Return-Path: Received: from k.gp.cs.cmu.edu by K.GP.CS.CMU.EDU id aa21943; 29 Jun 89 20:01:17 EDT To: bovik@K.GP.CS.CMU.EDU Subject: [bboard:] Life Insurance Date: Thu, 29 Jun 89 20:01:10 EDT Message-ID: <21941.615168070@K.GP.CS.CMU.EDU> From: Harry.Bovik@K.GP.CS.CMU.EDU 27-Jun-89 18:42 Betsy.Herk insurance From: Betsy.Herk@NATASHA.MACH.CS.CMU.EDU Universal Life Insurance is not a good product for any family that wants insurance protection. Cash value insurance is the most widely owned form of individual life insurance today, and it is too expensive. When a family purchases a cash value life insurance from an insurance company, most of them could not afford the right amount of cash value coverage to adequately protect their families. And most of them were never told that there was another alternative. Life insurance companies structure thier commisions so that agents have much greater incentive to sell the more expensive cash value policies. You may want to buy the plan because you think of is as "an investment". Cash value insurance bundles life insurance with a so-called "savings feature". But this investment method is what some consumerists have termed "funny banking". For example, would you ask a life insurance company to invest money for you if you thought you would get a low rate of return on your investment? It has been shown (and I do have statistics to back this up, you get roughly 1-3%interest) Life insurance was no different from any other insurance product. It was pure protection with no fancy "savings" features. Ask yourself these questions: Would you pay more for car insurance to allow the company to invest your money for you? (Of course not!) Would you pay more for homeowners insurance to allow the company to invest your money for you? (Of course not!) Why should you pay more for life insurance to allow the company to invest for you? Term insurance gives you more protection for your family and leaves money left over to invest for retirement or for future family expenses. The real issue, of whether to own cash value or term insurance, is not return on investment- it is adequate protection. The average death benefit paid by life insurance companies in 1987 was a shocking $7,050(Life Insurance Fact Book 1987) If you died tomorrow, how long would your family be able to live in the life style you have provided for them? The single greatest financial loss to you family would be the loss of your income. Some tiemes a consumer will purchase a $50,000 policy and think that's sufficient for their needs. But, in reality, how far will that go? Will it last one year? Two years? What will happen to your family then? Would you say that your family would need a $2,000 a month to cover the mortgage and living expenses? To provide $2,000 a month for 30 years, your family would need to receive a death benefit of $272,000. The annual cost of a typical cash value policy for that amount would be $3,411.(I can get the statistics on that). The annual cost for term insurance, is ready for this $485.20! If you are interested in simply discussing further more on insurance I can be reached at home 412-836-3348 Yvonne Watson ---------- 28-Jun-89 09:09 Donald.Schmitz Re: Insurance From: Donald.Schmitz@FAS.RI.CMU.EDU This is not meant to offend anyone, but the recent post on insurance sounded a lot like an A.L. Williams pitch, while being very careful not to sound like the commercial it obviously is intended to be. While the basic advice is sound, I'd like to warn people that outfits like A.L. Williams are known for selling high priced term life insurance and high-load mutual fund investments (source: Consumer Reports) - probably a better deal than cash-value life insurance but not nearly as good as you can do shoping for term life and investments yourself. From my own experience with A.L. Williams, they aren't very professional, can be quite annoying, and in general aren't the kind of people I'd want to trust with my life savings. Before buying insurance or investing in a long term savings plan, you should definitely shop around, check out the Consumer Reports articles on various life insurance companies and policies (there were 3 CR issues dedicated to life insurance, I think the summer of 1986, check the library), and read up on investments (all the investment mags - Fortune, Barrons etc. have annual reviews on the performance of various mutual funds). Don Schmitz ---------- 28-Jun-89 11:20 Betsy.Herk NOT GUILTY! From: Betsy.Herk@NATASHA.MACH.CS.CMU.EDU The recent, rambling post regarding insurance was NOT made by me. I made the mistake of letting a temporary person, Yvonne Watson, use my account for the purpose of composing letters. She made the post without my knowledge or consent, and I apologize for any inconvenience. ---------- 29-Jun-89 18:18 Hank.Walker Term Insurance From: Hank.Walker@taurus.ece.cmu.edu If you're interested in term insurance, perhaps the best bet for most people who read this bboard is to investigate the IEEE or ACM deals, which are pretty good.