$500,000 20 YEAR TERM LIFE INSURANCE POLICYTop 3 Rates – sample quotes
All sample quotes shown assume #1 health class. All life insurance companies have approximately 12 health classes. Each health class has guidelines for things like height & weight, blood pressure, cholesterol, family history, etc. For example, some companies will not give you the #1 health class if your mom, dad, or sibling had cancer before age 60. Other companies will. It is important to know the details of the underwriting guidelines for each quote you are looking at. In other words, there is no sense looking at health class #1 quotes if you don’t meet the life insurance company’s health class #1 guidelines.
Quotes & Underwriting Guidelines (valid as of June 6th, 2017) are subject to change.
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11/14/2017 0 Comments Pros And Cons Of Whole Life Insurance
Buyer Beware Most agents sell off “projected returns” touting historically favorable dividends or interest rates which hark back to the pre “great recession” days when insurers (and consumers) could generate meaningful positive returns on conservative, no risk investments. Savvy consumers always weigh the pros and cons of any purchase and make decisions that best align with their objectives and circumstances. That said, it’s difficult for many consumers, particularly in the “middle income” market to sort through the clutter and resist the rosy sales presentation. Some agents have perfected their pitch to suggest the recommended whole life policy can simultaneously provide adequate death benefits, adequate emergency funds, adequate retirement income and solve world hunger (okay, maybe that last one is a stretch … but you get the point). The good news for consumers is trends seem to be changing somewhat. Some agents are now actually having a “Whole Life Insurance Rebellion” about the pitfalls of whole life insurance. This is a result of a push back / lack of consumer confidence in the product. When Not To Buy Whole Life Insurance
Whole life is a product that should not be purchased unless one is absolutely convinced their insurance need is permanent, regardless of the age they pass on. Even if that’s established, smart consumers will compare /contrast the whole life strategy with another which has a death benefit guaranteed for life – Universal Life programmed at a premium level which provides a “no lapse” guaranteed to age 121, kind of a “term for life” scenario. Most importantly, whole life should never be purchased unless the premium is comfortably affordable – and this is the biggest problem in the middle income market. Consumers in this market can rarely get the robust death benefits they need to pay off mortgages/provide income replacement/ provide for children’s higher education – all necessary in event of premature death – with a whole life product chassis . Unfortunately, many who buy into the sales pitch realize this within just a few years of policy issue and cancel the policy, suffering a huge surrender charge that consumes most all of the premium outlay. Consumers in this market are far better off purchasing adequate death benefits via term insurance with a “locked” rate for 20 years or 30 years and investing their discretionary dollars in traditional investments with low fees through discount brokers, no load index mutual funds or “robo advisors”. One can achieve the same “forced savings” element with these investment products too by signing up on a monthly bank draft basis – but can turn off the contributions at any time when /if ”life happens” without incurring any penalties. Fact is, there is a place for whole life insurance but it’s in the upper income or estate planning market. Unfortunately, there’s not enough of the 1, 5 or 10 “per centers” out there to satisfy the sales quotas of insurance agents and the profit targets of US life insurers – so the “misrepresentation” continues. Incidentally, insurers could solve part of this problem by spreading the commission paid for whole life sales over a longer time period, rather than fronting the vast majority of it out in the first year (hint: why does the surrender charge have to be so high?? ) – but that’s a topic for another article. |
