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Dear Everyone!
As the economy gets worse and worse(er) I am seeing a huge "flight to safety." People who have seen their 401s clobbered and who have seen their home values sink to below what they paid are swearing off the equity and real estate markets and are looking for a fair but safe return on their money.
Is life insurance an "investment?" I think it is. Anything you put money into and expect to get money out of is an investment. A car is. A house is. Maybe an oriental rug or painting is too.
Is it a taboo to say insurance is an "investment?" Yes it is. But as many times as the stockbrokers and TV investment talking-heads say it isn't... the truth is that it is.
You may not agree... but at least hear me out.
But first... let's revisit the Aetnarians one more time.
-Al
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Aetna... again!
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Many of you know about my dispute with Aetna over how they are agent-unfriendly and how they have instituted policies to seek our business... but not pay us a fair commission for it. I can't afford to work for free (or close to free) so all things being equal I have not written Aetna.
If I can get the same basic policy with the same deductible and with the same out-of-pocket maximum and for the same premium (give or take a few dollars) from Anthem (new name for Blue Cross) or from Blue Shield or from HealthNet, I do.
Why?
I'm perfectly up-front about it. They pay me more than Aetna does. All the major carriers except Aetna pay a 20% commission the first year. Aetna pays 15%. I think I'm worth the extra five points. Obviously, Aetna does not.
For the past year Aetna brought nothing special to the table. However in the past few months the Blues and HealthNet have had huge rate increases such that Aetna coverage, especially for those over age 55, is very, competitive.
For example I pay $424 a month for a Blue Shield plan with a $4,000 deduct. I can get a $5000 deductible plan from Aetna for $298... saving $126 a month or $1,512 a year. Same plan... but with a $1,000 more out of pocket. But I will save more than the $1,000, should I have a medical issue and need to use the plan.
So will I change to Aetna? Is Sarah Palin a babe (or Obama a hunk!)?
Of course, Aetna may lower the boom on everyone with their own huge rate increases later. You never know.
At any rate, if you have not had your health insurance reviewed in the past two years, you should call you agent and ask him or her what's out there that might save you money.
True, agents SHOULD contact YOU... but many don't. Why? Because they don't want to be accused of "churning" their book of business. It is a state law (a felony I think) and many don't want to run the risk. It can look suspicious if they call you soliciting a change... but it is perfectly proper if you call them. So make the call! You might save some serious money.
Of course all of this depends on whether or not you are insurable. This is why I tell people to get the best plan they can... because they may be stuck with it forever!
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Whole Life? Yes!
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One of the great no-no's of this business is to never mention life insurance in the same sentence with the word "investment." Well, when people were getting 8% to 12% and higher returns on their funds and 401's "the rule" made sense. But that was then... this is now.
I'll probably get into a little trouble with what I'm about to say... but someone needs to say it.
Traditional whole life... the kind where you pay into it year after year... where part goes to cover the cost of insurance and the rest is invested by the insurance company and they pay you interest and/or dividends... is not a bad "investment."
No one should put all their money into this vehicle (or any financial product) but a 3% to 6% return compounded over many years with no possibility of loss (there is always a guarantee... usually 3%) simply beats hell out of what the equity markets are offering.
Well of course all my stockbroker friends yell and scream "This market is an aberration. It will all come back again."
Yeah? And they know that how? Those of us who have a bit of gray hair (if we have any left!) well-remember the stagnant markets between 1971 and 1981.
Tell me that we won't have ten years of no-growth or negligible growth. Tell me how... with all the economic problems... the banking mess... the weak dollar... inflation... rising interest rates... the credit mess... the housing mess... the energy mess... we have, that the markets are going to go bull again? I'd like to know how this would happen. I really would.
In the meantime you can "invest" some of your money and not only protect your family from going into poverty if someone dies... but you will get a fair and tax-favorable return on your money with almost zero risk.(Do you really think a 100+ year old company like MassMu is going to go paws up?)
It's called whole life... not term life... not guaranteed universal life (as opposed to accum UL which is another animal.) If you "invest" some money in a solid John Hancock or Mutual Trust Life or Mass Mutual or New York Life policy you can sleep well at night.
No, you won't make a killing, but as I've said here a million and one times (and will continue to do so) at the end of the day, week, month, year, or life, your net worth will not depend on how much you made... but by how much you didn't lose... and were able to keep from the taxman.
I've been seeing a lot of interest in whole life... it is part of the "flight to safety" and quality on the part of a lot of people in their 40s and 50s who don't want to end up like those in their 60s and 70s who put all their nickels and dimes in the stock market and only have pennies to show for it.
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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