Write an editorial about the subject: It can be tough answering questions about the benefits of cash value life insurance policy high premiums vs. benefits in insurance. We are also supposed to understand all the most important concepts in a wider context of meaning. For instance, you should be in the position to define what is a good premium when asked. Take time to learn all the points that matter about a cash value life insurance policy and matters will work out for you quite well.
It is important to acknowledge that there are several ways to make money in the insurance business. The first one involves collecting higher premiums from people who have more risk than other people.
The second one is by investing the premiums you receive and earning a modest rate of interest on your investments. However, as far as I am concerned, the only way to make really serious money in the insurance business is to do it the way I do it. And that way is by concentrating on the second method of making money which is investing the premiums you receive.
A close focus
By the way, this is also the way Warren Buffet makes his money. Here’s how he puts it: “I buy insurance when it is cheap and sell it when it is dear. That’s the way to make money in the insurance business.” As far as I am concerned, this is the way to make really serious money in the insurance business. By the way, I have a friend who has done this for 20 years and he has made millions and millions of dollars. Understanding cash value life insurance is a sure way to thrive provided you do things right.
Wherever he is right now, he couldn’t tell you because he has no allegiance to any country on earth. He has houses in Key West, Florida; Cape Cod, Massachusetts; and Santa Fe, New Mexico; and lots of different places. Anyway, as far as I am concerned, the only way to make really serious money in the insurance business is by concentrating on this second method which is investing in the premiums you receive. And, by the way, this is also the way all smart stock investors make their money.
How do you know if you are getting good deals on your life insurance? Simple. You ask your agent, “How much extra will I have to pay if I increase my coverage to $500,000 instead of the current $250,000?” If he doesn’t have an immediate answer to that question, you can be sure you are getting ripped off! Why? Simply because your agent doesn’t know the answer and neither does anyone else he has told about your inquiry.
Be thoughtful in every decision that you make
Remember this: The only people who know the exact answer to that question are the people who write the life insurance policies! So, if you are paying high prices for life insurance, it is almost certain you are being taken advantage of. On the other hand, if you are paying low prices for life insurance, it is almost certain you are being taken care of. Here is a test you can use: Increase Your Coverage To $500,000 And Pay An Extra $20 Per Month!
Although this may be true for some people, it is not true for most people. Most people need more coverage than they have now. If that’s the case for you, simply increase your coverage to the highest amount your current policy will allow. By the way, this is also the way all smart stock investors make their money. They buy stocks when they are dirt cheap and sell them when they are expensive. It’s as simple as that.
However, there is a third way to make money in the insurance business which is by collecting higher premiums from people who have more risk than other people. This method of making money works only if you can somehow identify the people who have more risk than other people.
In the case of life insurance, it is relatively easy to identify such people because of something called “term life insurance.” What is term life insurance? Term life insurance is any life insurance you buy which has a fixed expiration date on your policy. For example, say you buy a $100,000 life insurance policy for 10 years. That means if you are alive at the end of those 10 years, your insurance company will pay off $100,000 to the person or persons you designate as beneficiaries. However, if you die before the end of the 10 years, your beneficiaries will receive nothing. Research about the cash value life insurance or talk to experts so that you can do things the right way.
Understanding the concept the best way
As I have noted before, this is known as a “lapse” in insurance. Lapses are one of the main reasons people don’t buy life insurance. Another reason people don’t buy life insurance is they think they are not going to need it. Actually, in many cases, people who think they won’t need life insurance often need it more than other people.
After all, many people who think they won’t need life insurance often find themselves unexpectedly confronted with medical expenses they cannot afford to pay. In that case, they will need the protection of life insurance more than ever.
On the other hand, some people will never, ever need life insurance because they are so healthy and have such a low risk of dying prematurely, they will likely outlive all of their relatives and will never have a need to make a transfer of wealth to their beneficiaries. This is true even if they are not religious about not smoking, drinking alcohol or taking drugs, or engaging in other unhealthy activities which can shorten your life. What should you do if you are paying high prices for life insurance?
In any case where you suspect you might be taken advantage of, simply ask your agent for an itemized statement showing you how much you are spending per year to maintain your current coverage. If the amount you are spending is more than $20 per month, you might want to reconsider your coverage.
Do you remember the last time you changed your car insurance policy? Chances are, you didn’t go to one of those “charm school” type seminars where they taught you how to bargain. Instead, you just went to an insurance agent who was happy to write you a new policy that had a higher monthly premium and lower coverage than your old policy. You need to understand cash value life insurance inside out to benefit from it fully.
That’s because, in most cases, you can get away with less than perfect driving and still be insured. On the other hand, if you do have to have your car inspected and the mechanic finds even one minor imperfection, your premiums will almost immediately go up 500%! That’s because now your insurer will assume you are an extremely high-risk driver.
Life insurance is different. If you are found to be a non-smoker when you apply for life insurance, your rate will probably be reduced significantly. However, if you later start smoking, the rate on your current policy will almost immediately jump back up to where it was before you quit. This is true even if you stop smoking completely for 2 or 3 years and then decide to start smoking again. The reason for this is simple: You see, when you are smoking, you are increasing your risk of dying much more than other people who are not smoking.