There are a lot of women out there who pay attention to the advice that comes from the Oprah show and when it comes to finances, it’s Suze Orman. Run from this woman if she tries to give you life insurance advice.
As a life insurance professional I found it disturbing that anyone would allow Suze Orman life insurance advice to reach a national audience. Her advice is dangerously generic and her grasp of product knowledge, well, certainly wouldn’t get her an insurance license.
With broad statements like “the only type you need is term insurance” and “you might buy a 25-year term policy” really show her ignorance. While term insurance does fit most needs, Suze needs to understand that she is advising women of all ages and needs. One size does not fit all and if she knew her products, she would know that there are only about 5 companies out of 2000 in the US that sell a 25 year term and it is disproportionately priced between 20 and 30 year products, making it a terrible deal compared to either. A woman would be better off buying a 30 year term and dropping it after 25 if she doesn’t need it. If she happens to have another child, that extra 5 years will be a great deal.
Then Suze Orman uses her bully pulpit to suggest that people look for their life insurance from selectquote.com. Selectquote is a huge mega life insurance sweatshop that pushes clients toward the companies that give them the best contracts, not the companies that will provide clients the best value. They have also made themselves infamous for having the same commercial on national television for the past 5 years suggesting that a couple with two toddlers buy 10 year term products. It’s a bait and switch commercial. Anyone with toddlers that buys less than a 20 year term is getting horrible advice.
With Oprah spending tons of money to educate children in Africa, you would think she would make a better effort to provide accurate, useable information to the women who look to her for advice right here at home.
Bottom line. The kind of generic, cute advice that comes from talk shows should be reviewed by talking the information over with a professional.
My 20 years of experience give me the knowledge and leverage to find reasonably-priced life insurance for people who have been declined or are paying more than they need to.
This doesn’t begin to address the issues I have with Orman. I have yet to hear anything from Orman that doesn’t fall into one of these categories:
1. Advice that one would hear from virtually any advisor
2. Advice that may be true for most people most of the time, but could be financial devastating if applied to the wrong situation
3. Advice that is just plain wrong.
And life insurance is probably her weakest area. Anyone who suggests that there’s no place for permanent life insurance has a poor grasp of basic financial concepts.
Rob,
After reading through your comments again, I think as an editor I would suggest you remove 1 and 2. Number 3 is right on the money.
#1 I would accept if amended to 99+% of all advisors.
#2 I really had a problem with. Her advice is so generic that it is hard to pin down whether it would be applicable for most of the people most of the time, some of the people most of the time, most of the people some of the time or some of the people some of the time.
Thanks for your comments.
First of all, I used selectquote to shop for insurance and according to their website AND the agent, “To ensure that you receive impartial advice and get the right coverage, we do not tell our agents the details of the insurance company compensation programs, and we do not rank or present our insurance companies or their products based on compensation. Our sales representatives’ recommendations will never be influenced by any differences in commissions or other compensation offered by the different insurers we represent.”
Also, they are not a broker, they are an independant sales agency. Brokers work for the client, ISA’s work for the company.
I have small children and in my case a 10 year term WAS the right thing for me because in 10 years, my children’s college will be taken care of and Imy estate will be established to the point that I don’t need insurance.
Do your research before expressing your opinion.
I even wonder if MY view will show up on your site or do you only post opinions that agree with your own?
I’m glad someone out there is passionate about Suze and Selectquote. In case you missed it, I’m not. While I’m sure there’s no convincing you, my opinions are not based on what SEO result I can get. If someone happens to find me when they search for Suze and Selectquote, well, they might just find both sides of the stories.
My opinions are based on knowing the industry I work in and caring enough about the industry to share that knowledge rather than just look the other way. My opinions are formed from years of helping clients who have been given bad advice elsewhere.
Just an fyi. Rob up there didn’t even offer real contact information. At least when I voice my opinion I’m reachable.
I JUST WANTED TO KNOW…ARE YOU A WHOLE LIFE AGENT…OR DO YOU OWN A COMPANY THAT DOES SELL WHOLE LIFE INSURANCE??THANK YOU VERY MUCH. THAT WAY I TOTALLY SEE YOUR POINT.
I AM 32 YRS OLD, HEALTHY, NON SMOKER, MARRIED WOMAN WITH 2 LITTLE KIDS (3, AND 5 YRS OLD), AND A MORTGAGE TO PAY OF $212,000, IN ORDER TO BE PROPERLY PROTECTED I NEED AT LEAST 650,000 ON EACH( ME AND MY HUSBAND…)BUT A WHOLE LIFE QUOTE IS TOO HIGH AROUND $700 TO $900 A MONTH, BUT IS VERY AFFORDABLE WITH MY 30 YR TERM BECAUSE IS ONLY $110. GUESS WHAT, IF SOMETHING HAPPENS…THE PURPOSE OF MY LIFE INSURANCE WHICH IS “INCOME PROTECTION FOR MY FINANCIAL DEPENDENTS( MY ADORABLE KIDS” WILL BE FULLFILLED. BY THE WAY I AM INVESTING THE DIFFERENCE IN MUTUAL FUNDS. GOT SOME GREAT ADVISE FROM SUZE ORMAN 9SHE ROCKS!!) AND ALSO ANOTHER MEN THAT ARE REALLY FINANCIAL EXPERTS.
Cale,
Taking exception to Suze’s lack of understanding of whole life doesn’t mean I am a whole life agent. I don’t sell, haven’t sold and won’t sell whole life.
My point is that if you are going to hold yourself out as an “advisor” then you should be familiar with the products that you are providing advise for and against. Suze Orman does not meet that threshold.
Whether it be life insurance or any other financial topic, I often wonder how completely uninformed someone has to be to find Ortman’ ‘advice’ helpfiul. Typcially basic and superficial, she uses volume to mask lack of content. It’s entertainment.
Cale, I’m presuming that your question was directed toward me because of my comments about Suze’s attitudes toward permanent life products. First of all, let me answer your direct question: No, I’m not a whole life salesman; I’m not a salesman at all. What I am is a financial planner. I don’t “sell” insurance any more than a physician “sells” medicine. Like the doctor, I make a nice living operating on the premise that the well-being of my client is my only motivation. I am as content with a smile of satisfaction and a handshake from my client as I am a $2,000 commission. My point was not to imply that permanent life insurance is “better.” It’s not better; it’s different. It’s the worst option for some, and the best option for others.
Take my own life insurance portfolio. While I won’t get into too many specifics, it consists of $100,000 of whole life and lots of term. If I’d been younger when I reached an income level where my qualified retirement options were maxed, I would have added some variable universal to the mix. The point is, there is no good, nor bad, financial product; only good or bad for one’s specific situation. I got my whole life policy at about age 30, paid less than $10,000 in total premium before stopping, and will likely never have to pay another cent for it. My beneficiary will receive $100,000 tax-free cash when I die, whether that’s tomorrow or 60 years from now; or I can take tax-free income from it, or I can sell the policy when I no longer need it for probably about $30,000.
Rob Drury
[email protected]
Rob,
Again, I respectfully disagree. I think there are bad financial products. Products so bad that no matter what situation you throw them at, they cause damage, or at the very least unnecessary financial outlay.
Wow, Ed, You absolutely blind-sided me with this one! You’re sounding a lot like Suze here. I interpreted your original comments to suggest that Orman was inept in not recognizing the value of the vast array of life products out there, and their potential applications. That would have, of course, been correct. Apparently, I’ve mistaken you for a life insurance expert.
Wow Rob! I am so sorry I’ve disappointed you. Actually not really. You just carry on with the vast array and I will carry on to the best of my non expert ability.