Something else to discuss with clients

[kcjenkins]

http://www.taxprophet.com/newsletters/0905nl.html

If you don't subscribe to this newletter you probably should, but at a minimum, read this one.

[bstaxes]

Yup, I got caught on this one. One policy was supposed to pay for the another policy (taken out in the early 90's). Out of site out of mind. I never got a bill and thought everything was going along nicely. Recently new agent called to go over policies. Boy what a shock, lost both policies and one was an annunity. Insurance company would do nothing to help straigten it out. Although I could pay a few thousand $$$$ to keep one policy.

[JohnH]

I think it highlights the wisdom of "buy term & invest the difference." When insurance companies try to fool people into mixing insurance and investment objectives, they aren't doing anyone any favors (except the company & agent, of course).

I keep asking my agent (on those rare occasions when he talks to me), that if insurance which builds cash value is such a good deal, why don't they offer it on cars & houses? The answer is obvious - auto insurance and homeowners insurance is a rational purchase based on cost vs benefit, whereas life insurance carries an emotional component that lures people into making irrational buying decisions.