|Quoting mad99 (Reply 1):|
Id like to hear what type people have and why
LUCK ! Read on...........
|Quoting tz757300 (Reply 5):|
Well, once I have a job that offers it, I'll get it. But if I'm on my own (or job doesn't offer), I won't contribute into a plan until much later because I have no debts, have little of anything worth value, etc, therefore, I don't see it worth very much to me yet.
The very term, "life insurance" is very misleading, as is almost everything else that life insurance companies sell.
Here's why; to begin with, all life insurance companies are "in business" for one thing, and one thing only; to make a profit. Nothing else.
So, aren't ALL
companies in business to make a profit ? Yes they are; and there's absolutely nothing wrong with companies making a profit.......except for one thing.
Most companies either manufacture a "product", figure up all of their costs involved, then sell that product at a price that is sufficient to cover all of their costs involved, with enough left over to insure a profit.
Other companies don't "make" products, but rather offers a "service"; accountants, barbers, doctors, lawyers, consultants, hookers, "pollsters", etc.etc. etc.
Now.......let's take a VERY close look at what life insurance companies do to make "their" profit;
But first, it's very important to understand one thing about "insurance" in general. The whole "insurance" industry is divided into just TWO completely different "types" of insurance; casualty insurance.......and life insurance;
To further complicate things, many companies are involved in BOTH types, and some aren't; some only sell one or the other.
Let's look at casualty insurance first; if you own a car, in many places you are required by law to carry "liability insurance"; if you're involved in a wreck, usually the party responsible must "compensate", or "indemnify" the party (or parties) that weren't at fault. Most people with newer vehicles also carry "collision" to partially cover their cost of repairing their car, or to help buy another one. There are MANY companies selling these two "products"......liability, and collision. So far, you already know everything I've mentioned; some may even be saying "so what" ? ( I'll get to the "so what" next.)
Now let's talk about life insurance; ( pay very close attention here ); Almost ALL
(but not quite) life insurance companies sell two "types" of life insurance; From the very beginning of the life insurance business, the companies sold what is called "cash value insurance"; understand this; the life insurance companies have been thinking up new names to call cash value life insurance for over 150 years now, but it's basically the "SAME OLD THING"; Next, while they've been coming up with all of these names, they have also managed to come up with a whole new "vocabulary", (much of which no one outside the life insurance industry, has the slightest idea what some of this "stuff" means. )
Words such as, "dividends", "premiums", stock companies, "mutual companies", "policy", "beneficiary", "indemnify", and it goes on, and on, and on.........because YOU, the "public"....were never meant to understand the true nature of the life insurance business; and if you think that sounds "dubious", consider this; neither were the thousands and thousands of "insurance agents", who scampered around for 150 years, "writing" billions of dollars worth of "business" for the insurance companies, while all the time blissfully unaware of just how bad they were actually "screwing" their own neighbors, friends, and even families.
One of the very best reference works ever written about the life insurance companies was written by a man named Herbert Dennenburg; Herb Dennenberg served for 8 or 10 years as the Insurance Commissioner of the state of Pennsylvania, and was one of the early pioneers in starting to bring the insurance industry under the "microscope" of public scrutiny. His book is a true classic, and I've probably read it about six times all together.
For example; if you buy something on credit, what does everyone call the money you have to "send in" every month?
the "payment", right ? That's NOT what the life insurance companies call it ! They call it your "premium"; roll that around in your brain for a minute or so; in much of modern day life, the word "premium" is used to denote something that's "above average", "deluxe", Right? Now; any one own any common stock ? The "shares" corporations sell to raise capital; if you do, (and if you're lucky), you may get a check occasionally, called a "dividend", right ? Kinda like "you share" of the profit. If you have a cash value life insurance policy, you probably get a "dividend" also; and the company is going to tell you that "dividend" is "your share of the profit" also. When they tell you that, they are telling you a FLAT OUT LIE ! Before I type another word, I'm certain there are many saying, "what does HE
know, that every one else doesn't know". You're going to be surprised at the answer to that; Because the answer is, NOTHING! Because EVERY single word I've typed so far is "known" to thousands, maybe even millions of people; if you don't happen to be among those people, it's not MY
fault; it's YOUR fault ! Because every library there is, every book store there is, are all just FULL of books that explain EVERYTHING (and much more) about what I'm saying right now. I you haven't read all of them, then you probably don't know much about how life insurance "works"; I have read all of them, many multiple times. I once took the test, got my Ohio license to sell life insurance (in my spare time), all while working my %$77^ off at my day job, driving a truck; (you may have noted before, all five of my "off spring" have a college educations.)
If you haven't read them, it doesn't mean that you lack intelligence; it does however mean that you may very well be seriously lacking in knowledge about a very important subject; something that may be, and in some cases, IS
the difference in people retiring with "assets", as opposed to retiring with little income, no assets, and $$$$$ of debt.
And the mere fact that you may not know something that I do, doesn't necessarily make me any smarter than you (or anyone else), but probably does make me more knowledgeable about life insurance than the folks that are unaware of all of this. But let's continue on; I just mentioned that the life insurance companies almost all sell two "basic types" of life insurance policies; "Cash value" is one and "term insurance" is the other; Let's examine CV
first; say you wish to have "coverage", so you tell the insurance man you want to buy life insurance; Great says he, "take a look at this fantastic "whole life policy" here; and he goes on to explain how, as you keep sending in your "premiums" every year, you "accumulate" this "cash value"; (hey, if you ever "get tight", you can "get money back"; aint that great?
No, it's NOT great, and it's also complete NONSENSE ! To start with, he's telling you that if you "take out" (they NEVER say "buy"..........it's always "take out") if you "take out" a $50,000 whole life policy, you're
gonna have 50 k of "coverage" clear until you die ! and the "coverage" can NEVER "go down" ! (and the "price" can never go up ); Isn't that great?
No, it's not great, and it's not true either; the reason is quite simple; first, you're committed to a specific "premium" as long as you're still "breathing" ("whole life") 2nd; say, 20 years later, you die; someone, (hopefully someone you like) is gonna get 50K; now, say you don't die; you have "cash value "built up"; it's yours ! but guess what; if you tell the life insurance company you want your "cash value", they say, sure.......you can "borrow" your CV
! about now, you're likely to ask "WTF" ! It's MY
damned money ! I WANT It, NOW! ( I know, it sounds like that J.D. Wentworth advert !) Now......pay close attention; say you have 20 k CV
"built up"; you do "borrow it out; you STILL have to keep paying those pesky "premiums" ! If you miss just ONE, you no longer have ANY "coverage"; and if you DO
keep the premiums up, and heaven forbid, a train runs over you, guess what; your "beneficiary" only gets 30 K, cause you already "borrowed" 20 K out, and you haven't paid it back YET
! So if you're still paying the SAME premium, but the beneficiary only gets 30K instead of 50K, wouldn't say the "cost" just went WAY UP
At the end of the day, there can only be ONE kind of a cash value life insurance that's a"good deal"; and that's only "if" someone else is paying ALL
of the premiums. (Of course it's still not such a great deal for YOU, cause you have to DIE for anyone to get any money !
See, the life insurance companies have been selling this BS
to the public for almost 200 years now, and they've made not just "billions" (with a B), they've made "Trillions" ( with a capital T ); if you compared what the life insurance companies have done, to what Bernie Madoff did, Bernie would look like a guy that grabbed somebodies pocket change !
.......enough about cash value life insurance; at the same time they sell this crap, they also sell "term insurance"; which is.........a certain amount of coverage, for a specific "term" of time, for a specific amount of "premium". (they even insist on dazzling you with big words when they are selling you the right thing !) Term insurance is just "coverage" with no phony "savings account" built it, and for MUCH MUCH less "premium".
Ask yourself this; do you have fire insurance on your house ? Liability and collision on you car ? Has any insurance agent ever told you you could pay three times as much for your insurance, then after 20 or so years, get "some" of your money "back" ? Everyone who ever bought a cash value insurance policy DID just that ! The whole idea behind cash value life insurance is quite simple; it offers X amount of coverage for "X" dollars; how does the "average" citizen know a HIGH price from a LOW price, especially when no one has the least idea how insurance companies determine their "risk", which is SUPPOSED to be what their prices are based on. News Flash: all life insurance is based on mortality statistics; (which are available to be read by anyone who wants to read them; only most people not only aren't "interested" in mortality stats, they don't even understand them if they WERE interested.
Guess what; mortality stats clearly show, that the older one is, the closer he / or she is to "leaving this world: in other words, because for a company selling a "product" that is ALL
ABOUT "risk", it isn't too hard to see why a 20 year old can buy more life insurance, for fewer dollars, than I can at 80 ! (kinda make sense when you think about it !) But for 200 years, every life insurance agent that ever sold a "whole life" policy, told the "insured"......the "coverage never goes down, and the price never goes up" ! ( which is about as accurate as saying the Pacific Ocean is a huge circular "puddle" 1 inch deep, and standing vertically, "straight up" !) The thing that always amazed me was, the guys selling this "product" actually STILL don't believe all of this when you prove it to them, (and I have proven it to quite a few, including one former "Insurance Commissioner" of Ohio, who was himself, a former cash value insurance agent, STILL receiving residual commissions from "business" he had sold over a 20 year "career", BEFORE being appointed to his post as "the head State muk-a-da-muk" to protect the citizens of Ohio from the Life Insurance Industry ! Can you believe It ?
He actually said to me......I'm the Insurance Commissioner of Ohio; you can't come in MY
office and say things like that, or I'll have you thrown in jail ! To which I replied, (after already pointing out his VERY serious conflict of interest about his commissions), "you can have me arrested AFTER, but not before, I do something which is illegal, and not before. I thought the fool was going to have a heart attack! (but I digress)
Hey..........remember a ways back I said those "dividends" have nothing to do with "your share of anything" ? I'm guessing that many might not have believed me when I said that; again.......ever own any stock in XYZ Corp, and get a few hundred in dividends ? Did you tell the IRS ? (actually, you don't even have to, cause XYZ Corp. already reported it to the IRS !) They have to; it's the law! And not only did you have to pay tax on the "dividend income", if you failed to mention it to them, you may be reading this from your "new room" at the Cross-Bar Hotel ! But the "dividends" from that cash value insurance policy ? No taxes at all on that; cause it's NOT profit; what it IS
, "is" (gosh, that sounds like "slick willie clinton") a gross OVERCHARGE in the beginning, followed by a very minuscule refund, (of your OWN money.)
The IRS ruled on that before I was even born, and I just turned 80!
Now........let's start all over at the very beginning; ask yourself this; WHY do want life insurance coverage ? If your answer is......you're a young guy, (or girl), if you have DEPENDANTS, as in young children, and you're making an excellent living, AND
if your income is the sole support of your children. (and your wife if she doesn't work), then yes, you probably do need to have some insurance coverage; as to "how much coverage" and "how much to pay for it"....that's easy; just as MUCH as you feel comfortable paying for, AND
for the VERY LEAST amount you can get it for; and here's the GOOD NEWS; today, largely because of guys like good old Norman Dacey, ( who wrote the al-time best ever book on the subject, "What's Wrong With Your Life Insurance")...........and about 3 dozen other authors that exposed the life insurance industry for the scam it was (and in some cases, still is), in today's world, life insurance has FINALLY become a "product" which is priced by, and driven by competition, just like everything else in our economy; and believe me, the life insurance companies are STILL making a GREAT profit ! ( just not selling near as much "whole life" as they used to) Another VERY interesting fact is,,,,,,,,as big as the insurance industry is, (and the average person can't even imagine how very big it is, it's STILL NOT regulated by any Federal law; each state has it's own Insurance Commission, and many of them are overseen by political hacks, many of which, (like the afore-mentioned schmuck in Columbus, Ohio), who are about like like having a bunch of coyotes "guarding your chickens !)
BTW.........you may think that was a LONG post; it's actually about 50 times shorter than the periods at the ends of the sentences, compared to the dozens of books I had to read half a dozen times to absorb and comprehend what they were all talking about. If anyone has the least interest in understanding more about the life insurance industry, feel free to IM
me for a comprehensive list of reading matter; it's ALL
available to anyone. ( I always thought about writing one of my own, but I'm getting so rusty on the subject anymore, I'd have to do a hell of a lot of "catching up", and then I wouldn't have any time left to get on A.net !)
Stupidity: Doing the same thing over and over again and expecting a different result; Albert Einstein