The Insurance Pro Blog is back up! It took a lot longer than expected, but we came back with a face-lift and a new friend. Welcome to the latest iteration of the Insurance Pro Blog. We've dramatically improved our layout to ring in our expansion as the web's premier resource for personal finance insurance related topics.
We have a new staff member!
The Newest Member of the Insurance Pro Blog
Welcome Brantley Whitley to the Insurance Pro Blog. Brantley has an expansive decade's worth of experience on both the retail adviser and wholesale side of this industry. He's assuming the role of Director of Online Marketing (and he deserves major kudos for the Insurance Pro Blog's face-lift) and will also contribute to our highly revered educational information as a regular contributor.
I'm highly excited about what the future of the Insurance Pro Blog looks like, and for those who visit us on a regular basis, we hope you share in our excitement in our expansion to be an even greater resource for information on this industry.
Be sure to check out the updated pages and be on the look out for some additional additions to pages and offerings from the Insurance Pro Blog. We have a lot more in store as we roll into the Summer.
Is the Old Insurance Pro Blog Still Around?
Sort of. The old wordpress.com hosted blog exists, but the old formate is currently unreachable. This will cause a few issues for our followers and former RSS feed subscribers, but we'll detail how to navigate all of that in the new future. We also ask for a little patience as we get used to the new format ourselves. The speed at which this transformation took place was incredibly rapid, and we'd still quite amazed by it. For those who are stick in nostalgia, here's an old screen shot from the old Insurance Pro Blog for memories sake.
If you've spent any time reading the financial press you'll likely notice that Americans are chronic under-savers and this spells bad news for retirement. In fact, it turns out we're so bad we recently reviewed a lot of the ideals Alan Greenspan championed and it turns out he might not have been exactly right (or at least that's the current preveiling theory, I've always believed he's sharply sarcastic and often made subtle jokes while addressing Congress that went over most people's heads). If you want “proof” that we're meandering up the creek without a paddle check here:
The Great Risk Shift
Solving a Looming U.S. Retirement Crisis
Life insurance agents love to fight over meaningless figures in an attempt to inflate the importance or attractiveness of their products. Truth is, current facts and figures aren't going to matter all that much. I've mentioned before that design is super crucial, and I've also hinted at the notion that there are core attributes that make some products better than other. There isn't really a blanket list of features regarding these attributes, so a little consulting with a knowledgeable agent is prudent. To highlight my point, however, I'm going to dive into the topic of policy distributions. This will become part of many posts discussing different features and why they matter. Throughout all this, you'll begin to understand why it's difficult to recommend one carrier as better than all the others, as they can be varied in where they are strong (i.e. one size–or carrier–does not fit all).
This one is intended for the consumers out there. Ever tried to compare term insurance rates across an array of different carriers? Ever wondered why some are consistently so low while others are incredibly more expensive? Ever talk to an agent who seems to throw a bunch of numbers at you without a lot of explanation why one might be better than another? Term life insurance seems like such a simple product and yet a lot of agents can make it so painfully difficult to buy. Why? Read More…
I've been meaning to do a piece on Cash Value Life Insurance as an Asset Class. And this discussion will stem several additional posts to address how placing cash value life insurance in your personal portfolio can significantly improve your financial situation, by leaving numerous options on the table that most people forfeit because they pick up and hold onto really bad financial advice. Approach the following with an open mind, and be prepared to have your outlook on personal finance changed forever.
I've been known to quote stock market returns from a Compound Annual Growth Rate (geometric mean) point of view. This calculation takes into account the effect time has on a rate of return and is wildly more useful than simply looking at average rate of return (usually quoted as the arithmetic mean).
But any good hardcore day trader or even the wannabe home gamers in the investment world should quickly ask a disarming question: “so what?” So the markets have traditionally failed miserably to consistently post a year over year positive return over the course of the past decade. There are still people who make money investing in equities, even your precious insurance companies.
And you know what? They are correct. Read More…
Spring is here, time to enjoy warmer days (if you're with me in the Northeast), blooming flours, and a fight between a so called financial educator who hustles a selling system to insurance agents known as Bank on Yourself and a fee based financial planner who is pretending to be a consumer/journalist. Here's the story.
So what does this all mean? Pam is being exposed for the swindler she really is? Allan is looking to knock some competing savings strategies off the table as he competes for your business? Or perhaps CBS is just doing what all good media outlets do, selling a story. Let's take a closer look at this, shall we?
Now that we know the basics of indexing, we can dive into a much more interesting topic: Does it work? We're going to use a hypothetical contract (it's actually a real contract from which I have borrowed heavily, but we won't name names) where there is a minimum interest rate of 2% per year and a maximum of 12%. I'm going to attack this from two different approaches, one will be a model based on Monte Carlo methods, and the second will be a historical analysis of 140 years of annual growth in the S&P 500 index.
For several decades insurance companies have been using an approach to determining credited interest rate that is known as indexing. It's a practice that has had it's detractors (yours truly for a little while) and has been a method that has been used for good an evil by well educated and unscrupulous agents respectively. Today we're going to dive into what it is, what it's not, and ask if it works (i.e. is it worth your time).
The answer to yesterday's question. It's roughly where the DJIA would need to be today in order to have achieved an 8% annual growth rate from its peak in May of 2008 (just a little over 13,000). I bring this up as there was a lot of excitement over the Dow's breaking into and closing above 13,000 yesterday, but we've been there before, we've fallen, and now we're back…4 years later. In case you missed it, that number is 17,581.9 or about 4576 above where we closed yesterday.
I don't intend this to be an Us vs. Them statement that shuns stocks. Simply a way to keep things in perspective and note that risk associated with what a lot of financial advisers have treated as the common practice (being an “investor”). Also, it's a reminder that we are no where near territory where we should feel comfortable celebrating. There's still plenty of lost ground we, as an economy, need to recover.
So the Dow closed over 13,000. Big deal. Call me when it's over 18,000. Now that would be something exciting. However, only if it happens this year. Fingers crossed.