Archive for August 30th, 2007
When someone exposes themselves, often the exposee really doesn’t want to see it. If someone exposed your universal life policy today, would it send you screaming into the dark.
There isn’t a week that goes by that I don’t yell at the top of my blogging lungs about the fact that millions of universal life policies that families are depending on, are doomed to fail even if you continue to pay exactly as you were told to do.
I have explained in previous posts (a lot of them), that the reason that agents sell these types of policies is simply to beat the competition on price. They never show the client the downside to the low price, or if they do, they poo-paw it off by saying how great the company is and how you can count on the current projections and not worry about the guarantees.
I have two illustrations that I would like to offer, aptly named Good UL and Bad UL, attached to this post. These illustrations are not reflective of the companies, but rather a stark look at the difference in premium and how it affects the guarantees. Both of these companies have great, guaranteed UL products. Both companies are susceptible to unscrupulous agents manipulating the numbers to have the lowest price and win the sale.
bad-ul.pdf
good-ul.pdf
Note on the bad UL, on the current or non guaranteed side, cash value and death benefits just go on and on. On the guaranteed side everything goes in the toilet after year 10. You don’t want this policy.
Note on the good UL, that while there is no cash value on the guaranteed side, it is guaranteed to have a level premium to age 100 and death benefit to age 120. You do want this policy.
Bottom line. There are more universal and whole life policies in force that fit into the “Bad UL” category than there are in the “Good UL” category. Compare what’s in these illustrations to your own policy and see if you need help.
August 30th, 2007
I guess if it’s my blog I can occasionally stray from my mission of folding back all the layers of the life insurance onion and just throw out a bizarre one.
In Eugene, Oregon recently a man was saved by his seat belt when he blacked out and ran into a parked car. Not that big a deal, right? Well, according the article in the Oregonian, he blacked out because he was choking on some fast food, and when he hit the car, his seat belt induced a Heimlich punch and he chucked the sandwich, saving his life.
Bottom line. Wear your seat belt.
August 30th, 2007
I’ve often written about the fact that smoking generally increases life insurance rates by at least 100%, all else being equal. The average is really closer to 150% to 200%. Some companies are substantially higher than that.
Life insurance underwriters don’t mince opinions about the impact that smoking has on your life expectancy. They know it increases your chances of heart disease and cancer. In a post recently I talked about prostate cancer and smoking. Even though smoking doesn’t increase your chances of getting prostate cancer, it increase dramatically the chances that the cancer will kill you.
My nephew forwarded this article from The Motley Fool recently. Titled, What Smoking Cost Me, it is written by a man who found out how seriously life insurance companies take the issue of smoking.
While most of the article is a very good lesson on the life insurance rate hazards of smoking, I take exception to the fact that this guy’s agent couldn’t find a company that would forgive his one cigarette in the past year. I understand that many companies will take that stance, but not being able to find him a company that would forgive his indiscretion…..I think a good independent agent could have done it. And then the guy chooses to give up the fight and leave his family unprotected. Double bad points for the agent.
Bottom line. Smoking has a huge impact on life insurance rates, as it should. In my experience most smokers deal with that by underinsuring themselves. So, it impact’s your health, your budget, and your family’s future.
August 30th, 2007
