TheHobster:
So when the chance to renew ends at 70, 75 or 80, what do they now have? When the renewability cost gets too high, what do they have? when they need to utilize the cash value for an emergency, what do they have - in an ideal world where people don't overspend, your Primerica philosophy would work; in the real world it doesn't
Term has it's place, but in my 17 years in the business, I have RARELY come across anyone that needs term only. Especially in the demographics of SCUBA divers; there is a need for virtually everyone for a minimum amount of permanent life insurance. But, this is the same type of discussion many have regarding buying at the LDS vs internet; it's price vs quality. I opt for quality as much as possible.
Spoken like a true insurance agent. This forum is neither the place, nor the space to get into this
fftopic: , but;
A "permanent" policy is simply a term policy with an attached saving or investment account. That account is very expensive compared to the alternatives. Forcing a savings program at below-market rates and triple normal transaction costs and commissions is not an improvement.
People buy the equivalent of term life for every other insurance they buy: Homeowners insurance is "pure insurance," as is medical and certainly auto insurance. You insure the home and vehicle only, but only with "permanent" or "cash value" life insurance do they buy the insurance, and make the mortgage payment together. For that matter, since they are dissimilar products, why not require life insurance and grocery payments with the same check? After all, food sustains life, doesn't it?
You are right, people need investments and savings. But the cash value builds up much more slowly with the insurance policy, than if the excess were simply invested in a basic bank account, much less a diversified mutual fund, the cash value would build much faster than in a life policy. And, the excess of higher premiums now much more than makes up for additional premiums to renew at age 75 or 80. Wow! I hope that I am around to invest at age 80, but fact is if a person needs life insurance at age 80 (because they have not saved, invested, or built any assets by then) they probably can't afford cash value life insurance now, especially not the excess premiums it would take to build cash value. As for the "scuba diving demographic," do we see a lot of scuba diving 80-year olds that need life insurance?
By the way, don't start with the
quality vs. quantity argument. Quality in insurance has nothing to do with bundling the investment and insurance product, any more than adding options to a car like fancier radios increases quality of the car. "Quality" in insurance comes from the financial stability of the underlying issuing company, and the customer service provided by them. Neither of which differs from the
type of policy being considered. They are both sold by the same agents, from the same issuers. The
LDS vs internet analogy doesn't apply unless your LDS is also an internet seller...
And, I always get a kick out of the "in my 17 years in the business" argument, like that implies correct thinking. I was first licensed in the insurance business in 1981. Do the math. In 17 years, if
all you recommend as an agent is cash value life insurance, chances are you
will "have RARELY come across anyone that needs term only." I don't debate that. Insurance is most often a product
sold, not
bought.
All I said was "I'm not saying that 'permanent' (i.e. not 'term') life insurance is a bad thing for him, but without knowing more, there is no way you can say it is good," and "You really cannot recommend that without knowing more about a person's situation."
BD
