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re: Whole Life Insurance Lapse Rate
Posted on 1/26/14 at 4:19 pm to GoCrazyAuburn
Posted on 1/26/14 at 4:19 pm to GoCrazyAuburn
Point remains that 80% don't get the death benefit. Yes you could agrue that that was their bad choice. But 80% is a huge number.
Something about Whole Life, or the way it is sold to people, who initially think they will enjoy a death benefit, but don't - something is rotten about it.
Something about Whole Life, or the way it is sold to people, who initially think they will enjoy a death benefit, but don't - something is rotten about it.
2
Posted on 1/26/14 at 4:28 pm to Stingray
Okay, you can blame bad selling, that is definitely a factor. However, tying the lapse ratio to actual return is dishonest at best.
However, I'll humor it. What does the lapse ratio have to do with WL being a bad product? If you purchased it, are you going to lapse it? If not, ten this whole conversation is worthless.
Term lapse rates are worse than WL. I would venture to bet the % of people who actually inves the difference in premiums is even worse. Does any of that change your return if you choose that strategy? No.
However, I'll humor it. What does the lapse ratio have to do with WL being a bad product? If you purchased it, are you going to lapse it? If not, ten this whole conversation is worthless.
Term lapse rates are worse than WL. I would venture to bet the % of people who actually inves the difference in premiums is even worse. Does any of that change your return if you choose that strategy? No.
Posted on 1/26/14 at 5:20 pm to Stingray
There is nothing rotten about it. Well some companies are. You're trying to tie in a return on the cash value in a whole life policy to the lapse ratio. It's apples and oranges. 80% of policies do not lapse unless your formula is real life, which it isn't. You'll also note in that report, lapses were very high the first years then leveled after that. A lot of that has to do with the upfront costs and people being impatient for the long run, or being sold incorrectly.
Like GoCrazyAuburn said. If you don't intend to lapse the policy then your argument is not valid.
Like GoCrazyAuburn said. If you don't intend to lapse the policy then your argument is not valid.
This post was edited on 1/26/14 at 5:25 pm
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