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 Posted: Sat Jan 16, 2010 2:50 am Post subject: About Life Insurance |
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At the age of 26 what type of life insurance policy would be best... lifetermuniversaletc.
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lifeinshelp
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| Posted: Sat Jan 16, 2010 4:34 am Post subject: |
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No where near enough information to answer this question with any degree of authority.
We'd have to get into things like...
Do you have dependents?
Do you carry any debts?
What's your marital status?
Are you carrying for someone (parent)?
This is not an exhaustive list.
Maybe the answer is you don't need any at all. Maybe the answer is you could start with some to get you off in the right direction?
There isn't a right type of life insurance for someone at a given age. |
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BNTRS
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| Posted: Sat Jan 16, 2010 2:00 pm Post subject: |
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The amount is always more important than type.
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Guest 1
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| Posted: Sat Jan 16, 2010 2:09 pm Post subject: |
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| Quote: | The amount is always more important than type.
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I tend to disagree with this statment..why?..because you don't want to get the "cheapest insurance" and have it cover almost nothing..ya know? I've seen people get Life Insurance,..the cheapest they could. Actually, I think it was just Accidental Death, this certain person got. She didn't really pay attention to what the Agent was telling her about the coverage. From what I understand, she tried to get the 'cash value', of the policy, and she was told she couldn't do that. Don't just assume every policy is the same....do some research on what you're looking for, and THEN compare the prices. |
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sdchargersfan
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| Posted: Sat Jan 16, 2010 3:01 pm Post subject: |
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Ok what do I know I sell for (deleted by mod-lori) . I sell over the phone and accidental life is one of my big products. GOOO JETTTS!!! J E T S JETS! (NO links in posts! read the TOU-at the bottom of the page)
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Guest 1
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| Posted: Sun Jan 17, 2010 12:57 am Post subject: |
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| Yeah, it doesn't follow that amount is always more important than type. Making rule of thumb statements like that shows a degree of inexperience in true practice. Nothing will always be the way to go. Of course, when you sell things over the phone, it's hard to see how things wind up. |
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BNTRS
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| Posted: Sun Jan 17, 2010 3:01 pm Post subject: |
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I don't sell accident policies over the phone. I will stand by my statement that amount is always more important than type with the caveat that I am not talking about accident policies. I'm specifically talking about policies that pay regardless of how death occurs.
If you die today, it is immaterial to your wife whether you have WL, Term, UL, VUL, IUL, etc. All that matters is the amount.
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Guest 1
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| Posted: Sun Jan 17, 2010 11:56 pm Post subject: |
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Guest 1 you couldn't be more wrong. You have to take the situation in to play. If a 26 year old buys a term policy whether it be 10,20,30 year level when it comes time of renewal and this insured is now unhealthy, they could have a problem converting to permanent. Remember I said could, because not all term policies are convertible without evidence of insurability. Therefore maybe this insured needs to have a combination of term and permanent which would not provide the highest amount possible, but protect from the unseen. Do not make statements that the amount is what matters. I think you should stick with selling your accident insurance and leave these questions for the professionals.
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Reynolds1943
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| Posted: Mon Jan 18, 2010 9:23 am Post subject: |
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BNTRS has given a most appropriate answer. The associated factors of financial responsibility to those left behind are far more important than mere age or type of policy. That's the true purpose of most life policies.
Any talk of "Accidental Death benefits" does not belong in the discussion, as this is not genuine life insurance. A true life insurance policy is generally unconcerned with the manner of death (suicide within the first one or two years depending on state law where the policy was issued, or other specific exclusions in a contract aside).
As for convertibility of a term policy, a responsible life agent should only be marketing convertible (and renewable) term. Any insurer who "upcharges" for such provisions does a disservice to its policyholders because it costs them absolutely nothing to make those features available. A renewed policy will always cost more due to age, and a converted policy will always cost more due to both age AND the fact that, aside from a Primerica term policy, conversion will be to a more costly permanent policy such as WL or UL, depending on what the insurer chooses to make available for conversions.
In either case (renewal or conversion), the insurer gets the greater cash flow it desires despite the potential risk of having to cover the occasional "uninsurable" insured -- the one who's health status would make obtaining a "new" (aka: medically underwritten) policy next to impossible.
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MaxHerr
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| Posted: Mon Jan 18, 2010 11:11 am Post subject: |
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I am not saying that things like 10 vs 20 yr vs 30 yr term are not important factors. I'm not saying that type of coverage isn't important. All that I'm saying is that amount of coverage is more important than type of insurance.
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Guest 1
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| Posted: Mon Jan 18, 2010 2:51 pm Post subject: |
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You sound like an A.L. Williams guy! An individual can have 1 million in death benefit but if the product makes itself unaffordable at a later date (when the insured needs it most) what good is it? You have to have three factors, affordability and highest insurance amount, and a suitable product. I know, accident policies would have the highest death benefit for the cost of insurance but the product is worthless if you do not die of an accident. You need to get over selling that product. Sell real products that payoff on death for any reason.
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Reynolds1943
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| Posted: Mon Jan 18, 2010 6:25 pm Post subject: |
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Guest1,
I understand your point that if I'm middle age with wife and kids and I die they don't much care what type of policy I had and the add benefits of having say WL or UL over term won't matter much at that point. From the stand point that you could die tomorrow it is often the case that death benefit amount is more important than type of policy from a very broad stand point of say term premium vs. WL premium.
We have to qualify what "more important" means.
Ultimately, it's what's important to the client. I've been in the fight a few times with people who refuse to buy term insurance because they don't want to live with the possibility that they might never "collect" on the policy. I've walked away with a permanent policy paid for. They view being underinsured from my point of view as unimportant. I looked at it as they are at least better off than they were before.
Take a final expense scenario into consideration. Maybe the client would be better off buying UL because they could get a larger death benefit than WL, and that larger death benefit would more appropriately address their needs. Problem is the funding requirements for the policy might leave them without any insurance, or SGUL's might leave them with a smaller death benefit than they paid in premiums if they live too long. We have to keep tomorrow in mind, and with that, death benefit will not always be the most important variable in the equation. |
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BNTRS
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| Posted: Mon Jan 18, 2010 6:29 pm Post subject: |
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Maxherr,
Are you suggesting that for an insurance company to charge for a longer conversion period on a term policy is bad and not good for the client?
I'm going to disagree with this if this is your stance. There needs to be some hedge on the behalf of the insurance company to guarantee insurability of a permanent policy in the face of declining health. I agree that some seem to charge a hefty sum for the ability of conversion for the entire length of the term product, but I'd like to know of a company that doesn't "charge" for it and what their term rates are. |
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BNTRS
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| Posted: Sun Jan 24, 2010 5:29 am Post subject: |
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| Quote: | | Are you suggesting that for an insurance company to charge for a longer conversion period on a term policy is bad and not good for the client? |
No . . . I'm not saying this at all. What I'm saying is that the insurance company just doesn't need to charge to include a conversion privilege at all. Just like they don't need to charge for a renewal provision.
They can choose to limit conversion to years 5-10 or 5-15 of a 20 year term policy if they are concerned about the future health of the insured. But the heart of the matter is simple, do they want the insured to convert from term to WL/UL or not?
Of course they do. Means more money (cash flow) by virtue of age alone -- and we gotta fill the CV by age 121, so that bumps up the premium, too.
Actuarily speaking, obviously the ones who are more likely to want to convert are those who now have health challenges, and might not be insurable at Table XVI rates. But does the insurer really care? I don't think so, they've got plenty of business going with young, healthy people. It's no different than issuing a $1,000,000 UL policy on Joe Studly at age 25, and he breaks his neck snow boarding the next weekend. The company pays the claim, and life goes on, and premium dollars keep coming in from the living.
I don't think I've ever seen any stats on how many term policies actually convert, and of those that do, how many survive to the death of the insured. The actuaries know the answer, though.
But I'd be willing to bet that 90% of the extra money insurers charge for their term conversion privileges is pure profit and has absolutely nothing to do with the cost of adverse selection. The 10% covers the cost of the actuaries who know the answer.
| Quote: | | Ultimately, it's what's important to the client. I've been in the fight a few times with people who refuse to buy term insurance because they don't want to live with the possibility that they might never "collect" on the policy. I've walked away with a permanent policy paid for. They view being underinsured from my point of view as unimportant. I looked at it as they are at least better off than they were before. |
Can't say it better than that. You know . . . I know . . . even the client probably knows it's the wrong amount. But the client got "what they wanted" and that's just as important -- the good news is, if they do die soon, at least the beneficiary will get more than what they would have gotten if we had never taken the app.
Funny thing is, I've never had a client say, "You know, I'd rather have an auto insurance policy that gives me a new car in ten years," or "I'd prefer that medical insurance that pays for an operation, even if I don't need one, if I haven't been hosiptalized in ten years." It's only in life insurance that people seem to think "they should get something back". My hat's off to the marketing genius that first said, "Let's tell 'em they get the money even if they don't die -- we'll just make 'em wait till they're 100."
I think his name was Alzheimer -- but I can't remember.
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MaxHerr
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| Posted: Mon Jan 25, 2010 12:50 am Post subject: |
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I once told at&t they should let me use my rollover minutes to pay for my bill, making an analogy to whole life insurance, they didn't get it, and of course weren't open to the idea.
I'm still quite surprised by what seems to be the suggestion that the charge for making a policy convertable is unneccessary. There's definitely a risk involved, and I've witnessed a nervousness at several top insurers over issuing policies to elderly people. The example of the 20 something breaking his neck would likely be explained away by the insurance industry as something they know is highly unlikely.
Although, to give one piece of credit to your view, I suppose we could argue that converted policies later in life will have a higher potential lapse rate, since they are not filled with large amounts of cash and premium loans and/or dividend offsets won't be available to preserve them. |
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BNTRS
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