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Started By
Message
re: Whole Life Insurance Lapse Rate
Posted on 1/26/14 at 10:11 pm to GoCrazyAuburn
Posted on 1/26/14 at 10:11 pm to GoCrazyAuburn
quote:
I'll rephrase what you just tried to say. 90% of term policies lapse before they can pay out. Therefore 90% of people who buy term insurance have made a terrible financial decision.
Apples and oranges and you know it. I have already explained why this is a bad comparison previously in this thread when you first brought up term life.
1
Posted on 1/26/14 at 10:13 pm to Stingray
quote:
To me, this is like saying the quality of the pitcher has no bearing on whether a hitter gets a hit or not, getting a hit is entirely within the control of the hitter.
No. The reason I say it is a starting point is because projecting past results as a perfect indication of future results isn't wise. quote:
I believe that the high lapse ratio of WL is directly related to the aggressive salesmanship of agents who sell to people who are either too dumb to understand they should hold on to the policy forever, too dumb to realize what they are buying so they change their mind and drop it, or are too poor to afford it over their lifetime.
Ah, finally, you've stumbled into the correct realization. People don't understand the product, agents are dishonest, and sell it to people who are not in the situation to need or afford it. Thank you for finally admitting it. None of this makes WL bad. It makes agents who don't do their job bad.
A much more accurate way to interpret the study (though i'll disagree with the overall number) is 80% of people shouldn't have been sold WL. Obviously this isn't an accurate number considering the most lapses are after year 10 when the lapse could be due to surrendering the policy for its cash.
This post was edited on 1/26/14 at 10:23 pm
Posted on 1/26/14 at 10:15 pm to Stingray
quote:
Apples and oranges and you know it. I have already explained why this is a bad comparison previously in this thread when you first brought up term life.
Well, if you want to keep only referring to receiving death benefit as your investment return, then no, they are comparable. A lapse is a lapse. It doesn't matter if it is term or WL.
Posted on 1/26/14 at 10:21 pm to GoCrazyAuburn
quote:
Ah, finally, you've stumbled into the correct realization. People don't understand the product, agents are dishonest, and sell it to people who are not in the situation to need or afford it. Thank you for finally admitting it. None of this makes WL bad. It makes agents who don't do their job bad.
Okay. How do know if I am in the 80% of idiots or the 20% of smart people? You have already admitted I can't trust my agent. All I have to go on is the lapse rate. Which is 80 fricking percent.
Posted on 1/26/14 at 10:29 pm to Stingray
quote:
Okay. How do know if I am in the 80% of idiots or the 20% of smart people?
Do your homework. Budget properly. Avoid being the lapse due to not being able to pay. If you don't like WL on the principle of its design, then don't buy the product. What if you are one of those who surrenders the policy from year 30-50? You'll get your money back plus interest. Or what if you use your dividend to pay your premium and you get all your cash value tax free?
quote:
You have already admitted I can't trust my agent.
link? I said there are bad agents. That doesn't engulf everyone.
Look, if you want to buy term and invest the difference, go for it. The lapse rate isn't going to change your ability to keep your policy. If you think WL is something worth keeping, you'll find a way to do it. If you think it is a poor product, which you obviously do, then don't buy it. Basing your decision on what others do is just foolish though.
ETA: as I've already said, you are trying to blame WL policies for lapses. This is a completely flawed argument.
This post was edited on 1/26/14 at 10:34 pm
Posted on 1/26/14 at 10:36 pm to GoCrazyAuburn
Thank you for giving your thoughts on whether 80% is the right number.
I understand everything you are saying and at the same time, the lapse rate affects my decision. Sorry I couldn't explain why better to you.
I understand everything you are saying and at the same time, the lapse rate affects my decision. Sorry I couldn't explain why better to you.
Posted on 1/26/14 at 10:37 pm to Stingray
Posted on 1/26/14 at 11:53 pm to Stingray
If you at least double the contribution rate, you are on the smarter side. If you pay min each month then you will be the 80 percent statistic.
Posted on 1/26/14 at 11:57 pm to LSUregit
Also buy a $500,000 policy are larger. By doing so, you are significantly less likely to lapse the policy.
Posted on 1/27/14 at 8:25 am to GoCrazyAuburn
quote:
Also buy a $500,000 policy are larger. By doing so, you are significantly less likely to lapse the policy.
I am assuming the lapse rate is lower on people buying a big policy.
You just finished going post after post trying to convince me that only the policy buyer determines whether he gets to the DB. Factors like policy buyer education and wealth. You were adamant that lapse rate should not factor into your thinking.
Now you are advising to buying a bigger policy based on the lapse rate?
Posted on 1/27/14 at 9:06 am to Stingray
Put on sarcastic glasses and that post makes a lot more sense.
Posted on 1/27/14 at 9:18 am to GoCrazyAuburn
okay
glad we are still on the same page
glad we are still on the same page
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