Life Insurance...... opinions.

[JOHNDEEREGN]

Hey Guys-

I have had a $750,000 policy on me that started out as whole life, after I figured out I was wasting my money on high premiums I went to my agent and asked for Term Insurance.

Well needless to say he didn't like me doing that so we switched it to Universal Whole Life or something like that, which is a life insurance/retirement fund.

Well I agreed, and my agent calls me yesterday and says "due to the crappy stock market your investments with this policy are basically in the tank and you need to come up with $711.00 next month" (which I can but why the hell should I have to fund my own policy which I am paying a monthly premium on anyway).

This is not a fly by night agent either, he is American Family and has been in the business 30 plus years. I have been with him over 15 years.

I think I have finally settled on Term and am going to change it in January sometime.

I think I want either $500,000 or $750,000 on me.
$250,000 or so on the wife,
$15,000 on each kid.

Any ideas you may have?

TIA

Ty

PS- I am 40 healthy (Blood Pressure Med) and Wife is 35 Healthy and kids are 8 and 12 and healthy as well.

I hear Dave Ramsey talk about Zander Insurance as well, anyone use them? I dang sure want a company that is legit to fund my family should God Forbid something happen to me.

 

[Bent6]

I've have 20yr level term at $1M - whole life is a waste of money. I checked with Zander a few years back but ended up getting my term policy through my local agent at Mass Mutual. It's better to get more than you need rather than just enough as the cost difference isn't that great.

 

[Gary Wells]

Ty:
Adopt me quick. J/K, Ty, but I think that is a query for your agent, and fwiw, I know nada about insurance, but just being in the biz for any given length of time doesn't guarantee soundness of anybody's principles and ethics.

 

[88ZNX]

I would agree with checking on Zander Ins. they shop alot of different compaines and give you the best rate. Whole life is a rip off. Check with Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan. and you can get a ton of info on Life Ins IMO

Jason

 

[JOHNDEEREGN]

I would agree with checking on Zander Ins. they shop alot of different compaines and give you the best rate. Whole life is a rip off. Check with Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan. and you can get a ton of info on Life Ins IMO

Jason

Thanks Jason, I listen to Dave all the time and we are starting his Program in the month of January. I ordered myself 3 of his CD's to watch for my birthday.

I will check Zander.

 

[turbofabricator]

IF you NEED Life insurance, buy the CHEAPEST. Level term is the way to go, IF it has the option of guaranteed renewable/convertable. Most are.

Whole life is plain and simple THEFT!

As an example:

You come into Turbofabricators First National Bank (TFNB) and tell me you want to open a savings account. I tell you that I will put your money in a interest bearing account at 1.3%. (sound good?...WAIT...it gets BETTER!!!) If you need a loan from my bank, I will loan you money at a very reasonable rate of 7%, and I will loan you as much money as what's in YOUR savings account. (sound good?.....WAIT.....it get's BETTER!!!!) If you die, I keep the money that is in YOUR savings account. After all, your wife didn't put anythig into the account!

Would you do business with TFNB? Why not? (What if I gave you a toaster oven? ) If you own a Whole Life policy, you are doing business EXACTLY the same way. With Whole Life (aka Cash Surrender Value Insurance Policy), you pay for THREE things:

1) Insurance (VERY expensive coverage)

2) A savings plan (the FTC found that the average return was <1.3%) and when you DIE, they DO NOT give you the savings aspect of the policy, they KEEP IT!!!! READ THAT AGAIN!!!! ...........Your spouse will NOT recieve anything except the death benefit, less any loan that you took out to send your kid to college, buy a boat.........

3) A loan plan. You can borrow what ever is in your "cash value". BUT.......if you die, they DEDUCT the amount of your existing loan from the death benefit!!!! AND you get to pay interest to borrow your OWN money!!!

You are paying for three things, but can only ever get ONE!!! Kinda like buying a pair of shoes and getting home to find only one shoe in the box (and it is missing the lace). You call them up and say "HEY!! where's my other shoe and lace?!?!" They tell you "Well, sir, that's our policy. Didn't you read the fine print?"

If any of you think I am wrong, pull out your policy and read just the first 5-6 pages. You will then reach over and grab the phone and call a DIFFERENT agent, and tell them that you want to buy a term life policy. (Do NOT drop your policy until you have a new one, though!)

Universal Life/Variable life is just a COMPLEX version of a Whole life policy.

My advice is to buy a term policy and invest your savings in a SEPARATE fund. (Mutual fund ect. NOT tied to the insurance company) DO NOT bundle the two. You LOOSE control. Most Universal Life policies have thier savings rates based on a board of directors, NOT a investment portfolio. (hence the rason your agent called to tell you that you owe MORE money!) Again, read the fine print. Most, if not all, life insurance agents NEVER go over the policy, page by page, with you when they drop it off. There is a reason they don't.

I am NOT in the insurance business, so please don't call me asking for a policy. I am also not a securities dealer either. I do have many years in both, though.
I'm sure there are a few insurance sales people on here, and sorry to rain on your parade. If you feel that I am incorrect, please scan YOUR personal policy (black out your personal info) and post the ACTUAL policy on here. I will gladly review it for you. I have NOTHING to gain in this post. Just what I have learned over the years. There are many, many great books out there that cover this info in DEATAIL. Take the time to read some of them. It will save you possibly MILLIONS of dollars.
The insurance industry is the largest industry in the world. The golden rule applies here. He with the gold, makes the rules. The life insurance industry use to be a 70 trillion dollar business. And that was MANY years ago.

I have been threatened by life insurance agents before. THAT was professional

Now......why would a agent knowingly sell you a Whole Life/Univeral Life policy? Because of ONE thing.................COMMISSIONS!!! The average agent makes MORE than 40% IF he is REAL new, low on the totem pole. Many make more than 100%. Yep......100% commission. They have to pay the money back if you cancel the policy, and they also make renewal comisions, too. Some get retention bonuses'. That's why your agent gets all out of shape if you tell them that you want to cancel your policy and buy a term policy.
They will ask you questions like: "Do you want to own your home, or do you want rent your own home?" Then they ask you "Do you want to own your insurance, or do you want to rent your insurance?" "You want to gain equity in your policy then, don't you?" "Well, if you buy term insurance, you will not gain any equity in your policy. That's like renting your house. The landlord makes all the money, and you get NOTHING!....You don't want to do THAT do you!" They will spend HOURS trying to get you to keep your policy. It gets pretty comical (or violent ) if you want to lead them on. Just ask them to show you their OWN policy, then open it, and read the fine print in their policy and ask them if THEY knew that, and if so, you don't want to deal with someone THAT "smart"
The agent stands to loose $2-3000+ on a 750K policy if you cancel it! They WILL try to talk you into keeping it. Thier commission level (%) will drop if they have a poor retention rate, too. My feeling is, WHY did the guy sell you that policy to begin with? M-O-N-E-Y, The root of all evil? 30 years of it. You make the call.

 

[JOHNDEEREGN]

I thank you VERY MUCH for the detail in this Ken, I really really do. :biggrin:

I will be applying for new term insurance on Monday! Once that is secured I will cancel the old policy.

He said I had about $3000 in C.V. on said policy, will I get that?

TIA

Ty

 

[88ZNX]

Its hard to say if you will get the exact $3k. They might put some penalty on you for closing the account but I'm not 100% sure.

Thats great to hear your going on the plan with Dave!! I sure use it and boy does it work! He says get about 10 times your annual income on life insurance but honestly I have about 1/2 that. I do agree with his plans and how to live like no one else, so later you CAN live like no one else, BUT I want to enjoy life WHILE I'm doing it too. I dont want to drive a falling apart car to save a buck when I can actually drive a little nicer car when I can afford to. But to each his own. I listen to some of the callers and think Boy do I have it good sometimes and thank the Good Lord for what I do have.

Good luck with the plan and STICK TO IT!!!

Jason

 

[Buicksx2]

Ty,

Make sure you deal with a full time agent and not the A.L. Williams types who work full time and sell life insurance part time like Amway and Avon.

 

[turbofabricator]

I thank you VERY MUCH for the detail in this Ken, I really really do. :biggrin:

I will be applying for new term insurance on Monday! Once that is secured I will cancel the old policy.

He said I had about $3000 in C.V. on said policy, will I get that?

TIA

Ty

You "should".

Be READY for his ATTACKS!!! He will NOT be happy when you cancel. You can either have fun or just hang up the phone. Again, he will try EVERYTHING to retain you. He will even say "You want TERM? Why didn't you say you wanted term? I've got term!" He will then reach into his brief case and pull a term policy out, and blow the dust off of it. He might even have to call into the home office to get help filling out the "new" forms.:biggrin:
The most important thing to remember is to READ your policy. If there is ANYTHING that you don't understand, ask the agent. If he/she sounds fishy, have them write it down and sign it. THAT will keep them on the up an up. Same with any investment proposal. Brokers can be problematic, too. (Madoff) BUT, most securities guys are under alot more strict policing. THEY can go staight to jail. Insurance guys can claim ignorance and just loose thier license.
Look at Life insurace as "renting an estate" If you already have a sizeable estate, in that you have good cash reserves, college funded, retirement funded, and living expenses paid for, then ther is NO need for any insurance. If you don't have an established estate, then rent one untill you do. It's pretty simple to look at it this way. You will also be able to realistically determine the actual amount you need. Most people are WAY under insured to let thier family continue at the same life style. Your wife may be a "hottie" and can find another "Mr. Right", but maybe she doesn't want to. I've actually heard that comment before......"My wife is good looking.......Don't you think that she can find another guy right away?" THAT comment started a BIG fight right in front of me!!
I also had a wife tell me one time, after I went through all thier investment and insurance portfolio and could save them $1,000/yr on insurance and put that savings into a good fund that projected to make them than $350,000+ MORE than their Universal life policy, she said......NO! The taxes will be TOO high on that much money! The taxes will be lower with our current plan!!!" How could I argue with THAT logic?
Good luck!

 

[JOHNDEEREGN]

Thanks Rich and Ken!

Dave (my agent) wont do that, I intimidate him LOL. I was the dumbass for the last several years just to pay it. It wasnt his fault, more mine. I just fianally woke up and said enough is enough.

If he does, I printed your initial reply (text only) and am going to hand it to him and say read this.

And just walk out and call American Family and cancel it myself, AFTER I get term locked up.

Thanks Again Guys!

Ty

 

[turbofabricator]

Thanks Rich and Ken!

Dave (my agent) wont do that, I intimidate him LOL. I was the dumbass for the last several years just to pay it. It wasnt his fault, more mine. I just fianally woke up and said enough is enough.

If he does, I printed your initial reply (text only) and am going to hand it to him and say read this.

And just walk out and call American Family and cancel it myself, AFTER I get term locked up.

Thanks Again Guys!

Ty

Well.........That would be like ME selling someone a USED flat tappet cam. I KNOW that it is a rip off, but I want to sell it because I make money doing it. Don't let your agent off the hook like that. They know what they are doing. They are making a commission, a BIG one at that. They DO have term insurance available, they all do. But the commission structure for term insurance is less (usually) than for whole life/univerasal/variable life products and because the annual premiums are MUCH less, so is their commission.

After he reads the printed page, let me know what color his face turns. Also let me know just what he says. I find it interesting to hear what agents say. I've heard alot of very comical statements.

 

[SouthernCal GN]

Hey Guys-


I think I have finally settled on Term and am going to change it in January sometime.

I think I want either $500,000 or $750,000 on me.
$250,000 or so on the wife,
$15,000 on each kid.

Any ideas you may have?

TIA

Ty

I hear Dave Ramsey talk about Zander Insurance as well, anyone use them? I dang sure want a company that is legit to fund my family should God Forbid something happen to me.

IMO you need to up your coverage- term.

I'd up you to 1M/1.5M, the wife to 500K. The coverage for the kids is fine. Your current coverages are fine for 10 years ago....

 

[JOHNDEEREGN]

IMO you need to up your coverage- term.

I'd up you to 1M/1.5M, the wife to 500K. The coverage for the kids is fine. Your current coverages are fine for 10 years ago....

I think that vary's greatly on the area of the country a person is in. I have one of the nicest houses in Central Kansas, 5 bedroom, 4 bath, Beautiful landscaped yard, 3 car garage, etc etc and paid $130,000 for it.

In Cali, Washington, Conn, NJ, that would probably be 5 times that. I am just saying my expenses here are very minimal compared to the East/West Coast.

My property taxes are $1800.00 a year.

Just curious what you based your comments off of, if something different please let me know.

Thanks,

Ty

 

[turbofabricator]

I think that vary's greatly on the area of the country a person is in. I have one of the nicest houses in Central Kansas, 5 bedroom, 4 bath, Beautiful landscaped yard, 3 car garage, etc etc and paid $130,000 for it.

In Cali, Washington, Conn, NJ, that would probably be 5 times that. I am just saying my expenses here are very minimal compared to the East/West Coast.

My property taxes are $1800.00 a year.

Just curious what you based your comments off of, if something different please let me know.

Thanks,

Ty

I think that you SHOULD increase your amount to 2.5M and make me the beneficiary.

I do agree that you need to determine exactly what you need. Have the "new" agent run a "needs analysis". They will be happy to. You are right that you need to base it upon your actual needs. Save a bunch of cash, and cancel your insurance all together. Wasted money. Matter of fact, you should HOPE that all the money you spend on term insurance is a COMPLETE waste.

 

[JOHNDEEREGN]

I think that you SHOULD increase your amount to 2.5M and make me the beneficiary.

I do agree that you need to determine exactly what you need. Have the "new" agent run a "needs analysis". They will be happy to. You are right that you need to base it upon your actual needs. Save a bunch of cash, and cancel your insurance all together. Wasted money. Matter of fact, you should HOPE that all the money you spend on term insurance is a COMPLETE waste.

I am gonna owe you a door prize before all this is said and done LOL

 

[D's 6 Turbo]

There are benefits and drawbacks to both term and permanent plans. As an owner of both plans, I view my term insurance as just that, insurance to cover my family for a specific TERM only. After that term expires, my expectations are that my financial commitments will be significantly less(kids will out of college and mortgage will be paid off). Common thought is to buy term and invest the differnce which I also believe that as well. The problem is when I'm in my mid 50's I will have other goals and buying a new term will be cost prohibitive.The purpose for me owning a permanent plan now are for my long term financial goals(wealth transfer, estate planning, leaving proceeds to charity, grandchildren, etc). Owning a PROPERLY Structured and FUNDED permanent policy(WL,UL or Variable Life) allows me the flexibilty in the future of deciding what I want to do with it(making it paid up, stopping premiums, reducing death benefit or cancelling policy alltogether). My permanent plan is an option 2 policy which means my benes. get db and cash value. I like the fact of knowing today that I will have a policy in force 40, 50 years from now at today's premium rates. Bottom line, insurance companies are for profit and make money on us whether we buy term or permanent.

 

[turbofabricator]

There are benefits and drawbacks to both term and permanent plans. As an owner of both plans, I view my term insurance as just that, insurance to cover my family for a specific TERM only. After that term expires, my expectations are that my financial commitments will be significantly less(kids will out of college and mortgage will be paid off). Common thought is to buy term and invest the differnce which I also believe that as well. The problem is when I'm in my mid 50's I will have other goals and buying a new term will be cost prohibitive.The purpose for me owning a permanent plan now are for my long term financial goals(wealth transfer, estate planning, leaving proceeds to charity, grandchildren, etc). Owning a PROPERLY Structured and FUNDED permanent policy(WL,UL or Variable Life) allows me the flexibilty in the future of deciding what I want to do with it(making it paid up, stopping premiums, reducing death benefit or cancelling policy alltogether). My permanent plan is an option 2 policy which means my benes. get db and cash value. I like the fact of knowing today that I will have a policy in force 40, 50 years from now at today's premium rates. Bottom line, insurance companies are for profit and make money on us whether we buy term or permanent.

If you find the right term policy, it WILL have a renewable clause and convertable clause or option. (most do) No need to pay the TERRIBLE premiums for a perm. policy. They are a POOR "investment". If your agent tells you differently, he is only speaking through his wallet. The ONLY reason to keep a WL/UL policy is because you have become un-insurable. The huge premiums paid into a WL/UL policy can be invested (even in a bank savings account, for example) and then use those funds to pay for the increase in premiums after your term is up. I can see no option that makes perm. policy a gain other than un-insurability. Do the math with a compound interest calculator and it will blow your mind as to how much money they are making on a WL/UL policy. Over 30 years with a 50,0000 WL policy, they will give you a check for $30,000 in cash value, while they KEEP the $900,000 they made just on interest on YOUR premiums. If you had invested the 50/m in a moderate investment vehicle, YOU would have the $300-500,000, and NOT the insurance company. THAT alone would reduce the need for insurance ALOT.
Every kid in America needs to be putting 50/m away and we would solve our SS problems. At 16 years old, it will accumulate into a HUGE fortune by age 65. Most 16 yr. olds can afford $50/m. if not, then they also need to learn another trait.........WORKING! :biggrin: If your kid is in sports and doesn't have time to work, fine, YOU do it for them. If every kid learns simple monthly investing, and the POWER of dollar cost averaging, our entire economy would be better off. GEEZE, there would even be more money to give the welfare recipients, too. 'Course the above is just MY opinion. Other folks may think differently. You be the judge of your own money. It's not mine to spend. (I'm not a Congressman )

 

[TR Custom Parts]

In Cali, Washington, Conn, NJ, that would probably be 5 times that. I am just saying my expenses here are very minimal compared to the East/West Coast.


Ty

Yeah, but we don't live in tornado alley. :biggrin: Well, actually, we did have one hit near where I work back in 1988 or so but not on the scale you guys get.

I have a pretty cool insurance agent. I street raced against his GNX a few years back. How bizarre is that??? I have had term insurance for years and was always told I was wasting money, guess not??? Have 500k on me and 250k on the wife. Also have a policy on the mortage if either of us die the house is paid off, hopefully THAT is not a scam.

 

[DailyDrifter]

Would you do business with TFNB? Why not? (What if I gave you a toaster oven? ) If you own a Whole Life policy, you are doing business EXACTLY the same way. With Whole Life (aka Cash Surrender Value Insurance Policy), you pay for THREE things:

How big is this toaster oven you speak of :biggrin: