A Primer On Life Insurance For Mothers

One of my client's wives paid me a visit to ask about life insurance, , New Car Insurance Costs a product I was well acquainted with. She told me that she and her husband were visited last night by a life insurance , Effectiveness Of A Cheap Loan agent. "Jan, what did he try to sell you?"

"A $90,000 whole life policy with an annual premium , A Real Life Case Study Another Happy Customer of $500. Is that okay?"

Knowing that few people really understand life insurance, , The Flip Flop Asset Allocation Method I asked her if she really understood what the agent was talking about.

"I thought I did last night," she replied, "but when I woke up this morning, I wasn't so sure. That's why I'm here. You once told me to never buy life insurance , Bad Credit Mortgage Tips Is It Wise To Consolidate Debt With Home Equity Loans unless I talked to you about it. Well, I'm here. Could we chat about it?"

I was glad that Jan was here instead of Mark. I have learned that it is much easier to talk to women about life insurance , What Is Value Investing than men. Women seem to better understand the financial , How To Automate Your Collections consequences of their spouses' death, especially if they are mothers. Most men, however, don't want to face life insurance , Free Credit Reports Are Not Always Free because they think that they will never die. Women know better.

I was no stranger to the murky world of life insurance. , Debt Consolidation Donts You Should Know About Throughout my 20 years as a CPA, I'd often locked horns with insurance , Bad Credit Mortgage Tips Is It Wise To Consolidate Debt With Home Equity Loans agents and financial , What Is Value Investing planners who wanted to sell garbage life insurance , What Is Value Investing products to my clients. In my role as a CPA, I always believed that it was my job to act as a mother hen and protect my clients from the wolves.

I began by asking Jan a question that zooms to the heart of the matter. "Tell me Jan, why are you buying , Compound Interest Doesnt Add Much To Your Wealth life insurance? What do you hope to accomplish?"

She answered, "To protect me and the children in case Mark dies."

That quickly established the fact that Jan knew about the key issue: that life insurance , Spanish Mortgages Check Your Property Paperwork has but one purpose: protection in case disaster strikes.

Then I asked her another question. "Just suppose that you knew for sure that Mark was going to die tomorrow. How much life insurance , Quit And Retire Three Years Earlier would you buy , Pointers In Hiring A Real Estate Agent on his life ---$90,000 or $450,000 --- assuming the premiums were identical?"

She looked at me as if I was crazy. "I'd buy , Online Payday Advance the $450,000 policy. Who wouldn't?"

I then gave Jan a quick education about life insurance, , Bankruptcy Which Chapter Do I File explaining that there are only two kinds of life insurance, , Credit And Debt Management term and cash value. , Quit And Retire Three Years Earlier The problem is knowing which one of them is the better buy. , Day Trading Stock Pick Stock Trading Secrets Onlinetrading System

Term insurance , Quit And Retire Three Years Earlier is pure insurance , Bad Credit Is No More A Hurdle For You Go Get A New Car ( protection) coverage. If you pay , Profitable Trading System the premium , Tips To Avoid Gaining A Bad Credit Rating With Your Mortgage and die , the insurance , Can I Get A Home Loan With Past Bankruptcy company will pay , The Flip Flop Asset Allocation Method the face value , Online Health Insurance The Truth About Cheap Quotes of the policy to your beneficiary. It is available to age 95 and can be purchased yearly, or on a guaranteed level premium , Mortgage Refinance Look For Better Terms basis for 5,10,15, or 20 years. The product is uncomplicated and very inexpensive. , How To Find The Best Debt Consolidation Secured Loan The premiums, however, do increase each time the policy is renewed since the insured has grown older.

Cash value life insurance , Buy To Let Mortgages To Let In Reasonable Capital Growth With Financial Obligation (sold as whole life, endowment, straight life, permanent life, universal, and a zillion other names) is the second type. It differs significantly from term because there is a savings , Online Health Insurance The Truth About Cheap Quotes or investment , Credit And Debt Management feature attached--the cash value. , Why Cyprus Is A Good Investment About 75% to 80% of every premium , Debt Consolidation Donts You Should Know About dollar goes to this cash value , Quit And Retire Three Years Earlier "kitty" and the remainder pays , Can I Get A Home Loan With Past Bankruptcy for the actual life insurance , Debt Management Support protection. These policies typically last to age 100 and the premiums remain level for one's entire life.

Thus, in one slick package, a cash value life insurance , Financial Freedom In 5 Steps policy claims , Speedy Funds Available With Instant Loans to accomplish two worthy goals: death protection and family savings. , Debt And Bill Consolidation Program Lenders Help With Yourloans It was my job to convince Jan that cash value insurance , Why Cyprus Is A Good Investment fails miserably on both counts and that she must, for her and her children's sake, buy , The Curve Drawdown A Sensitive Aspect Of Stock Trading pure term life insurance , Compound Interest Doesnt Add Much To Your Wealth and nothing else.

"Jan, there are two reasons why you must not buy , Effectiveness Of A Cheap Loan that whole life policy or any other cash value , Refinance Car Loans Refinancing Your Car Loan Online Is Convenient product. First and most importantly, cash value life insurance , Debt Who Is To Blame is anywhere from five to ten times more expensive , Who Can Get A Payday Loan than the equivalent amount of term insurance. , Online Health The Truth About Cheap Quotes It's like paying , Debt Management Support $75,000 for a $15,000 automobile just because you went to the wrong dealership."

To keep their customer's attention away from the high cost , Types Of Loans of cash value, , The Advantages Of Day Trading agents focus their sales spiel on the investment , Mortgage Refinance Look For Better Terms feature, usually with the aid of reams and reams of incomprehensible computer printouts. This sales tactic has literally duped the American public out of trillions of dollars in the last 150 years, ever since cash value , Bad Credit Is No More A Hurdle For You Go Get A New Car was invented.

"Jan, how much time did the agent spend , Debit Cards Vs Atm Cards Is Convenience Really Worth It In The End last night talking about the actual insurance , What Is Value Investing protection versus how much money , The Effective Role Of The Income Statement you'll earn from the cash value , Online Homeowner Loans Technology For Convenience policy?"

She thought a bit before answering. "Well, he spent the whole evening going over a bunch of computer printouts that showed us how rich , Profitable Trading System we'd be in fifty years when we retire, and how much we could borrow from the policy if we ever needed a loan. , Debt And Bill Consolidation Program Lenders Help With Yours "

"But what did he say about your protection needs?"

"Come to think about it, hardly anything at all. After we told him that we could afford a $500 yearly premium, , Debt And Bill Consolidation Program Lenders Help With Yourloans he looked in a book and said that he had found a great $90,000 whole life policy that we could afford. But about protection, he really said very little." I could tell that she was starting to bristle in anger, a sign that I was doing a good job.

I then told Jan that people with children living at home , Buy To Let Mortgages To Let In Reasonable Capital Growth With Financial Obligation should have, as a rule of thumb, about eight to ten times their yearly gross income , Why Cyprus Is A Good Investment in life insurance , The Advantages Of Day Trading protection. For Mark and Jan, that translated into at least $475,000. The agent who met with them should have figured that out and done his utmost to assure such adequate protection.

"You see Jan, that agent's sole emphasis should have been on your financial , Why Cyprus Is A Good Investment protection in case Mark dies tomorrow, not about making you a rich , Debt Management Support lady in 50 years. The agent's decision to sell you the anemic whole life policy would literally rob you and your kids of $385,000 if Mark dies tomorrow."

"But Mark is not going to die tomorrow. Don't say that!"

"Jan, you don't know that. He could die tomorrow or in a week from any one of a thousand and one different causes. And so could you or I. That's why you must be fully protected right now. Life insurance , Online Homeowner Loans Technology For Convenience is a today need."

I continued..."Jan, remember when I told you that there were two reasons to avoid cash value , Debt Who Is To Blame life insurance?"

"Yes."

"You told me Jan that the agent spent most of last night talking about the wonders of the cash value investment. , New Car Insurance Costs Now I am going to give you the real scoop about that." This one always puts the final nail in the cash value , Types Of Loans coffin.

"The cash value, , Compound Interest Doesnt Add Much To Your Wealth " I continued, "is not like an ordinary investment , Free Credit Reports Are Not Always Free such as stocks, , Online Health Insurance The Truth About Cheap Quotes bonds, , Compound Interest Doesnt Add Much To Your Wealth or a bank , Effectiveness Of A Cheap Loan savings account. , The Flip Flop Asset Allocation Method "

"But the agent said it was just like a bank , Online Payday Advance savings account. , Compound Interest Doesnt Add Much To Your Wealth .."

"It resembles a savings , Profitable Trading System account about as much as a shark resembles a goldfish. Tell me Jan, what do you think happens to the cash value---the promised pot of gold---if Mark dies? Who gets it?" The fun starts...

"That's easy," she replied, "I do...it's our money. , Dallas Mortgage Refinance ..our investment. , Debt Consolidation How To Avoid Bankruptcy ..right? Marsh...tell me I am right!"

"Sorry, you are wrong. If Mark dies, the insurance , Day Trading Stock Pick Stock Trading Secrets Onlinetrading System company keeps it. That means that all that extra premium , Bad Credit Used Car Loan Financing Tips you paid for so many years goes up in smoke."

"So what do I get if Mark dies?"

"You get the face amount of the policy...but you could have gotten that for a fifth of the premium , Pointers In Hiring A Real Estate Agent with a term policy."

"Marsh...you can't be serious. In my worst nightmare, I would not expect something like this. Are you sure?"

"Very. But if you want some proof of your own, get the book What's Wrong With your Life Insurance , Quit And Retire Three Years Earlier by Norman Dacey. That's just one of many books in the library that echoes what I have been yapping about. Don't think I am the Lone Ranger on this."

Apparently she got fed up. Her voice rose as she said, "The agent never said word one about any of this! Are you telling me that he bent our ears off last night just to sell us a chump change policy that will leave me seriously underinsured just so he could make a bigger commission...and that they steal my investment , Business Cash Advance The Easy Way To Finance Your Business to boot if Mark dies?"

"That about hits the nail on the head. And one more thing...when you tell the agent you want a term policy instead, expect another visit from him. Be aware that they are very well trained in changing minds. Plus, you might want to shop around for the best deal. Even among term policies there is a wide variance in price. , Debt Management Support "

End

Postscript:

It is this author's hope that anyone in possession of this article pass it onto their relatives, friends, and neighbors. The information in this article can put many thousands of extra dollars in the bank , Debt Consolidation Donts You Should Know About accounts of those who need it most.

Copyright 2000
Marsh Kaminsky CPA (retired due to disability)
e mail: Thetermite@aol.com

Because of Multiple Sclerosis, I am a retired CPA. Besides my interest , Bad Credit Mortgage Tips Is It Wise To Consolidate Debt With Home Equity Loans in life insurance, , Getting Out Of Credit Card Debt I have a very strong interest , Compound Doesnt Add Much To Your Wealth in early preschool learning.