122 Gen X Retirement: Gloomy

When it comes to Gen X and Retirement all is not well with the MTV Generation. But this despair doesn’t seem to be rooted in a systemic lack of effort—one of the core flaws often noted by its preceding generation—rather it originates from a demoralizing late-in-life shift in world view coupled with a struggle to gain attention among the institutions that most likely hold the answers to Gen X’s path to retirement prosperity.

Or perhaps it’s just a hold over of that 90’s Curt Cobain and Fiona Apple everything sucks and everyone is awful mentality with which a lot of them entered into adult hood augmented by their having to witness the breakdown of the US economy right before most of them truly got to ride the gravy train.

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121 Life Insurance is not a Rotisserie Chicken

“We want to let everyone know that life insurance is like that guy on the TV selling his little oven thingy…you just set it and forget it!”

That was the utterance of a Friday morning sales meeting I once labored through when I was a relatively new agent at one of the big mutuals. The attempt was to equip the newest agents with the confidence to convince their family and friends (i.e. their project 200) that this life insurance stuff was pretty cool.

I’m the only one who was in the room who still happens to be in the business, and I’ve never channeled Ron Popeil when it came to explaining life insurance, so I’m not all that sure it was a successful tactic, but I digress.

Sadly, this also wasn’t only time I’ve witnessed this allusion in an attempt to persuade an unwitting prospect to buy life insurance.

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105 Universal Life Insurance Guarantees: There’s More to this Story

105 Universal Life Insurance Guarantees

Since the inception of universal life insurance in the late 1970’s, the whole life world has felt threatened and rightfully so. Universal life insurance boasted a myriad of benefits that improved upon many of the drawbacks that long plagued whole life insurance.

And the one argument the whole life insurance champions have long leaned on is the guaranteed aspect of whole life insurance vs. universal life insurance.

But does this angle really work for whole life insurance? Conceptually it makes sense. And the guaranteed column is guaranteed. But practically speaking does this argument matter? And if it doesn’t, does this spell trouble for whole life insurance?

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Cash Value Life Insurance: There is a Right Way and a Wrong Way to do it

Cash Value Life Insurance: There is a Right Way and a Wrong Way to do it

Cash value life insurance is not really like a shirt sitting on the rack at Macy’s, but instead a stock piece of clothing at your favorite clothier. Sounds a tad strange, but here’s my point. Life insurance is a very customizable product. I can tweak a lot of aspects to life insurance (any kind really) to make it do certain things better or worse. This is one of the many things that makes life insurance such an incredible financial tool.

But many people would rather pretend that life insurance is an “off the rack” product that can only be implemented in a very narrow band of options. Nothing, thankfully, could be further from the truth.

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Have We Been Low-Balling Indexed Universal Life Insurance?

Have We Been Low-Balling Indexed Universal Life Insurance

We’ve long held indexed universal life insurance assumed credited interest rates at 6% across the board. And we’ve long been criticized for the practice. The problem, that others came to us with, was the fact that carriers have different cap rates, and those different cap rates do cause the overall overage credited interest rate to be higher or lower than a competitor with a different cap rate.

Our push back to this claim was simple. We understand there are different cap rates, but ultimately we want to evaluate the underlying expense assumptions of the product, and since those assumptions would create a dizzying array of spreadsheets if we tried to compare them all against one another (if we could get them at all) it was far easier to just leave everyone at the same assumed credited interest rate and look at the end result—cash surrender value and projected income.

And we’d still contend this approach pretty solidly evaluates variations in expense assumptions. But it does leave certain considerations out, and it poses some additional problems that we’ve more recently decided were worth worrying about.

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Yes You Should Buy Term and Invest the Difference

Yes You Should Buy Term and Invest the Difference

Buy term and invest the difference has long been the mantra of investment salesman(women) and Primerica built an entire company around the idea. The premise behind the concept has always been that one could achieve a greater return with “investments”  vs. traditional whole life insurance and it’s cash surrender value build up.

For the investment industry, this was a way to take premium dollars away from the life insurance industry and redirect it into investment accounts. For Primerica, this was a way to replace current life insurance contracts with term insurance juxtapose on the cost today of achieving a given death benefit.

Other financial talking heads have jumped on the buy term and invest the different bandwagon, mostly because they know it draws a lot of attention from life insurance agents who want to argue the point—and few things draw more attention to you than a fight.

As insurance brokers/agents, one would anticipate that we’d very much dislike the notion of buy term and invest the difference, but one would be wrong to make that assumption.

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Should You Support Your Local Insurance Agent?

Should You Support Your Local Insurance Agent

The life insurance industry has been very slow to embrace modernity and adopt systems that allow it to move more nimbly through the information age. As an industry it has blamed it’s lack of keeping up with the times as a security/compliance concerned coupled with an economic disincentive to spend a large amount of money on an infrastructure that will not boost return on equity.

There may be some truth to that last element, but I’d argue the focus is placed elsewhere largely because the industry knows that its current system (selling locally through agents who focus more on relationships than raw numbers) is a really good model for bringing premium dollars without a lot of technical justification.

But does the typical consumer gain from an insurance industry that is trying largely to hold onto a distribution model as outdated as a Sony Walkman? I’d argue no.

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