With the buying of life insurance there is too much emphasis placed on price and not enough placed on benefits. When buying Life insurance like any other thing you get what you pay for. When you buy cars, paying less for a Hyundai does not give you more or a better car than if you pay more for a Mercedes Benz.
It is extremely naive to believe that in the pricing of a product which exist since 1583, that the cheaper product is better than the more expensive one. The first thing to understand is that ALL LIFE INSURANCE PLANS ARE TERM PLANS. There are short Term plans and long Term plans. Short Term plans may be renewed or dumped at the end of the Term. When you pay less for a Term plan, it is just a reflection that the probability of you dieing at that point in time is that much less. But as soon as the probability of death increases so too will the premiums, some Term plan premium could increase by up to 12,000%. To buy a Term plan that will expire for an event that is CERTAIN to happen - death, is stupidity on stilts.
Americans have fallen into a mode where they want every thing CHEAP and EASY. As a result every TV personality, every radio host and every news paper columnist know that in order to guarantee viewer ship, listener ship and readership he just has to offer CHEAP and Easy. Life Insurance because of the way it is priced provides ready cannon fodder for any unscrupulous individual who wants to drive up his/her ratings. Every Tom, Dick and Harry regardless of how ignorant he is about Life Insurance feels he can give life insurance advice.
Americans the way you are buying life insurance is a sure recipe for disaster. Buying Term Life Insurance does NOT let you save money. It PREVENTS you from saving and instead of getting richer you are getting poorer. Numbers do not lie. Since the increased purchase of Term Life insurance the savings rate in
The practice of saving is hard. It is NOT a natural tendency of mankind to save. That is why there was limited prosperity before the development of WHOLE LIFE INSURANCE. Whole Life causes forced savings. That is why countries where the people buy large amounts of Whole life insurance are more prosperous than countries where the people do not.
The talk about investing in other vehicle at higher hoped for returns is DELUSIONAL. First of all the money is NOT saved. It is not invested it is INGESTED. Secondly higher returns exist only in theory. For Madoff to consistently pay 10% he operated a Ponzi scheme. Other money managers knew he was doing something wrong because they were not making that kind of return. The best one can hope for is about 8-10% return. A participating Whole Life can give that kind of return from about 10 years onwards. People seem to think that that time line is too long. But tell me this if you are saving for the future why do you want to realize maximum returns sooner than 10 years? The only reason you would want your money sooner is to consume it.
If you are not consuming the money and you leave it to grow very few money managers can beat Participating Whole Life after the 10th year. And Whole Life goes from strength to strength from there onwards.
Read more in my book LIFE INSURANCE - The Cause Of Economic Prosperity. Its available at www.xlibris.com or at most online bookstores. You may also visit my web site www.dorlanfrancis.com and my Blog at http://dhfken-financialanalyst.blogspot.com/
