Normally we wouldn’t spend two entire posts just dealing with one short “news” story but this story written by US News and World Report and published at MSN is so egregious we decided it deserved more time on the Insurance Pro Blog.  Just a few days back, Brandon mentioned it because of a comment to the article that inspired a review of life insurance policy loans vs. secured loan alternatives.

Today, I’m going to tackle a laundry list of things that they totally got wrong.

Now, it’s not that surprising that a major news outlet would publish garbage…is it?

No not really. However, it’s not just that the commentary or the editorializing is bad–the facts aren’t even correct.

Just a few minutes reading Wikipedia entries would have given them more factual info than they bothered to publish in the story.  And we all know everything is true that we read in Wikipedia, right?

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The other day I happened upon a piece that MSN Money reposted telling me (and you) what I (we) needed to know about whole life insurance. The piece is horrendously bad, but if you really want to read it, you can find it here—just don’t take anything it says seriously or as fact.

You’ll notice that the article really doesn’t say anything about whole life insurance loans and the truth is my beef isn’t with the article. Well, at least not for today. Maybe sometime in the future we’ll go back and count the errors Neda Jafarzadeh made. It’s truly sad that US News would green light such an erroneous piece of “information.” But we have other things to discuss.

I don’t typically spend much time on the comment section of news articles. Though I freely admit they tend to be the most entertaining section of the most news articles. Luckily one comment caught my eye as I quickly scrolled down the page about ready to close the tab. A comment from one AgainstGovernmentWaste who noted:

“Whole life insurance is the pay day lender of the middle class.” ~ Dave Ramsey

Oh boy!

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Applying for life insurance is not a terribly complicated process for people who have only minor health issues.  On the other hand, for people who have more serious issues with their health it can be a much more arduous process.  In particular for people who suffer from either type of diabetes type 1 or type 2. Their are unique challenges presented by both types of diabetes when one is trying to secure a life insurance policy with competitive pricing.

Those who have diabetes should be prepared for different pricing, requirements, and products, than people without the disease whose body has the ability to maintain their insulin levels normally.   Also, with both types of diabetes you can expect varying conclusions from life insurance companies as each them view type 1 and type 2 a bit differently.

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Indexed universal life insurance is another strong contender to whole life insurance for the purpose of accumulating wealth and generating retirement income through life insurance. If you need a primer on how indexing works, you can find that here. To explain the concept in 25 words or less, we’ll simply say that it’s a product designed to use stock index movements as a means to determine the credited interest rate on a universal life product. And if you need help understanding the basic mechanics of universal life insurance, that post is here.

So since indexed universal life insurance vies for your precious retirement-building-dollar, we figured we’d ask the same question we asked of whole life insurance just last week. How doe the income change as the assumed rate of interest changes.

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