The 30 day war!
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Your both are making WILD assumptions. She might need 100k, that’s it. 500k is over kill to fill your pockets with an extra dime. 9 times out of 10 there is no damn 22 year old in the world that needs 500k.
Her saving for retirement early is a much better decision. She can buy more term when she get's older. PLUS .. you insurance guys always try to over insure people. ALWAYS. "you need 10x you annual salary" Right.... forget to mention the tax free nature of insurnace and that salary she would have gotten was taxed did ya? Good for you for being honest.[quote=hotair1]Your both are making WILD assumptions. She might need 100k, that’s it. 500k is over kill to fill your pockets with an extra dime. 9 times out of 10 there is no damn 22 year old in the world that needs 500k.
Her saving for retirement early is a much better decision. Explain this to me. She's 22, so retirement isn't for another 40 or so years. Why would saving for something 40+ years away be so much more important than covering something that may be a necessity within 1, 5, 8, 12, or 17 years? Is that $30/month going to shoot her retirement savings plan down like a sniper gun? She can buy more term when she get's older. You're saying he should have her go back through underwriting every 3 years when her "need" increases? Why not just knock most of it out at once when the price difference is only a couple bucks a month, AND she is healthy enough to get the stuff. PLUS .. you insurance guys always try to over insure people. ALWAYS. So? Better than being underinsured. [/quote]I don’t even sell insurance - at all. But even I recognize the need.
I’m not making wild assumptions. I don’t know this girl’s case. I did not do a fact finder on her.
The simple fact is, none of us know. Young people die every day. More people died between 18-22 years of age in vehicle accidents last year than in Iraq and Afghanistan combined. Several of those 18-22 year-olds had kids.
For someone to say that 22 year-olds don’t need life insurance as a blanket statement is incorrect.
Not very many extra dimes evidently. You’ve got to think longer term with this stuff.
You are technically correct. She doesn't NEED a $500k term policy. However, once she gets it, she's got it. There are a lot of what if scenarios that come up where owning this policy now is a big benefit. For example. I have a 50 year old prospect with Leukemia. He's got a 20 year convertable term policy that he bought about 18 years ago. He knows it's going to end in a couple of years, but he's uninsurable now. He and his wife blew all their money a few years ago when he thougth he was going to kick the bucket. Turns out he's doing well, but he's really behind the retirement savings 8-ball. His concern is for his wife. What if his Leukemia comes out of remission 5 years from now, after the term policy has ended, he dies and leaves his wife behind to pick up the pieces? He knows they don't have the money to keep her in their house living the lifestyle she's used to. So, he's going to turn his term into permanent so that if it happens she's not thrown out on the street or forced to sell the house at a deep loss to lower the bills. He's uninsurable right now, so it's not like he can go out and get a new policy to replace the one that's ending. So, no, she doesn't need the policy, but life happens. Our job is to mitigate risk. $1 a day mitigates a lot of risk.[quote=Spaceman Spiff]For example. I have a 50 year old prospect with Leukemia. He’s got a 20 year convertable term policy that he bought about 18 years ago. He knows it’s going to end in a couple of years, but he’s uninsurable now. He and his wife blew all their money a few years ago when he thougth he was going to kick the bucket. Turns out he’s doing well, but he’s really behind the retirement savings 8-ball. His concern is for his wife. What if his Leukemia comes out of remission 5 years from now, after the term policy has ended, he dies and leaves his wife behind to pick up the pieces? He knows they don’t have the money to keep her in their house living the lifestyle she’s used to. So, he’s going to turn his term into permanent so that if it happens she’s not thrown out on the street or forced to sell the house at a deep loss to lower the bills. He’s uninsurable right now, so it’s not like he can go out and get a new policy to replace the one that’s ending.
So, no, she doesn't need the policy, but life happens. Our job is to mitigate risk. $1 a day mitigates a lot of risk. [/quote] This kind of stuff happens all the time. I remember about 18 months ago I'd scheduled a meeting w/one of my clients to go over long term care options. They both indicated during their initial meeting that they were both interested at some pt. in looking at some options. Turns out they cancel the meeting. Why? Because the husband went in for a physical and they found a clogged heart valve that needed open heart surgery. The condition is now chronic and he's uninsurable. He's only 53, and most likely wouldn't NEED nursing home care for another 20-25 years minimum otherwise, but now we just have to hope it never becomes an issue.If she’s hot you should bone her and send her on her way. Be a lot more fun than schlepping a term life app. that only has a couple hundred in annualized life premium.
[quote=3rdyrp2][quote=hotair1]You insurance guys are idiots. This chick does not need 500k in life insurance. She MAYBE needs disability insurance. Set her up a nice little roth, a small amount of disability insurance, and make sure she is using her 401k at work. You’ll get business down the road and hopefully she’ll refer you to her parents. With no dependents and at 22 she does not need freaking life insurance and won’t be able to vizualize her future need for it so she is likely to cancel the policy at age 23 anyway.
My god, 500k term insurance. IDIOTS! ANANOLOSER, save me the drama of your long winded hypothetical reason she needs it.[/quote] Here's why you're the idiot: At age 22 how much will a $500,000 term policy cost? $30 a month? If she decided not to get life insurance where would that $30 be going? Starbucks? The mall? Something that doesn't make her financial situation better? More than likely that same $30 wouldn't be systematically being saved somewhere, and even if it was, its $30 freaking dollars. In 3 years the girl is married and is buying a house. Now she has an insurance need of anywhere from $500,000-$1,000,000. 2 years after that she has a kid, and now all of a sudden her insurance need is an extra $500,000-$1,000,000. Please explain the rationale why it is insane to buy a small insurance policy a couple years before you actually need more than that? You're locking in future insurability knowing that within a couple of years it will be imperative to have that coverage in force. How much do you think we make on a $30/month term policy? I would make $200 GDC on that, and net $75 payout on that. We ain't getting rich off the stuff, its doing whats best for the client.[/quote]$1 million dollars at 22?! Kids at 27? $ 2 million of life insurance at 27 for a stay at home mom?! Dude, you are out of your mind. You must sell a sh*tload of insurance with that level of conviction. Yikes
[quote=3rdyrp2][quote=BerkshireBull][quote=anonymous]BerkshireBull, I have to completely disagree with the UL suggestion. UL is a product that absolutely sucks long term. The flexibility that is looked upon as a positive is one of the worst parts about the product. Human nature gets in the way. If a premium payment isn’t necessary, one may get skipped. Skipping premiums drasitcally increase the chance of lapse. At $40/month for $100,000, ultimately, she will end up with no cash and no insurance when she gets older. If her health changes, her family will have a Mom that is drastically underinsured.
At this point she is much better off buying a $500,000 term policy that is less than $20/month and putting the balance into savings.[/quote] There is no way underwriting is going to let you write that much face value on a single 20 year old with no dependents making $15,000 per year.[/quote] I think I'd beg to differ on this one. I think she's 22, but you can get a half mil term policy on someone earning $15,000. Their human life value is over half a mil if they have the SAME salary until age 65. Underwriters will understand too based on age that within a year or so that person will be earning much more than $15k.[/quote] Most companies will only go up to 25x annual income.[quote=svm21] [quote=3rdyrp2][quote=hotair1]You insurance guys are idiots. This chick does not need 500k in life insurance. She MAYBE needs disability insurance. Set her up a nice little roth, a small amount of disability insurance, and make sure she is using her 401k at work. You’ll get business down the road and hopefully she’ll refer you to her parents. With no dependents and at 22 she does not need freaking life insurance and won’t be able to vizualize her future need for it so she is likely to cancel the policy at age 23 anyway.
My god, 500k term insurance. IDIOTS! ANANOLOSER, save me the drama of your long winded hypothetical reason she needs it.[/quote] Here's why you're the idiot: At age 22 how much will a $500,000 term policy cost? $30 a month? If she decided not to get life insurance where would that $30 be going? Starbucks? The mall? Something that doesn't make her financial situation better? More than likely that same $30 wouldn't be systematically being saved somewhere, and even if it was, its $30 freaking dollars. In 3 years the girl is married and is buying a house. Now she has an insurance need of anywhere from $500,000-$1,000,000. 2 years after that she has a kid, and now all of a sudden her insurance need is an extra $500,000-$1,000,000. Please explain the rationale why it is insane to buy a small insurance policy a couple years before you actually need more than that? You're locking in future insurability knowing that within a couple of years it will be imperative to have that coverage in force. How much do you think we make on a $30/month term policy? I would make $200 GDC on that, and net $75 payout on that. We ain't getting rich off the stuff, its doing whats best for the client.[/quote]$1 million dollars at 22?! Kids at 27? $ 2 million of life insurance at 27 for a stay at home mom?! Dude, you are out of your mind. You must sell a sh*tload of insurance with that level of conviction. Yikes
[/quote] Whoa, whoa, whoa. I didn't say $1,000,000 at 22. I said its not UNREASONABLE to sell someone a $500,000 policy at age 22. Its also not unreasonable to have a kid at age 27. And why is she a stay at home mom? Where did all these assumptions come from? If she is married with a mortgage and a kid at age 27, depending on her income (I work in DC, where incomes are very high and so are mortgages, and the concept of "stay at home mom" has gone the way of the Dodo bird) her insurance need could EASILY be $2,000,000. It's not extremely common, but it happens.
Impossible. No 27 year old needs $2 million. Unless you are a I-banker at Goldman, own a nice apartment in the East Village, and have a wife with three kids under the age of 5 at home. If your not that guy/girl then you don’t need that much. Please. Drink the kool-aid. Go ahead drink it. We know you like it.
I get the vibe that insurance doesn’t play that large a part in your book of business.
It once did. Im a former NWM guy. Great company, notoriously expensive polices.
Here’s a fun fact about me: I’ve never sold a policy of over $1,000,000. Only twice have I recommended anything over $1,000,000 to a client. I personally think that if one of my clients died, the spouse/children/heirs would get by on a million bucks. They don’t need to pay the mortgage off right away, they don’t need to max fund retirement right away. I think they’ll get by. My thing is, I can see how having that additional insurance would reduce ALL of the burden that a family does not need, but will face, at a difficult time like that. The last thing a new widow/widower needs is to all of a sudden be stuck w/a $750,000 mortgage, two kids and $100,000 less income coming into the house. A half million bucks isn’t going to eliminate that burden. A million bucks may not even be sufficient long term.
Good point. However if they have a 750k Mortgage and the other spouse was only making 100k. Well then they never had a chance. Darwinism at its best. Poor kids.
Just kidding, point made.
[quote=hotair1]You insurance guys are idiots. This chick does not need 500k in life insurance. She MAYBE needs disability insurance. Set her up a nice little roth, a small amount of disability insurance, and make sure she is using her 401k at work. You’ll get business down the road and hopefully she’ll refer you to her parents. With no dependents and at 22 she does not need freaking life insurance and won’t be able to vizualize her future need for it so she is likely to cancel the policy at age 23 anyway.
My god, 500k term insurance. IDIOTS! ANANOLOSER, save me the drama of your long winded hypothetical reason she needs it.[/quote] One of the first death claims that I paid was on a guy in his late 20's. He was about 25 and single when he bought a life insurance policy from me. Not too long after that he knocked up his girlfriend and they got married. Before the baby was born, he found out that he had cancer. He died shortly after having his child. One can't buy insurance just because they need it. One can only buy insurance at decent rates when they can prove that they aren't dying and they are healthy. Insurance is purchased with one's health and not dollars. The question really needs to be whether the purchase of insurance is worthwhile to protect a future insurance need. If insurance was free, should she get it even though it's not needed yet? Of course. If it was $1000/month, should she get it? Of course not. What if it was less than $15/month? Gentleman, for a healthy 22 year old female, an annually renewable $500,000 convertible term policy costs less than $15/month. Every week, I talk to at least one person who needs coverage and can't get it at decent rates. Is it worth $15/month to protect one's insurability? It sure seems like a no brainer to me. Policies get canceled because people can't afford them. $15/month policies don't get canceled. Maybe disability insurance? Unless she doesn't need income, there should be no maybe in front of disability insurance.[quote=hotair1]Your both are making WILD assumptions. She might need 100k, that’s it. 500k is over kill to fill your pockets with an extra dime. 9 times out of 10 there is no damn 22 year old in the world that needs 500k.
Her saving for retirement early is a much better decision. She can buy more term when she get's older. PLUS .. you insurance guys always try to over insure people. ALWAYS. "you need 10x you annual salary" Right.... forget to mention the tax free nature of insurnace and that salary she would have gotten was taxed did ya? Good for you for being honest. [/quote] Extra dime? The ANNUAL premium for $100,000 is $91. The premium for $500,000 is $150. It should be pretty obvious that this has nothing to do with commission. Do you really believe that this has any impact on how much she saves for retirement? As for the 10x salary, using a multiple isn't a smart way to determine need, but it sounds like you think that 10x is some big number. 10x isn't a big number. Joe makes $100,000 and is 30 years old with 3 young kids. If his income increases on average by 4% a year, his total income would be over $7,000,000. If his income is replaced by a lumpsum of $1,000,000, his wife can probably safely take an income from it of $40,000 before tax. That's a pretty big income hit. Don't forget that money from this also needs to be invested for retirement to replace his 401(k) and the match. In some situations 10X will be plenty. Other times, it won't be. It isn't a big number. Also, since term life insurance is so cheap, when in doubt about insurance premiums, shouldn't one buy too much instead of too little? If he's healthy, a 20 year policy for $750,000 would cost $322. $1,250,000 would cost $485. Why would we recommend that someone pinch pennies in this situation? The extra $500,000 of coverage is $13/month. Much of what I sell is combinations of whole life and term insurance. In this case, the premium (and my commission) is identical regardless of how much coverage is purchased."$1 million dollars at 22?! Kids at 27? $ 2 million of life insurance at 27 for a stay at home mom?! Dude, you are out of your mind. You must sell a sh*tload of insurance with that level of conviction."
We're making lots of assumptions here. How much coverage should a stay at home mom have? We're missing facts, but I would argue that the amount is usually greater than someone thinks. Why does someone choose to be a stay at home mom? It's often because that is what the family thinks is best for their situation. They want a parent to be home raising the kid. In these situations, what happens if the mom dies? Ideally, the dad can be a stay at home dad. This doesn't need to be permanent, but raising the kids does need to take precedence over making money. Life insurance allows the kids to come first. Life insurance on a stay at home mom serves the purpose of replacing the bread winner's income. Again, I can't state it enough, since the cost of term insurance is so cheap, it makes sense to buy enough to make sure that the family can thrive instead of just enough to survive.Won't $2,000,000 give a family a safe income of around $80,000 a year before tax? This is a ton of money for someone making $40,000. It's not so much for someone making $150,000 with plans to send the kids to private school.Impossible. No 27 year old needs $2 million. Unless you are a I-banker at Goldman, own a nice apartment in the East Village, and have a wife with three kids under the age of 5 at home. If your not that guy/girl then you don’t need that much. Please. Drink the kool-aid. Go ahead drink it. We know you like it.