by Agent Randy E.Hoffman 05/23/2016
A WARNING and Commentary:
Last week one of the most powerful life insurers in the world pulled one of their products in their Permanent Life Insurance Family. They cited the adverse interest rate environment that would make it difficult for new policyholders to benefit long term. I applaud their integrity and credibility for doing this.
Between my Father, a deceased Uncle and myself, we have around 88 years of experience offering life insurance and we’ve had many heated arguments over what products fit the client best at different time periods in their lives. I DO NOT like so called ” Cash Value ” products, PERIOD! I don’t trust them. I don’t care if it’s Whole, Universal, Variable Universal or Indexed Universal or some other name that ends up confusing the buyer. These products are designed for a PERFECT world and we do not live in a PERFECT world. When you buy these products YOU lose control of the numbers, the insurance company controls the numbers.
Last spring I got a call from a gal extremely upset because she found out after 13 years of paying into a ” Whole Life ” policy, her cash value was a little more than one month’s premium! To make matters worse it was sold to her by her sister! When I showed her what I would have done for her back then she flipped out when she realized she could have saved $ 140.00 monthly and got the same death benefit. What would that money be worth now if it was put in a mutual fund over that 13 year period?
Agents that push these products are paid commission every year the policy stays on the books unlike a much more affordable term product which normally only pays the agent the first year. It is my strong opinion that Life Insurance should be a stand alone purchase, when you combine a savings element and a potential tax benefit with a future policy loan feature you open the door to trouble and that trouble can turn ugly at a critical time of your life.
I realize agents have differing opinions on this matter but I will never have to answer this question to a valued client ” what happened to my cash value “? Term products can be purchased all the way up to Age 80. By stacking or what we call ” Laddering ” a series of Term Products throughout your life you ALWAYS control the numbers and have the knowledge that you will leave the largest death benefit possible to the people you love the most.
Let your life insurance be life insurance and your investments be investments and NEVER combine the two. I offer 3 GUARANTEED products 1) Straight Term available up to issue age 80. (includes the monthly income option) 2) Universal with DEATH benefit number GUARANTEE 3) SINGLE PREMIUM with DEATH benefit number GUARANTEE.