Argument against Permanent Life Insurance: Lack of Fee Disclosure

In our final installment of the five most common arguments made against permanent life insurance we’ll take on fees or the lack of a discussion about fees, as high fees were already discussed.

The claim here is that life insurance contracts are very non-transparent regarding fee disclosure and you never really know what you are signing up for until long after you paid several years worth of premiums.

This argument, like several others, isn’t entirely unfounded. But it takes a large degree of liberal interpretation to the extreme.

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Argument against Permanent Life Insurance: Low Rate of Return

The rate of return argument against permanent life insurance focuses mostly on an irresponsible comparison of dissimilar asset classes.

Chances are good that most of you reading this understand that there is a relationship between the risk of an asset and it’s return; the two are positively correlated. This means the riskier an asset is (i.e. the more volatile it’s returns and the higher the chance you lose money if you buy it) the higher it’s long term rate of return is hoped to be.

People tend to be pretty comfortable with understanding that

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Argument against Permanent Life Insurance: High Commissions Paid to Agent

It seems one of the biggest reasons you should not buy whole life or universal life insurance is because the agent or broker who sold it to you will get paid to do so. At least this is a claim made in almost all of the articles ever written in an attempt to steer you away from these insurance products.

In what has to be the most ad hominem of all the arguments against permanent life insurance, the amount of money I make (or don’t make) takes center stage—I wonder how many of those folks wrote their article for free like I am this one right now.

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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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Top Indexed Universal Life Insurance Carriers for Cash Value Accumulation

Top Indexed Universal Life Insurance

Indexed universal life insurance is the product that can rival participating whole life insurance for cash accumulation and income strategies. It’s risk profile is similar, and it brings even more flexibility to the table than a well-designed blended whole life policy.

Several months ago we dished on what carriers we felt were best bets for whole life insurance when cash accumulation was top of mind. Today we’ll details our picks for indexed universal life insurance.

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Can you “Bank” on Universal Life Insurance?

Can you “Bank” on Universal Life Insurance

Bank on Yourself® and the Infinite Banking Concept® are well known selling systems that promote whole life insurance, but can we apply the secret sauce of these ideas to universal life insurance as well as whole life insurance?

The purests (i.e. those with a vested interest in promoting whole life insurance) would tell you know. But not one to avoid a fight, I’m going to suggest they may be lying to you.

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Top Reasons for Owning Cash Value Life Insurance: #1 Liquidity

Cash Value Life Insurance LiquidityToday we’re going to discuss what I have always felt was the best reason to have money in cash value life insurance and use it as part of your financial strategy. This may seem counter-intuitive. It may even seem incorrect. But I assure you that when implemented properly this is most assuredly the best feature the product brings to the table for wise investor/saver.

That benefit is simply…liquidity.

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Top Reasons for Owning Cash Value Life Insurance: #2 Leverage

cash value life insuranceFinance is a funny topic. For some it means little more than buying some low cost index funds and not accumulating massive amounts of debt. For others it’s mostly about contributing to a 401k or traditional IRA so they can raise a middle finger to the IRS (but the IRS may get the last laugh). For us, it’s a game of strategy.

A semi-complex circumstance that requires foresight and focuses on bigger picture considerations rather than drill hopelessly into situational (and most commonly transient) event. The game is best played when one can gain an upper hand. And few financial products bring leverage to the table like cash value life insurance.

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Fixing the Internet: Why Whole Life Insurance is NOT a Bad Investment

whole life insurance is a bad invesmentThe “is whole life insurance a bad investment?” discussion is a great example of the classic advice we were given when the internet was a fairly new phenomenon and we had only just begun to use it as a resource for information. As we were out searching the world wide web with Metacrawler we were commonly reminded that we must be careful about the information that exists on the internet because anyone can put whatever they want on it–fact or fiction.

Blogging has become another source of mixed information that is sometimes difficult to dissect when it comes to fact or fiction. And on the subject of personal finance, and specifically insurance, there are a lot of opinions. I’ve discovered that most of the not so friendly cash value life insurance adherents tend to develop their opinions in deeply rooted ignorance, and today we’re going to walk through one such example.

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Is Whole Life Insurance like a Roth IRA?

whole life insurance roth IRAI want to start today’s discussion about whole life insurance and Roth IRA’s by noting that I had mixed feelings about writing this post. This one was motivated by requests to retort a blog post that showed up on a certain ER Doc turned part-time financial guru’s web site when he posted several reasons why whole life insurance and Roth IRA’s are not similar.

Here’s the problem for those who have made the request that I “take him on.” I don’t disagree with him.

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