Suze Orman, the queen of life insurance misinformation, has riled up the folks at MSN Money now. I thought they kind of soft peddled it a bit in their claim that she doesn’t have a clue about anything.

While MSN took exception to her ridiculous investment advice, advice that not even she follows, I will stick to what I know and once again put forth my case that Suze Orman is a life insurance idiot.

Suze Orman is just as vague and useless with her advice on life insurance as the big on line agencies she gets a kickback from to promote. She is so locked into the one size fits all mindset that, well, she truly believes anyone who makes $50,000 a year should have $1,000,000 of term insurance that will take them to age 65. Why age 65? Because she thinks everyone retires then. Why 20 times your annual income no matter what your age? Do people’s assets ever get to be part of their portfolio? I suspect, since she has milked Oprah and the American public feathering her nest to an impressive $23,000,000 (more or less), that she doesn’t really know that most people today and from now on will see 65 come and go without a retirement party.

While I agree with her that whole life insurance is a poor choice, her explanation for why kind of leaves a person wondering who in the world ever told her she could touch a microphone. “Whole life policies provide insurance for your entire life as well as a savings component, but they come with hefty commissions—up to 80 percent of your first-year premium—that are not worth it at all.” I make 80% to 90% first year commission on a term policy and that doesn’t make it a bad policy. The reason whole life is a bad deal is that it mixes your family protection with investments and we should always remember that life insurance is not a good investment and investments don’t make good life insurance. Keep it separate. Commission is not the issue!!

I read somewhere that she is somehow making around $6,000,000 a year. Taking her own advice she should purchase $120,000,000 worth of term insurance. And of course, taking her advice, never, ever buy a universal life policy to pay the estate taxes. I suppose that just goes along with all the other poor advice she gives. She has probably told her heirs to just let the government have half of the estate when she dies. Her heirs need to be be hoping her entire worth is in cash because coming up with half of it in cash in the 90 days allowed by the government will be impossible otherwise.

Bottom line. I’ll be not even Oprah follows her advice.

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