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Lance Said:

Is Whole Life insurance always a bad idea?

We Answered:

Buy term insurance for short term goals and whole life for permanent goals.
For example, whole life for your burial and expenses
Term for covering your mortgage and college expenses.

Freddie Said:

whole life insurance opinion?

We Answered:

life insurance is a waste of money

Lynn Said:

How may I find out about a whole life insurance policy someone may have on me?

We Answered:

OK, second question first - no, you signed when you were 18, he's the policy owner, he's been paying the premiums, he gets to choose who gets the money if you die. Period. It can't be changed. You don't get to change your mind.


First question. Likely, he has a policy on you. He says he does, you think he does, you remember signing the papers.

There's no central database where you can look it up, if that's what you're asking.

MIB, for a fee of $75, will give you a list of all companies that have received an APPLICATION for life insurance, on your life, in the past 10 years. If this is more than 10 years old, it won't show up. AND, it's only applications. You get the name of the company.

But not being the policy owner, you can't DO anything about it, so it's kind of a waste of your money.

Stephanie Said:

Why are some life insurance policies more expensive than others?

We Answered:

There are many reasons that some life insurance policies are more expensive than others.

Here are some of those reasons:

1. Loss experience of the insurance company.
2. Return on the insurance company's investment portfolio.
3. Type of life insurance policy.
4. Amount of coverage offered.
5. Your personal factors considered in underwriting your application - such as your age, health, family health history, gender, occupation, hobbies, among others.
6. Policy Fees charged by the insurer, broker or agent.
7. Exclusions, terms and limitations applied to the life insurance policy.

Just because one policy is more expensive, it doesn't mean it's better than any other policy.

You may want to consider the following:

1. The AM Best Company financial stability rating issued for the insurance companies you are considering.

2. Are the life insurance rates guaranteed to remain the same for your entire lifetime?

3. The customer service rating of the insurance company.

4. Are there any complaints on file with the Department of Insurance in your State for the insurance companies you are considering?

Make sure you have a life insurance agent you trust who can get all of your questions answered and help you decide the right type of life insurance coverage to meet your needs and fit your budget.

Best of luck to you.

Amber Said:

When to buy whole life insurance?

We Answered:

Primericaisbad: "Buffoons!"

No; just ignorant salespeople, ironically with the best of intentions.

Most insurance agents are brought up under one of two schools of thought:

1) Sell whatever makes one the biggest paycheck; or

2) Concentrate on the easy sale. This one relies on companies preying on the ignorance of their agents by teaching them the "simple math" of low-cost term and mutual funds, and convincing them that evil insurance companies rake in higher profits from permanent products, when in fact the opposite is true.

The bottom line is that premium (other than comparing apples-to-apples between companies) is not an appropriate consideration when choosing what type of life product to purchase. The only consideration is to determine the objectives that the coverage is to meet and purchase the product or products that best match them.

If the need is permanent, then permanent insurance is the only option. Whole life is the only type of permanent coverage that guarantees every aspect of the product. Other products transfer greater risk to the policy owner.

And as far as buying term and investing the difference, anyone who preaches this sermon and doesn't see the value of variable universal life lacks a basic understanding of financial concepts.

Incidentally, there is absolutely nothing wrong with purchasing a product based on a future need - if the numbers and the timing support the decision. It often makes tremendous sense to lock in one's future insurability.

Finally, in most cases, any type of permanent coverage, including whole life, is more cost effective in the long run than term if the insurance need is for longer than 20 years.



ADDED: Okay; perhaps I was wrong. After reading Nathan's response, maybe "buffoon" was the correct term after all. I keep seeing permanent life insurance described as insurance with a savings or investment component attached. The sad thing is that it's not just laymen who are under this impression. Agents actually believe it!

Whole or universal life does NOT have a "savings" portion attached; it has cash value. In a whole life policy, cash value is in no way to be construed as an added policy expense or separate account. It's sole purpose is to underwrite mortality expenses as they increase over the life of the insured in order to keep the premium level. Universal life was created primarily to allow premium flexibility and to take advantage of potentially lower premium outlay when the policy's internal rate of return was higher than expected. However, if the cash value did not grow sufficiently, the policy was "underfunded" and at risk of lapse. In other words, instead of the insurance company assuming the risk of poor performance, they passed that risk on to the policy owner.

Granted, policies evolved from there to allow for tax-advantaged savings and investment strategies using permanent life products. In the right circumstances, this is entirely appropriate; however, this is not, from an insurance standpoint, the purpose of cash value.