comment on this issue.

While I may not share the view completely, this is exactly what’s wrong with “nuclear” family in general. The US in general stands for liberty and opportunity. Immigrants flock into this country for greater postures as my parents did many decades ago. We’re number one in charity giving and foreign aids to many countries. We go to war against other nation to protect our own self-interest like oils in Iraq. Yet we don’t seem provide enough relief to our own families instead we pass it on to others to pay for. Why is that? Its one thing to provide support to our own husband/wife and kids, so say we don’t care about mom and dad, brother, sister, nephew or nieces who are struggling financially themselves perhaps. It’s ironic. To say “I won’t provide them my own means of ‘thank you for raising me’ now that I’m gone…'screw you'! There is just something fundamentally cruel about this view and no matter how unintentional we are financially, limiting support only to immediate family members is missing the most important view IMO, taking care of your own family members not just your “own” helps. Those especially in needs.

Sorry about being off topic. Off to my 1:30 meeting

[Scanner]

If my sister is struggling financially, I am not sure where you feel Americans are lacking in some core family value in that she should profit from my untimely death.

I'm sorry. . .while I am normally one to participate in questioning the status quo. . .I just don't get it.

I kind of know what you are saying - if the Fraternal Order of Police calls for a $50 donation telemarketing . . .apparently there are enough people who will part with their money, yet. . .maybe not help their grandchildren out with college.

Maybe that is peculiar that people put charity before family in America whereas perhaps China or India, the family clusters all finanical wealth.

But my sister wouldn't have any obligation to bury or cremate me or satisfy my debts. That would be born upon my wife and kids without having a father.

Another stat while we are throwing some around - America is the most overinsured nation out there.

We have travel insurance, accident insurance, whole life insurance, furniture extended warranties, yet. . .we are lacking insurance in health and disability as a whole, having that fall to Medicaid/Medicare and SSI.

Essentially the insurance industry wants to sell us stuff we don't really need and the stuff we really do need. . .well. . .they don't do such a good job of administering.

EDIT: BTW, I am just as guilty of being overinsured. When buying a piece of jewelry for wife, being a typical guy, I have gotten rooked into insuring the necklace for an extra $19.00 or whatever. Insurance unfortunately is a sales driven industry vs. needs driven.

[JimInOK]

Originally Posted by Scanner

If my sister is struggling financially, I am not sure where you feel Americans are lacking in some core family value in that she should profit from my untimely death.

I'm sorry. . .while I am normally one to participate in questioning the status quo. . .I just don't get it.

I kind of know what you are saying - if the Fraternal Order of Police calls for a $50 donation telemarketing . . .apparently there are enough people who will part with their money, yet. . .maybe not help their grandchildren out with college.

Maybe that is peculiar that people put charity before family in America whereas perhaps China or India, the family clusters all finanical wealth.

But my sister wouldn't have any obligation to bury or cremate me or satisfy my debts. That would be born upon my wife and kids without having a father.

Another stat while we are throwing some around - America is the most overinsured nation out there.

We have travel insurance, accident insurance, whole life insurance, furniture extended warranties, yet. . .we are lacking insurance in health and disability as a whole, having that fall to Medicaid/Medicare and SSI.

Essentially the insurance industry wants to sell us stuff we don't really need and the stuff we really do need. . .well. . .they don't do such a good job of administering.

Being a former accountant for an insurance company, the reasoning behind the part of your quote that I bolded can partially be explained by potential liability (partially, not totally). Health & disability are open-ended on the claims side (with disability claims particularly having the potential to hang on for years and years) while the others you listed are much more defined. Granted, reinsurance mitigates some of the loss potential, but reinsurance on these lines is also expensive.

[Scanner]

JIMINOK,

I don't disagree with you at all. . .it's kind of why a lot of insurance is just a failed concept (yet in a way, makes America go around being the largest lobbying group on Capitol Hill).

You get insurance to protect from catastrophes.

The major catastrophes that a person will likely suffer are loss of health and/or disability. Those catastrophic events are hard to insure (for whatever reason) and probably while ultimately we should just fire the co.'s in business and make it a welfare state.

If industry was doing a good job, that'd be another story.

Term life insurance is an exception to the rule - for pennies, you get $1000's in coverage.

With health and disability, for $1000's, you get pennies in coverage.

[cptacek]

Can someone please define term life insurance, whole life insurance, universal life insurance, etc.,?

[LuckyJB]

Originally Posted by Scanner

I agree with DisneySteve and Sweeps here.

It sounds like you are a budding salesperson, Lucky. . .and let me give you some advice.

If you are going to target the uninformed and unmotivated on finances, then go about what you are saying and beleiving the way you are. Don't change a thing. I am sure managers and meetings have filled your head with this.

Unfortunately, sales managers often don't "change with time" and with the advent of the internet. . .the times - they are "a'changing" as they say.

If you are going to want to get clients like DisneySteve, myself, and other professionals here, you are going to have to attack us differently.

Term insurance has an important role in a good financial plan.

Universal and whole life may (<------ operative word, may) have a role in college planning and estate planning.

But to suggest we buy something just because it's cheap and efficient (and I agree - term life insurance is an amazing product - $1000's of dollars of coverage for pennies). . .or just to bequeath random relatives some dough. . .just doesn't make sense.

I find it rather puzzling actually.

Why would I want to bequeath Cousin Jeffro or Uncle Billy Bob anything?

It's like suggesting I buy something I don't need at the dollar store just because it's cheap.

I had a disability insurance salesman cold call me the other day. Disability is a product I could actually use. . .but unfortunately, the hours I put in on my business are under 30 per week immediately disqualifying me (no part-time policies). Trying to salvage a sale from a lead, he asked if he could handle my investments.

While I admire his brevity for asking that question of someone I don't know from a common criminal. . .what a large leap. . .from selling an insurance product to advising me on my financial plan.

I politely told him all of my investments are with Charles Schwab, a discount brokerage and wished him luck.

I wish you luck too.

Not looking for anything..just advice and opinions. But thanks.

[sweeps]

Originally Posted by cptacek

Can someone please define term life insurance, whole life insurance, universal life insurance, etc.,?

Wikipedia offers a good explanation.

[marla]

I thought life insurance was in case you dies and needed to provide for your family. How can it be an investment if you are already dead? Don't people invest money so they can use it to enjoy while they are alive?

[disneysteve]

Originally Posted by marla

I thought life insurance was in case you dies and needed to provide for your family. How can it be an investment if you are already dead? Don't people invest money so they can use it to enjoy while they are alive?

Life insurance IS NOT an investment, but what the agents sell you on is the cash value of whole life policies. Part of your premium pays for the death benefit and part goes into an account and builds up over time. You can draw on that money while you're alive or, after you die, it gets added to the death benefit.

[LuckyJB]

Originally Posted by disneysteve

Life insurance IS NOT an investment, but what the agents sell you on is the cash value of whole life policies. Part of your premium pays for the death benefit and part goes into an account and builds up over time. You can draw on that money while you're alive or, after you die, it gets added to the death benefit.

Ya thats what I do with my insurance....