What does BG think about Life Insurance?

[Kalmado]

Do you have an answer to it? Unless I misread, the point of the thread was for you to have a better understanding of people's reluctance towards life insurance, but that doesn't do you much good if you don't have an answer to those. So, how did insurance companies offset the lost of profit once the regulations came in? When Obama set the credit debt regulations, banks switched to insane overdraft fees to recoup. So, insurance must have done something else. What was it?




And that's a full stop for me. Honestly. Yes, I get it. Lending Club is not going to give me a huge payout if someone dies, but I am averaging a 14% rate on returns right now through them. And I get to control how much money I put into it, and where the money is going. All the while, it's pretty straight forward on how Lending Club is making money off of myself and others. They are still making money off of money, but they aren't doing it through crazy hidden tactics/policies.

And most importantly, if something happens and I can't put in any extra for a little while? nbd. I'll still get my payments back as it goes. While it has its own set of risks, I widely diversify the money I put into it. And I find it to be a lot less risky.

We only have so much money to allocate towards investment. We're not rich. I'd rather take that extra funds and put it to something I see a direct benefit to. In order to invest in life insurance, I would be cutting back on my other investment. And that's not worth it to me.

The only people that would have the answer to CEO's and other higher ups sucking all of the money while the grunts make the money for them are those CEO's make significantly less. As someone on the front lines of insurance if I run into a client that has nothing but hate for myself and the industry I try to be empathetic and move on because they do not want help (yet). Remember too, I'm in Michigan, highest auto insurance in the country. And every year it gets worse.

If you and your husband are not in a position right this minute for life, that's OK. I personally think you should find some people who you could trust to talk with in person to share your frustrations with and what not. I wouldn't oppose to PM'ing you either because I think our back and forths would be long and probably personal.

[Seraph]

Where do I say financial investment strategy again? Oh that's right, I didn't.

So putting aside money for a future car, or future college expenses, or future funeral expenses (via insurance) is not a financial investment strategy? lol

Lets look at the first definition of the word "invest":
"expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture." LOL

[tyven]

This argument stinks because much like final fantasy xi, investment products are situational.

Whole life policies are great for children.

529s are great but States with prepaid tuition are still better.

401ks and IRAs are wonderful but that doesn't mean you shouldn't look into adding an annuity.

Any RIA or financial advisor worth their salt will stress how important it is to have money in different buckets.

Arguing that any are better than another or that whole life is a "joke" is silly.

[Seraph]

This argument stinks because much like final fantasy xi, investment products are situational.

Whole life policies are great for children.

529s are great but States with prepaid tuition are still better.

401ks and IRAs are wonderful but that doesn't mean you shouldn't look into adding an annuity.

Any RIA or financial advisor worth their salt will stress how important it is to have money in different buckets.

Arguing that any are better than another or that whole life is a "joke" is silly.

I stand by my opinion that whole life is almost never worth it, but I do agree with the "shit is situational" stance completely. However I get pretty annoyed when someone who works for an insurance company has the balls to just completely lie and state:

And to be crystal clear, I don't sell insurance.

Makes taking their opinions much more difficult, and I can see why Ksandra took the initial stance she did of "insurance is a scam/scummy/sleazy/whatever"

[Kalmado]

Hey man, you can think what I want but that's how I approach our clients. I help them manage their risks and show them what's available. I'm not slinging tablets to 90 year olds at Verizon who just want a pay as you go flip phone.

[Ksandra]

Arguing that any are better than another or that whole life is a "joke" is silly.

I don't know if I agree with that. We all have a certain amount of money for investment allocation. For those like myself where that money is limited, it is important to look at all the benefits/risks and decide which is going to be "better" personally to spend that money. I find LC to be a bigger benefit with less risk than life insurance so it is "better" for me if you will.

For kids, I still don't get it. I want my kids to be able to go to college and afford a home. That's where my investment is going to. To make sure they have a better future than I did. We would not have the house we have today if it weren't for my mom helping with the down payment. I want to be able to afford to do the same for my kids. I will have more money to do so if I put it into LC than into a life insurance policy.


As morbid as it is, if they were to pass, then the money would go towards funeral costs instead of their college/house. They wouldn't get to use it anyway.

[Kalmado]

Ksan, there isn't anything wrong about your stance on it right now (only thing wrong is taking Frat Stafford's meme!). You are someone I was actually hoping to see share thoughts here because of your apprehension about what life does and how your first post was pure vitriol but you've been open minded to hear more. Just don't rule it out forever. There is a benefit to having it.

[tyven]

I don't know if I agree with that. We all have a certain amount of money for investment allocation. For those like myself where that money is limited, it is important to look at all the benefits/risks and decide which is going to be "better" personally to spend that money. I find LC to be a bigger benefit with less risk than life insurance so it is "better" for me if you will.

For kids, I still don't get it. I want my kids to be able to go to college and afford a home. That's where my investment is going to. To make sure they have a better future than I did. We would not have the house we have today if it weren't for my mom helping with the down payment. I want to be able to afford to do the same for my kids. I will have more money to do so if I put it into LC than into a life insurance policy.

As morbid as it is, if they were to pass, then the money would go towards funeral costs instead of their college/house. They wouldn't get to use it anyway.

well what i meant is arguing about them from a 10 thousand foot view, which is what we are doing. And that is because, like you said with your situation, different investment vehicles are good for different situations. Ideally every american should be able to have some sort of life insurance, some form of education savings, and a retirement plan. Unfortunately that's far from our reality.

Whole Life is good for a kid cuz its cheap as fuck and ends up being worth a ton in the long run. It's obviously not going to be worth as much as investing in index funds from the start but investment accounts do not come with a death benefit. Some people don't want a death benefit on their kid and that's fine but people that can afford it might find comfort in being able to do a nice service for their child and having some money left to help cope, even if that money goes toward some kind of charity in the child's name because they were killed by a drunk driver or some shitty disease. to each his own.

When I have a kid I'll absolutely open a whole life policy and a 529 but I'm fortunate enough to be in a position where I don't have to choose between doing any of that stuff AND retirement.

In your case you are doing a disservice to your husband and children by not at least having term policies. You could, at the very least, calculate how much is left on your mortgage and take that out in term policies set to expire by the year your house would be paid off. Now your kids won't lose their home if one of you passes.

Retirement policies aren't that great for going toward a down payment because even though you can cash some out without penalty if the money goes toward buying a home, you will often end up with dick left for retirement. Unless of course you live in some shitty part of the country where you can get a decent house for less than 400k

TLDR: different strokes for different brokes

[Ksandra]

well what i meant is arguing about them from a 10 thousand foot view, which is what we are doing. And that is because, like you said with your situation, different investment vehicles are good for different situations. Ideally every american should be able to have some sort of life insurance, some form of education savings, and a retirement plan. Unfortunately that's far from our reality.

Whole Life is good for a kid cuz its cheap as fuck and ends up being worth a ton in the long run. It's obviously not going to be worth as much as investing in index funds from the start but investment accounts do not come with a death benefit. Some people don't want a death benefit on their kid and that's fine but people that can afford it might find comfort in being able to do a nice service for their child and having some money left to help cope, even if that money goes toward some kind of charity in the child's name because they were killed by a drunk driver or some shitty disease. to each his own.

When I have a kid I'll absolutely open a whole life policy and a 529 but I'm fortunate enough to be in a position where I don't have to choose between doing any of that stuff AND retirement.

In your case you are doing a disservice to your husband and children by not at least having term policies. You could, at the very least, calculate how much is left on your mortgage and take that out in term policies set to expire by the year your house would be paid off. Now your kids won't lose their home if one of you passes.

Retirement policies aren't that great for going toward a down payment because even though you can cash some out without penalty if the money goes toward buying a home, you will often end up with dick left for retirement. Unless of course you live in some shitty part of the country where you can get a decent house for less than 400k

TLDR: different strokes for different brokes

I get what you are saying. I can see how someone would want all three, but I think I will never reach a comfort level for the life insurance. Teachers don't "move up" in a company. And I am a complete wimp about trying to get what I deserve. We have a retirement fund for ourselves, and then the LC investments I am making are for the kids.

Admittedly, my LC investment is a joke with only a little so far. But we weren't in a position to start saving until about two years ago. And I have at least enough now that every month I can take the returned money and buy another note. I try throwing in $25-$50 every month on top of that. Since I started so late, I want to maximize my return.

LC, of course, isn't without risks. I was technically at a 4% return for a little bit because one of the borrowers didn't make a payment for two months, but then they paid bringing me back to normal. I try to be very careful in who I pick to invest in, and only put $25 per loan.

[Tokitoki]

Unless of course you live in some shitty part of the country where you can get a decent house for less than 400k

Did you not read my house complaints in the FWP thread? I could have had a baller house for 375k, a block from all the beer, burgers, ice cream, and fine dining I could afford.

[tyven]

sounds like rural alaska

[Ksandra]

My house was $315.

[Kalmado]

My house was $315.

I'll buy all the houses for $315.

We paid $52k in 2014. My company has a tool to roughly determine how much life insurance you should have taking into account age, sex, debt, and annual income. Mine is $230k.

[Ksandra]

I'll buy all the houses for $315.

LOL you know what I meant

[Seraph]

Hey man, you can think what I want but that's how I approach our clients. I help them manage their risks and show them what's available.

All joking aside, do you not understand why I called you out? You said you do not sell insurance, but you work for an insurance company and literally show potential clients the products you can potentially offer them. That is like saying you work at a restaurant, you show people who walk in the menu, but you "do not sell them food".

I say things are situational and/or not optimal, you (generally) disagree with my opinion, but then you tell Ksandra that maybe someday your product may be right for her after admitting it does not make a lot of sense right now. Things like this make people very distrustful with life insurance of all forms, whether it would be in their best interest to look into it or not. This smells of "I cant hook you now, but maybe later!" Just my personal opinion.

The thing is, I know better. I have evaluated my insurance needs and dealt with it for all of my personal issues, but not everyone does understand these things. Not everyone has much sense when it comes to finances, insurance, or even simple math. If you are honest with these people when they come to you for help, great. But implying "hey, at least I am not selling tablets to 90 year olds! lolololol" and getting very defensive at my criticism of some of your products just really does not convey that reality to me. That is not the impression I ever want to see when dealing with someone who has any sort of control over my, or my families, financial well being. That hold true for income, insurance, investment, etc.

You do not have to reply, or fight back. It is just something to consider and food for thought from someone outside the industry who has some moderate experience on the topic.

My advice for people would be to go online, see what products are out there, and try to educate yourself based on what you think your needs are. There are many places for information that is spelled out and explained much better than I can type out in a few paragraphs here. See what the experiences and opinions of other people are who are in similar situations to yourself, and only after that start working with a company trying to get insurance. Try to get as educated as you can, and try to figure out what works for you, and what costs and risks you are willing to tolerate. Insurance agents may very well treat you excellently and not lead you wrong, but that does not mean they have your best interests in mind either. Decide that for yourself.

[Tokitoki]

sounds like rural alaska

Hudson Valley region . About an hour 45 from the city, but really nice town. Wife kept looking for houses in the town that were for sale, several are going for over a million.

[Kalmado]

LOL you know what I meant

I know I know! Last time I'll mention (unless you would like to PM) but you should really seek out someone local. 1 1/2 years ago my wife and I were in a semi similar situation as you and I (since I know the biz) would've probably given a sales/solicitor a hard time regarding life. I would never push buying life on someone that genuinely states they cannot afford it. However, it has great value and should be considered when the time is right. For myself, when I worked for numerous companies (through a company/brokerage) I didn't know about many different options. Since joining my current employer, in a matter of literally 10 days I've learned so much about other options that my attitude towards life insurance has amplified because I have learned there are great solutions for almost all households. This is why I created this topic so I could try to learn what makes people tick regarding life insurance.

While mentioned in other posts that I'm trying to "hook you in" I'd like to point out this is false and ridiculous. As stated, I'm in Michigan. I cannot produce policies to you. I know you're in California and only a California agent can offer products to you. But, I'm not trying to "sell". My view is to help people by evaluating their risks and offering options to offset those risks. I realize there are many sales people out there that will do whatever it takes to get a sale regardless of how it effects the client. That's why I stress (as well as Tyven) to have someone you can trust to talk with regarding this subject. It's super touchy and many avoid it, but when tragedy happens it most likely creates an "ah ha" moment. Good insurance agents and producers want to have people prepared for those "ah ha" moments so when they happen they do not have to worry about anything regarding money.

[Boyiee]

Our thing was if one of us passes we'd like the other to not starve and die within the next year or two. Insurance people always try to sell you on having enough to pay off the mortgage if your s/o dies. I'm not going to have a mortgage if she dies, lol, I'm out. I don't need this house for just me. What I need is expenses, bills, and a second income supplement for a bit to get back on my feet. You think I am putting a 500k policy on either of us? That money is just going to go to some new fuckboi and shit buying bitches dinners and drinks. Nope. Smaller policy to get by for a while with a return on premium for a nice retirement check if we don't croak.

[Kalmado]

Our thing was if one of us passes we'd like the other to not starve and die within the next year or two. Insurance people always try to sell you on having enough to pay off the mortgage if your s/o dies. I'm not going to have a mortgage if she dies, lol, I'm out. I don't need this house for just me. What I need is expenses, bills, and a second income supplement for a bit to get back on my feet. You think I am putting a 500k policy on either of us? That money is just going to go to some new fuckboi and shit buying bitches dinners and drinks. Nope. Smaller policy to get by for a while with a return on premium for a nice retirement check if we don't croak.

That's mostly how my wife and I are. For marriage, I'm one and done so if my wife passed I wouldn't get remarried. The money would go to paying off her debt, any other debt, and to cover her income. That's exactly why we're doing the return of premium as well. It's affordable, will cover each other if one passes, and if we live we have more money for retirement.

[jmc]

1: Do you have it? Why? Why not?

*Yes, 1.5 million in coverage actually. 500K personal life insurance that I purchased, and a 1m policy that is paid for by my union.
My line of work I leave the house daily not knowing if I will come home, I do not currently have any kids but I wanted to future proof in advanced for when I do.

2: Have you just never looked into it?

*Union, and friends really pushed it fresh out of the academy. We usually hear about life insurance from a in person rep every 6 months.

3: How much do you have? How did you come to that figure? (If not wanting specifics, just say something like a lot or what we need and like, mortgage, college, etc). What type of policy(s) do you have?

*$1 million from the union, No idea how they came out with that figure.
*$500k personal insurance, grabbed this one as if something does ever happen to me i'd like them to at least be able to pay off my house.

4: Have it through work. Do you know what type of policy you have? No? Why? What happens if work drops the benefit, goes out of business, etc?

*Work will cover some type of benefit if its a line of duty death, do not think they cover anything else.
*Union covers the $1m policy as part of my union dues, if they for some reason go out then i'm screwed on that policy
*Those two reasons are why I have a personal policy, just in case.