Conference nyoss1::market_investing

    re: .0
    
    I agree with your analysis.  In general I believe life insurance should
    be treated as insurance, not as an investment.  If you pay the lower
    premium and invest the difference yourself you'll almost certainly come
    out ahead.
    
    Or, at least, that's my opinion.

  I was faced with this same choice 5 or 6 years ago. A company called 
  A.L. Williams (buy term and invest the difference) wanted me to buy a
  term policy. At the same time John Hancock wanted me to buy U-Life.

  Though I agree that my life insurance co. should not be my investment
  broker, I went with the U-Life.

  Reason: The cost of the "term" portion of the U-Life policy was quite
  a bit lower than straight term. I had to really press John Hancock to
  give me the break down but they finally did. Also, it was a flexible 
  premium policy. I could pay whatever I wanted to keep the policy in force.

  The premiums that they like you to pay up front tend to be VERY high.
  Thats because their expenses are front-end loaded. Though I didn't like this
  I did it for a few years. $800 a year for 3 years.

  I haven't made a payment since. The return on the investment covers the
  cost of the insurance plus expenses. Needless to say this really
  makes my insurance saleman mad because he gets commisions based on
  how much I pay each year.

  I have been at a breakeven point for a few years now with a few thousand
  worth of accumulation fund to go. If it gets to low, I'll pump a little more 
  money into it and stop payments again for a while. Their analysis based on
  current rates says if I don't make any payments the policy will lapse in
  something like 10 years. No problem!

  The point of this long-winded note is that you should buy the cheapest 
  insurance you can get no matter what the insurance type.
 
  Funny you should mention Primerica(sp?). They bought out A.L. Williams
  who was the king of "buy term and invest the difference"

  Pat

There is literally a factor of 10 difference between the lowest
rates and the highest rates.

With any insurance, you want to get into the insurance pool with
the toughest health requirements.  Insurance plans with open enrollment
tends to have the highest rates.

Gim

    I need to get some info. on IEEE term insurance. My biggest concern is
    the renewal policy i.e. what kind of plan is best suited for a person
    who wants term insurance for say next 25 years? I do not wish to
    get in a situation where I pay insurance premium for say next 10 years 
    and then develop some kind of health problem which would give the
    insurance company an excuse to turn me down for renewal. How do I ensure 
    that I will get the renewal no matter what? Does IEEE insurance protect 
    you from this kind of situation? 
    
    The 2nd worst scenario is that they still insure you but your premium
    sky rockets as soon as they find any health problem in future.
    How does one protect against that?
    
    Besides IEEE, are there any other good term insurance policies which
    offer what I am looking for? I am in great health right now but wish
    to protect myself and my family against unforseen circumstances.
    
    BTW, whole-life or universal life may offer this protection but that
    will be my last resort.
    
    thanks,
    
    - Rajesh

    My Primerica Life policy is a 20-year level term plan renewable
    every 20 years to age 90, no health questions asked once I was
    initially accepted.  Works for me......

    ACM also has insurance, as do many college alumni programs.
    
    	-John Bishop

    My personal preference is to buy a abbreviated whole life (in this case
    the premium stop after N number of years, where N is typically 10-12
    years).

    re: .7
    
    The paid up after N years plans are a farce.  They never
    become paid up since they are interest sensitive and your
    cost of insurance continues to rise.  You might be paid
    up for a few years and they have to go right back to paying.
    You can get the US Senate report from June 1992 that talks
    about this type of plan and the lies that are told about it
    becoming paid up.

I neglected to mention financial strength in selecting an insurance 
company.

Since insurance companies are not federally insured and state insurance
funds are probably not adequately funded for a worst case scenario,
it makes senses to select a insurance policy based on both price
and financial strength.

There are a handful of companies that have the top ratings by
AM Best, Moody's and S&P.  NY Life which underwrites the IEEE Life
Insurance is top rated by all three rating firms.

Any analysis on life insurance should also include implications on
estates taxes.  In some cases, there are advantages for estate planning
purposes in owning a whole life policy.

Gim

    In the Primerica policy you have a guarantee of insurablity after the
    20 th year. So what that means is even if you get cancer in your 10th
    or 15th or 19th year you are guaranted to beable to get insurance with
    Primerica even if your uninsurable, and this goes for your whole family
    as well. They also have a clause in it that if we'll say your family
    member (wife , hunband or whatever) is dieing of something and the
    expenses are sky rocketing you can take some of the death benefit ahead
    of time to make life more confortable for that person until it comes
    time.
    	What the whole life people don't tell you is that the money you
    save
    by purchasing level term and investing the rest is that the compound
    rate that you will earn will triple or better your money. See what the
    Primerica people are trying to do is get America out of the insurance 
    game as quick as possible. If you can purchase level term and start
    saving at high interest, and accumulate enough in 10 , 15, or 20 years
    get out of insurance. Put your money in that same investment that your
    getting high interest and become financially independent. They want you
    to cancel their policy once you get financially independent.
    	You really need to read that senate report from June 23, 1992. if
    you want I will send you a copy. HOPE I have helped.
    Roger
    

      When  .9 makes the statement that "The paid up after N years plans
      [mentioned in  .7]  are  a  farce"  I  believe  that  there  is  a
      misunderstanding.

      The old standard "whole life" policies generally become fully paid
      up when you reach age 100.  This does vary a bit from  insurer  to
      insurer,  but  they  are  essentially  "Life  Paid  Up at Age 100"
      policies.

      There  are  also  "Life  Paid Up at Age 60" and "65" policies, and
      probably others.  The 60 & 65 policies are often sold as  "savings
      plans",  because  they require higher premiums and accumulate cash
      value faster than "Whole Life" policies.

      There  *ARE* Also "life paid up in x Years" policies, with various
      values of x -- 10 and 20 come to my mind.  These policies do *NOT*
      depend  on  interest rates; they are guaranteed to be paid up in x
      years.  If interest rates are higher than the policy  assumptions,
      they  may  pay  dividends, which can decrease the premiums, add to
      the face value of the policy, or cause it to be  paid  up  sooner.
      This is what I thin .7 had in mind.

      Of  course there are also sales pitches that show how a policy can
      become paid up in a very short time, based  on  what  most  of  us
      would  call  unrealistically  optimistic  assumptions.   These are
      another story.

    re: .9
    
    Well, I could argue with you, but what would be the point. The actual
    dividends that my company has been paying out is very close (make very
    very close) to the projections. So, I expect to pay the premiums for
    about 10 years since I started the policy. For anyone considering LI,
    it is very useful to consider all the alternatives, such as abbreviated
    whole life. I have said this before and I will say it again, term life
    may be good in a lot of cases but it is no panacea. With that, I am
    outahere.

    re:-1
    
    I guess the truth will be told in 10 years from now....
    anyone want to wager?

    
    Correct me if I'm wrong - you are paying $600 per year for the next 20
    years for $100,000 worth of "Level Term Insurance" which means that you
    have only a death benefit of $100,000 with no savings. The
    "advantage" to buying insurance this way is that your premiums will not
    increase for the next 20 years. 2 comments about this:
    1) You are currently paying a higher premium than a person your age
    should be: your premium does not increase for 20 years because you are 
    paying part of the cost now. 
    2) You can purchase $100,000 of Savings Bank Life Insurance (for
    example) for $159 per year (35 yr old - smoker) $114 for non-smoker. The 
    cost of the policy increases slightly each year but does not reach $600 
    until you are in your 60's. This type of policy gives you the same death 
    benefit and would allow you to have some savings without shelling out 
    another dime or paying the high up-front fees of a universal or whole life 
    policy.                                                 
    
    The whole life policy your friend is proposing ... think about it.
    $3000 per year for 10 years = $30,000 
    $16,000 cash value after 10 years means that you have paid $1400 per
    year for the insurance! (That is if the SURRENDER VALUE is $16,000 the
    CASH VALUE is actually meaningless because it is the SURRENDER VALUE
    that you would actually get not the other).
    The 20-year figure looks better but consider that: your money is tied
    up for 20 years and it is controlled by someone else - someone that is
    getting PAID BY YOU to control YOUR money, you could easily accumulate 
    the same amount or more in the same time period by buying term for less 
    money and banking or investing the difference. 
     

>    Correct me if I'm wrong - you are paying $600 per year for the next 20
>    years for $100,000 worth of "Level Term Insurance" which means that you
>    have only a death benefit of $100,000 with no savings. ...
      
      Well,  for  the  record,  this  isn't  quite  right -- although it
      doesn't make much difference in the term-vs-whole-life decision.
      
      "Level  term"  policies,  which  provide term insurance at a fixed
      premium for some number of years, actually  DO  have  a  cash  (or
      "savings") value.  In some, I think most, cases this is visible to
      the policy holder.  In other cases it may be  known  only  to  the
      insurance company.
      
      The  way  the premium is kept level is that the policy builds cash
      value during its early years, when the premium  is  more  that  an
      annual  term premium.  This cash value is the used in later policy
      years to make up the amount  by  which  the  annual  term  premium
      exceeds  the level premium.  At the end of the policy period -- 20
      years, in this case -- the cash is all  used  up  and  the  policy
      expires worthless.  
      
      But  if  the  policy  were canceled somewhere in the middle of the
      policy period -- say after 10 years or so in the case in point  --
      there should be some cash value returned to the policy holder.  If
      there isn't, then it's a "windfall" to the insurance company.

    re: $600/year for 100k of coverage
    
	This person must be quite old, and/or a smoker or in bad
    	health.  My Primerica policy is $325/year for 250,000 coverage
    	for 20 years.  If I went with a ten year plan it would be
    	about half that cost.  This person is paying $6.00 per thousand
    	which must make them in their 50's? not age 35??  Or maybe
    	they have riders for their spouse/children?
    
    SBLI is one-year annual renewable and will surely cost you
    much more over the 20 year span.  It is only available in Mass.
    

               -< More data, makes sense now? >-
    
> Note 464.17

>This person must be quite old, and/or a smoker or in bad
>health.  My Primerica policy is $325/year for 250,000 coverage
>for 20 years.  If I went with a ten year plan it would be
>about half that cost.  This person is paying $6.00 per thousand
>which must make them in their 50's? not age 35??  Or maybe
>they have riders for their spouse/children?
 
 A few facts: 

 1. The policy is issued for age 43. I am a non-smoker and in more 
    than perfect health (As a proof, I walked/jogged the
    WALK-FOR-HUNGER, 20 miles, yesterday). I have never been to a
    hospital for sickness and my doctor sees me only once a year for
    my annual check-up.

 2. I was offmark in remembering the premium to Primerica policy.
    It is about $490 and not $600 as previously stated.

 3. On my policy I dont have any riders I know of.

 Given this, if you still think your premium for the 250K policy (I
 dont know your age either) is lower, please give me your agent's
 name and number so I can call him/her.

 Thanks.
 Atul

    Yup, I am interested in knowing the name and number of the agent as I
    am shopping for similar amount of insurance policy for 20-25 years
    term. Great rates!

	Re. .18

	Atul,

	This is from memory, but is fairly accurate. From the tables of IEEE
	term insurance, you would pay $120 per year for a coverage of $100K. 
	This is for age group 40-44, non-smoker. If you went for coverage
	higher than $160K, then an additional 15% discount applies. Besides,
	NY Life (IEEE's underwriter) usually declares a dividend every year. 
	Another benefit is that if you get your term insurance thru' NY Life,
	your spouse can get upto your coverage for even less premium.

	The disadvantage is that the premium increases every 5 years. 
	And, that you have to be a member of IEEE, which can cost at least 
	60-70$ per year, but have their other benefits. 

	If you want more information on IEEE, contact me off-line. 

	-amitabh.

    Re .20

    IEEE membership fee - the last I heard they were $117/year. 

	Re. .21

	You can be a member of the Computer Society only, for which
	the fees are lower. 

    After reading the replies to this note I'm surprised of the knowledge
    that you all have. I would like to know which of you have a Life and
    health license? it just seems to me that everyone is defending his/her
    own policy. Have you read your policies from cover to cover and do you
    totally understand them? Most of you only seem to understand what you 
    want to understand and aren't open minded to check out other
    alternatives. One last Question, how come there are so many well known
    financial planners pushing term when they have nothing to gain by
    saying so, Also for those of you who have whole Life policies why
    don't your agent to show you his current policy more than likely he
    owns Term
    
    
    Dave
    

It seems then that the DEC extended life term is a bit pricey, yes?
For me 3X salary term is costing $2.65/ K$coverage

Who is the underwriter for DEC's plan?

Yikes...I just noticed that my LTD (Long Term Disability) deduct is even more
..over 600$ per year....I should look at my paycheck more often...
This seems a bit steep..

Judging by the stuff I have been reading about the STD mgrs harrasing
people, and not paying till co-erced...maybe I should cut back on this...

Re: .24

> It seems then that the DEC extended life term is a bit pricey, yes?
> For me 3X salary term is costing $2.65/ K$coverage

The DEC life insurance is high because of open enrollment. When
you join the company or during open enrollment, any one can
sign up regardless of high.  With private insurers, you have
to pass a physical examine.   Unfortunately, with DEC, the process
of adverse selection (those to can qualify for lower rates outside)
will leave Digital with a higher risk pool.

Individuals would be better off find the lowest risk rate
they can possibly qualify for. IEEE (underwritten by NY Life)
has a very difficult qualifying requirement. As a result, the
few who do qualify get very low rates.

> Who is the underwriter for DEC's plan?  
John Hancock is the administrator but I think DEC is essentially
self-insured.  The rates set may also be a tad on the high side.
There is  quite a bit of surplus  in the insurance fund.


Gim

    Atul
    If you need more info on Primerica and Level term contact me off line
    tks Roger

                      -< Midland? >-
    
    Has anyone heard of a company by this name? How are they rated with
    reference to the insurance company ratings? Is it a stable company?
    
    Please give me as much details as you can.
    
    Thanks
    Atul
    

    
    I thought I would add an idea to this one, even though the conversation
    has stopped.
    
    There are several quoting services for life insurance prices.  They
    are consumer organizations that will take your information (age, smoke,
    dollar amount) and give you multiple quotes of the 3-7 cheapest rates
    they can find.  Most require the companies to be rated A or better
    by Best or another service.  It is painless and a couple are free and
    I think one costs $50 bucks, but guarantees you will save that much 
    over any quote you have.  I don't have the numbers handy, but we got
    them from one of the various money advise books, several reference the
    services.
    
    Another generic comment.  The debate between level term and variable
    rate term is simply a Net Present Value problem.  Find someone with
    a business calculator and run the numbers.  It is a very objective
    answer.  The term vs variable life is quite the opposite, very 
    subjective.  I read a bunch and personally decided to go with all
    term.  I only wish I had the choice of "investing" the difference.
    After Save, Stock and IRA, it gets a bit tight.  From the offers
    we received, it can be a 2X-3X difference in price.
    
    Another thought, you can always change your mind........
    
    Ken                                                      

    Looks like you are investing the "difference".  If you had to pay the
    premiums for the face amount of Variable Life equal to the face amount
    of your Terrm policy, you might not have the money left to fund all the
    investment vehicles you mentioned!
    
    Bob
	

    
    RE: -1
    
    I guess if you look at it that way, you are right.
    
    Numbers:
    
    Selectquote: 1-800-343-1985
    Termquote:   1-800-444-TERM
    
    I make no claims of quality on these things, use at your own risk.  I
    just had the numbers handy.
    
    Ken

    I got 5 quotes from select quote.  My rate beat them all, but of
    course my company was not on the list they sent me.  Most were
    just 10 year level term with requalification requirements after
    the first 10 years were up.

I'm a read only noter and after a long time I opened this notesfile
and came across this topic. I am compelled to reply because 
I have done a lot of research on the subject lately.

Personally, I think annually renewable (ART), guaranteed renewable term 
policy from a reputable company is the way to go for anybody with 
the discipline to save and invest on their own. The guaranteed
renewability means that once issued, the policy will not be
impacted by future health problems. If I do not have the
discipline to save (you have to be honest with yourself - most
people think that they can, but dont), universal and whole
life policies make sense. You pay more, the insurance company
invests your money, they keep some and give you back some. Simple.
The scheme by which you pay up in the first few years is a variation
of the above theme. It may be true that insurance companies may be
able to get a better rate of return than if you invest on your own,
but after they take their cut, the return that you get is likely
to be much less than any decent mutual fund.

Insurance companies are there to make money. They rely on the mortality
table for statistical information on how long people are living. And
for the past many decades people have been living longer and longer.
And the insurance rates have been going down.

Shop around!  At 32, as a non-smoker in excellent health, I have been
quoted as low as $250 per year for $250K coverage!!! The premium
increases a few dollars a year. As you get older, the premiums increase 
but a 10-15-20 year level term does not necessarily protect against 
that because you are actually paying more in the beginning and if you
carefully calculate it you could be paying more. What you are actually 
paying for is hype and fear.

The only condition under which multi-year level term makes sense
is where some totally unexpected natural disaster suddenly reverses
the trend of people living longer and longer. That could very
well be, what with the AIDS epidemic and all that. I am willing
to take the risk of something like this happening, but this may
not be for you.

Even in that case, shop around. I have gotten a 20 year level
term quotation for $380 and less from reputable companies (A+ from AMBest).

Now, insurance market is a mess. The salespeople stand to make good
money (an established salesperson makes upwards of $100K per year).
In the year you sign up, they get back almost 45% of the premium you
pay as commission and 4-5% every year thereafter. 
It is in their interest to push products and services you
dont need. There are some insurance people however, who genuinely
want to help you and want to get you the product that you need.
Ultimately the consumer should beware.

One man's opinion, of course!
S!

	Check out the latest issue of "Consumer's Reports". The July issue 
   covers term insurance, future issues will cover other products such as whole 
   life.  The article does a good job at cutting through all the fluff 
   the companies add to their policies and points out the true cost of the 
   different products.  The charts list the best and worst $250,000 policies
   for males and females 35 and 45 yrs old.

				Steve