Blog : Life Insurance
Life insurance is an important part of a client’s financial plan: But are they spending more than they need to?
The goal of any comprehensive financial advisor is to help protect the financial situation of their clients and their families as the client ages. The financial advisor wants to ensure that when the client retires the client and their families are fully taken care of. Life insurance is an important part of this long term financial plan—even for high net worth individuals. It covers the gap between the liabilities their family would face in the ...Read More
Why policy owners end up paying tens of thousands more than they need to Are Life Insurance Agents Making Recommendations In Their Client’s Best Interests or Their Own? For clients considering purchasing permanent life insurance, the options can be daunting. Life insurance policies address many different client desires. Understanding the many choices available—and the total cost associated with each option—is critical to making a select...Read More
As an actuary who helped to price and analyze policies for a large life insurance carrier, I quickly saw how policy owners end up getting the worst end of the deal. While agents can earn 80% to 100% of the first year premium that policy owners pay for a permanent life insurance policy, nearly 50% of these policies are cancelled within the first 10 years. As a result, policy owners can pay tens of thousands of dollars for these policies...Read More
Buy term and invest the difference is your best bet when it comes to life insurance—unless you find the right product and fund it properly. For high net worth investors who already invest in U.S. Treasuries as part of their bond portfolio, properly structuring certain permanent life insurance products can yield higher returns with a similar underlying risk. In the absence of finding a low commission product and funding it properly, buy term...Read More
By now we all now the problems with permanent life insurance: low returns and high premium costs. However, these poor returns are largely due to the large commissions paid to agents who sell these policies. In our previous post (see here) we discussed how most life insurance products impose high surrender charges on policy owners if they cancel the policy. They do this in an attempt to recoup the high costs associated with paying the life insura...Read More