Archive for June 2nd, 2009
I’ve never minced words about what a horrible idea life settlements are. A life settlement is when you sell the ownership of a life insurance policy on yourself for some amount of money, and they are then the owner and beneficiary when you die.
Personally my stance has always included the fact that life insurance is always underwritten taking into account the mortality risk, but no one has done a mortality study on those who have sold their life insurance policies to a third party. Yes, secretly embedded in that sentence is the idea that if someone else has a vested interest in your death and that interest gets less valuable every year, who’s to say you won’t get whacked if profits are looking a bit too slim?
Of course the life settlement folks will put our minds at ease by telling us that these policies are sold to institutions and not to individual investors. Makes me feel better. I’ll bet institutions with TARP money can afford better hit men anyway.
But off the subject a little. Then there is the really stupid idea called premium finance coupled with a life settlement. There was a really great article yesterday that explains all the fun details better than I can and also breaks the news that those clients who have done it and the brilliant agents that talked them into it are in the process of getting hosed or are getting in line at the hosing place.
Bottom line. It all comes down to a deal too good to be true. You pay almost nothing for a policy for two years and then an investor pays you handsomely to take over ownership. Free money? If it sounds too good to be true…….
June 2nd, 2009
No, no. I don’t really think I’m special. Family nickname and joke. “Ed’s done so well they named an entire school curriculum after him.” Ha Ha! Today I want to reflect on this, my 1000th post, and the journey and events of the last 2 1/2 years getting here.
I write about life insurance because I am really passionate about what I do. I believe in the product. I’ve seen the results of having it and I’ve seen the calamity of a family death in the absence of it. I’ve talked with widows in both situations and there is a common thread, they both believe in the importance of life insurance.
I’ve found that the more I write, the more opinionated I get. I used to think that you just can’t fix stupid and now I’m on a mission to do just exactly that. I truly believe that if I stand on my cyber soap box and yell long and loud enough, that even the hardest of heads out there will suffer a crack and some common sense will leak in.
I believe with all my heart that the under served life insurance clients of the world deserve the best possible service that I and my staff and the great insurance companies we work with can provide. I believe with all my heart that idiot life insurance companies that decline perfectly well controlled cases of bipolar disorder just because it’s bipolar disorder should have to disclose on their websites those impairments that they don’t want to participate in. I believe with all my heart that agents that take applications for clients with issues such as cancer history, diabetes, heart disease or depression without knowing the company underwriting stance on those issues, should have to leave the business and not come back.
We have made huge gains through this forum for the under served and no group more so than the issues of bipolar disorder and depression. Nearly every client who found us through this blog and was ultimately helped had been declined at least once. It was not uncommon for them to have been declined 2, 3 or 4 times. It is my passion to save or salvage as many people as possible from that degrading useless treatment.
I have used this forum to pound on products that are a rip off to clients sold by agents who profit greatly from those sales. I get my head ripped off occasionally, but if I give people some reason to pause and rethink what is being proposed before they buy whole life insurance or sell their term insurance policy in a life settlement or purchase any kind of policy that isn’t absolutely fully guaranteed then I’ve helped. If I can bail someone out of a crashing universal life or variable universal life before it collapses and they lose everything they were coerced into “investing” I’ve helped. If I can get someone a better rate because they and their agent didn’t know all of the options available, I’ve helped.
If I occasionally rip some heads off, it’s only because I think the life insurance buying public deserves to know. It’s true that I think Suze Orman is a life insurance idiot and it’s true that I believe Selectquote uses advertising that borders on bait and switch. It’s true that I don’t think Zander Insurance does as good a job as Dave Ramsey believes and it’s absolutely true that i don’t believe that the biggest of the online agencies give good customer service. I believe all of us old folks need to know that AARP is not where you should buy your insurance and that New York Life should be ashamed of the products they offer us through AARP. There is no reason for me to hold back on these opinions and plenty of room on the soapbox for those who have joined in the rant.
I have been zealous about educating as well as encouraging self education when it comes to personal health issues. I have shared the last years of my father’s life taken by cancer and my mother’s battle won over breast cancer in the hope that the information would be of value. If a client truly understands their health issue they will deal with it more effectively, live longer and be in a more powerful position to apply for and receive better life insurance rates.
So, for 2 1/2 years I have done my best to make sure that life insurance and the life insurance business is better understood than it was before. I have done my best to make sure the rules are posted where everyone can read them so people can make an intelligent choice as to what team they want to play on. I have done my best, as my Lord would want it, to be a servant to all I can.
Bottom line. It’s a rapidly changing landscape in the life insurance business and because of that I suspect the next 1000 posts will come quicker and provide even more crucial guidance. There is work to be done with financial times tougher and the needs for some bastion of financial stability falling not on investments or houses, but on the rock solid guarantees of life insurance.
My heartfelt gratitude to my office manager/internet translator/great friend Kyra Clark for teaching me what a blog is and encouraging me to try it. I will withhold my opinion on her advise to join the Twitter voice for a while.
June 2nd, 2009
I’m going to make up some statistics for the sake of this discussion. They may not be completely accurate, but I suspect they are close enough for government work. Do I get TARP money for saying that?
It is my belief that 75% of men don’t know what their lipid panel values are. A lipid panel would be total cholesterol, hdl, ldl, and triglycerides. I arrived at 75% because a recent study indicated that slightly less than 50% of men get annual physicals and I’m figuring the guys who do get physicals are still guys, so half of them don’t even look at the results. Quick, what is your total cholesterol, hdl and ldl?
The other reason I suspect the number of cholesterol ignorant men is high is because a surprisingly large number of them seem surprised when they take a life insurance exam and find out that they are going to have to pay a higher rate because it their cholesterol is higher or their hdl lower than the rate class they applied for will support and honestly, more than likely, higher than their doctor would condone if they would ever go see him.
So, having told it like it is I thought I would share with all of my fellow men some info from dlife.com, a diabetes support website, on how to lower your cholesterol before you go to the doctor or take an insurance exam.
Bottom line. Healthy is a good thing whether it’s for insurance or just because you might live longer. But you can’t tell how healthy you are by how you feel or look. Even if it’s just the health fair let’s work on it guys and see if we can get those percentages to where we don’t act like an endangered species.
June 2nd, 2009
When life insurance companies change rates or some features of their policies they always have a deadline for application submission to get the old rates or features.
Occasionally I get the feeling that clients may wonder if my advice to make a decision or get an application signed and returned is sales motivated or if the deadlines I am talking about are truly drop dead dates that don’t have any flexibility. I talked yesterday about West Coast Life’s just announced term insurance rate increase that will be effective June 15.
Today we received a notice of rules for the west-coast rate change. There is no ambiguity on paper applications. The decision has to be made and application signed by June 14. The signed application has to be in the home office by June 22. No exceptions.
Then I blew a cork as I read their Telelife rules. Telelife is not a route that I personally recommend for customers simply because I believe we lose a layer of expertise, but having said that, West Coast Life is giving a decided advantage to Telelife customers in that they only have to have been quoted through Telelife by June 15 and have two more months to actually perform an application. I’ve lodged a screaming bloody murder complaint with the home office and will post their response.
Having said that, the point is that when we, as agents, receive these notices, it is in our customer’s best interest that we do whatever we can to prompt them to action. One day late and you lose the rate. No exceptions.
Bottom line. We’ll be seeing a lot more of these increases over the next several months and when your agent tells you about it, it becomes a call to action that is all about your bottom line, not the agents. If they push to make sure you receive a lower rate, remember that being paid on commission they have just pushed to make less money for themselves.
June 2nd, 2009
