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POSTED BY : By Hank Coleman
Jan 27th 2014 11:00AM
Why Is My Broker So Eager to Sell
Me Whole Life Insurance?
A friend of mine recently complained
about an old college roommate who
was trying to pressure him into buying
a whole life insurance policy. He was
having trouble figuring out how to tell
him no, because they'd been so close
back then.
This is an all-too-common occurrence
for young professionals in their late
20s and 30s. This is the time when
friends and family are test-driving new
Why Are Your Friends Turning on
You?
But when people take that first sales job, they're not
likely to have a big, established client base to sell to.
So they turn to the contacts they do have -- friends,
family and coworkers -- whom they bombard with
pitches to buy products that might not always be the
best fit for them.
For many people starting off
in the financial services
industry, the mantra is "you
eat what you kill." They have
to sell their
product, insurance
policies, investments, broker
age services, etc., because
the lion's share of their
paycheck comes from
commissions on the sales
they bring in.
Whole life and term life insurance are two very distinct
and different types of insurance and financial products.
In fact, whole life is more of an investment for many
people who buy those types of policies.
Whole life insurance builds cash value while you're
paying those premiums. Eventually, after years of
premium payments, you build up a cash value in the
policy that often gives you many options.
The cash value becomes an asset itself. It can grow,
increase in value, and even pay dividends in some
cases depending on the type of policy you purchase.
Many whole life insurance policies let you borrow
against the cash value you've built up, cash out
completely, or even build up enough cash value where
it can make your premium payments for you. And your
Understanding the Difference between Whole
Life and Term
This accrual of cash value is the primary
reason that whole life insurance policies are
more expensive than term life insurance
policies, which do not build any cash value.
Term life insurance only covers you for the
length of the term you've bought the policy --
and for as long as you make the payments.
When the term is over (or you stop
paying), you have nothing to show for it.
Unless you die and your heirs collect the
policy, it simply expires, and you would have to
purchase new coverage if you want it.
So, if whole life insurance has inherent value and
is more an investment than an insurance plan,
why don't more people buy it? Probably because
life insurance is often a poor investment. While it
produces a low but steady annual return, other
types of long-term investments often outmatch
the gains you can earn from it.
See More :
http://www.dailyfinance.com/2014/01/27/whole-
life-insurance-pros-cons-hard-sell/
http://www.westhillinsuranceconsulting.com/