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Our life insurance blog is dedicated to providing you with valuable information from experts on the topics of insurance, financial planning and personal finance.

The SECRET of How to Win the Game of Life Insurance (Part 3)

By Byron Udel

 

Now that you know the SECRET to winning the game of life insurance (DIE WITH YOUR POLICY IN FORCE!), it’s time for some real world examples.

I told you earlier that The Secret can work with term insurance, universal life, or any other kind of life insurance.  Now I’m going to show you exactly what I mean.

Winning the Game with Term Life Insurance

On the surface, the only way to win the game with term life insurance is to do something you don’t want to do—die before you’re supposed to (dying young is not exactly ideal, at least not in my mind).  But even if you don’t die before your time, term might still work, but only if you’re smart enough to “convert” your policy to permanent insurance before  you lose the right to do so, and then hold on to the coverage long enough to die with it in force.

What about Permanent Insurance?

It costs more than term, but it DOES have a level premium for the rest of your life.

Consider this example:  I bought a policy last year…age 55.  1MM of coverage at a price of just over $10,000 a year.  Assuming I live to age 85, I will have made 31 payments of $10,000, or around $310,000.  My family will receive $1,000,000 tax FREE—for a gain of $690,000.  That’s an AFTER TAX rate of return of over 7%, and the pre-tax equivalent rate of return, at least for me, is well over 11%, and it’s a conservative, fully guaranteed contract, issued by a multi-billion dollar, A+ rated financial institution that’s been around for well over 100 years. 
 
And remember, that high return is if I die about when I’m supposed to.  If I die early, then my policy really pays off. The returns are astronomically high.  When I bought my policy, I tried to fathom a scenario under which I could live long enough to make the purchase a bad deal.  The fact is, I can’t.  Even if I live to 100, I still WIN the game.

Let’s look at another example, one that’s more representative of our average customers:  Age 43, female.  500K policy, LIFETIME guaranteed premium of about $2,500 a year.  Say she lives to age 86.  She will have paid in $2,500 times 43 years, or a total of $107,500.  Again, at her death, her family would receive $500,000 …tax free… for a net gain of $392,500.  The AFTER tax internal rate of return on that is over 7.5%.  The pre-tax equivalent is, again, right around 10 or 11%, depending on your tax bracket.

In today’s world of ZERO interest, where else can you go and get returns this high WITHOUT taking market risks?

The Choice is Yours

Some people ask, HOW can the life insurance company make any money on a policy where they’re returning a 7% rate of return if you die at life expectancy, and an astronomical return if you die early?  Especially when they’re only earning roughly 5-6% on the premiums you’re paying!

In case you weren’t listening, they DON’T make money on those policies.  Again, If YOU DIE WITH YOUR POLICY IN FORCE, the insurance company WILL LOSE money on it.  The people who buy—and DROP—their policies PRIOR to dying are the ones who subsidize the returns for people who are smart enough to DIE WITH THEIR POLICIES IN FORCE.  Look at it like this:  the losers pay the winners, and the house (the insurance company) takes a small cut.  I know it sounds crazy, but it really is that simple.  

Here’s the bottom line:  TO WIN THE GAME OF LIFE INSURANCE…you have to own a policy that you’ll be able to KEEP until you die.  Now for most of us, that means a policy with an affordable, predictable, and level premium for life.  

The choice is yours.  If you are going to own life insurance, you’re either going to WIN the game, or you’re going to LOSE the game.  We WANT our customers to WIN.  When you call us at 800-442-9899 or get a FREE quote on AccuQuote.com, we’ll tell you how to win, and give you simple ways to make that happen.  As always, it will be up to you as to whether you decide to take our advice.

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The SECRET of How to Win the Game of Life Insurance (Part 2)

By Byron Udell

 

We left off at the end of Part 1, where I had already shared the secret to winning the game of life insurance (DIE WITH YOUR POLICY IN FORCE!).  But even though the secret sounds so simple and obvious, we learned that so many people disregard it and lose the game.  Why and how does that happen?

Well, we all die, so obviously these people don’t lose the game of life insurance because they live forever.  They lose because their policies LAPSE BEFORE THEY DIE!

This can happen for a variety of reasons.  Sometimes, it’s because they no longer want the policy… maybe they’re divorced or they bought it for someone they no longer care about, so they intentionally drop the policy.  Sometimes, it’s because they run across some tough times, lose their job, and have some difficult decisions to make… like… should I feed my kids?…or pay this life insurance bill?  Obviously, that’s an easy decision.  Maybe there was a change in address and the life insurance carrier wasn’t notified, which would cause the insured to not receive bills and, in turn, cause the policy to lapse.

The bottom line on all these reasons—and others—is that the insurance company doesn’t care WHY they lapsed.  They’ve collected premiums for years… but they NEVER end up having to pay a claim on that policy.  In other words, they WIN and you LOSE. 

And the profits the insurance companies make on all these lapsed and expired policies actually SUBSIDIZE the ridiculously high rates of return for the people SMART enough to continue to own their life insurance and DIE with their policies in force (you can call this group of people the winners circle!).  

In Part 3, I’ll lay out exactly how to win the game with both a term and a permanent policy.  Stay tuned!

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The SECRET of How to Win the Game of Life...Insurance (Part 1)

By Byron Udell

 

This post is way overdue.  The message of “how to win the game of life insurance” is too important to just be getting to it now (I talk about it ALL the time; just haven’t blogged about it until now).  But better late than never, especially when it comes to life insurance.

I’m going to tell you a secret—a secret that I’m sure life insurance companies don’t want you to know.

While life insurance is not a game, many companies approach it this way, relying on strategy and statistics.

Unfortunately, most people LOSE this game of life insurance …and the life insurance companies need to keep it this way.

But I want my customers to win the game of life insurance, which brings me to the “secret.”

The “secret” isn’t about how much you pay, or what kind of life insurance you buy, or who you buy it from.  And the secret, which you’ll realize is so obvious once you hear it, can work with all kinds of insurance – term, whole life, universal life, or any other kind of life insurance.

I should probably first explain what I mean when I say “win the game of life insurance.”  It means that YOU—the consumer—comes out ahead and the life insurance company doesn’t.  In other words, you end up MAKING money when it’s all said and done instead of losing it.

Now, on to the secret …

DIE WITH YOUR POLICY IN FORCE!

That’s it, just die with your policy in force and you’ll win the game.  Sounds easy and obvious, right?

But trust me; there are SO many people who LOSE the game of life insurance.

Why do so many lose the game?!?  Check back for Part 2 and you’ll find out.  Learning how to win the game of life insurance is that important—I’ve just scratched the surface!

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The Health Insurance Problem in this Country is Getting Better, but it’s Still a Problem

By Byron Udell

 

Open enrollment for health coverage ends on Sunday.  With that in mind, let’s take a look at how our country is faring when it comes to health insurance.

According to statistics recorded by Gallup.com, 14.6% of American’s didn’t have health insurance back in 2008. Now, 7 years later, the number of Americans who don’t have health insurance has dropped to 12.9%. That means 87.1% of all Americans are now covered by some type of health insurance.

Things have improved, that’s obvious.  But there are still plenty without coverage (the percentage isn’t as large as it is for life insurance, but it’s still concerning).

Medical expenses in the U.S. are the highest compared to any other country, so having coverage helps you avoid huge bills.  Like life insurance, health insurance gives you peace of mind.  If you get sick or hurt, your savings won’t be drained.  

Having health insurance also encourages people to go visit the doctor at the first sign of trouble.  This means early detection of potential problems.

The scope of coverage is massive, too.  Depending on the finer points in your health insurance policy, you might be covered for any or all of the following:  outpatient care, emergency room treatment, hospital visits, prenatal and post pregnancy care, mental health support, counselling, prescription drugs, disability care, physical or occupational therapy, speech and language pathology services, psychiatric rehab, lab tests and even paediatric care.  

Why wouldn’t you get health insurance after seeing just how much it brings to the table? 

Lastly, having health insurance means you won’t have to pay a tax penalty at the end of the year.  

Learn more about AccuQuote’s health insurance offerings here

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The 3 Words That Can Help Everyone

By Byron Udell

 

Read.  More.  Books.

Simple enough, right?

I don’t mention books much in this blog because most of the books I enjoy and think are useful are not about life insurance. But make no mistake, I’m an avid reader.  I usually have at least two books in play at once. 

We can learn so much from books—about leadership, business, what works, what doesn’t. If you read the profile on me in the Chicago Tribune, you’ll see what I’ve read recently and some of my favorite books. I’ve been passionate about books my whole life. 

The following is an excerpt from the Jim Rohn Weekly Newsletter. Jim Rohn died in 2009, but left us a legacy of his words. In my mind, he’s in the self-improvement genre hall of fame, right next to Earl Nightingale, Tony Robbins, Brian Tracy, Dale Carnegie, and many more. Below are Jim’s exact words from his newsletter article titled appropriately, “Read More Books.”

All of the books we will ever need to make us as rich, as healthy, as happy, as powerful, as sophisticated and as successful as we want to be have already been written.

People from all walks of life, people with some of the most incredible life experiences, people that have gone from pennies to fortune and from failure to success have taken the time to write down their experiences so that we might share in their wealth of knowledge. They have offered their wisdom so that we can be inspired by it and instructed by it and so that we can amend our philosophy by it. Their contributions enable us to reset our sail based upon their experiences. They have handed us the gift of their insights so that we can change our plans, if need be, in order to avoid their errors. We can rearrange our lives based on their wise advice.

The important question is this: In the last 90 days, with this treasure of information that could change our lives, our fortunes, our relationships, our health, our children and our careers for the better, how many books have we read?

Why do we neglect to read the books that can change our lives? Why do we complain but remain the same? Why do so many of us curse the effect but nourish the cause? Those who wish for a better life cannot permit themselves to miss the books that could have a major impact on how their lives turn out. The book they miss will not help.

Reading is essential for those who seek to rise above the ordinary. We must not permit anything to stand between us and the book that could change our lives. A little reading each day will result in a wealth of valuable information in a very short period of time. But if we fail to set aside the time, if we fail to pick up the book, if we fail to exercise the discipline, then ignorance will quickly move in to fill the void.

Those who seek a better life must first become a better person. They must continually seek after self-mastery for the purpose of developing a balanced philosophy of life and then live in accordance with the dictates of that philosophy. The habit of reading is a major stepping-stone in the development of a sound philosophical foundation and is one of the fundamentals required for the attainment of success and happiness.

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