report scams here at scam.com dont get scammed Scams and Scammers - Expose hypocrisy and spread respect ! Don't get ripped off! REGISTER  

Go Back   scams > Scam Message Board > Insurance Scams
Register FAQ Register To Post Member List Promote Search Today's Posts Mark Forums Read
Reply
 
Thread Tools
  #1  
Old 02-25-2009, 12:36 AM
gazzettee gazzettee is offline
Bronze Member
 
Join Date: Jan 2009
Posts: 63
Buy term and invest the difference is a scam!

And it really is.

Uneducated and ill informed legions of Amway want to bee’s parading around the country touting this very bad advice.

They are (or were not) insurance professionals or financials planners. Instead, they were blue collar by day, self-declared saviors by night.

Oh yes. I remember them.

They sure helped a lot of people, didn't they?

I say NO to Neo-A L Williams followers.


Bookmark and Share

Reply With Quote

  #2  
Old 02-25-2009, 12:14 PM
mumbles's Avatar
mumbles mumbles is offline
Most Valued Gold Member
 
Join Date: Jul 2006
Posts: 7,803
Re: Buy term and invest the difference is a scam!

there are some words that frighten me . . . i try to run away if i can . . . AMWAY . . . Mormon Missionaries . . . Magazines . . .




Reply With Quote

  #3  
Old 02-25-2009, 12:37 PM
ohein56's Avatar
ohein56 ohein56 is offline
The fly in your Anti-MLM ointment...
 
Join Date: Jul 2005
Location: Northern, California
Posts: 13,223
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by gazzettee View Post
And it really is.

Uneducated and ill informed legions of Amway want to bee’s parading around the country touting this very bad advice.

They are (or were not) insurance professionals or financials planners. Instead, they were blue collar by day, self-declared saviors by night.

Oh yes. I remember them.

They sure helped a lot of people, didn't they?

I say NO to Neo-A L Williams followers.
Why is buying term and investing the difference a bad thing?

AL Williams is long gone, (Now it's owned by CitiBank, & is called Primerica) but at one time ALWilliams became the #1 insurance provider in America, passing Prudential, in the 80's & 90's.

The concept of buy term & invest the diff. made sense to many at one time or another. What's changed?

Just curious. Please clarify...

Kerry Hein
__________________
If everyone is thinking alike, then no one is thinking.
― Benjamin Franklin
Armed neutrality makes it much easier to detect hypocrisy.
― Criss Jami
BEWARE:Joecool44, aka 'joecool', anti-MLM fanatic, Trolls here anonymously!!
Click Here!
Joecools ugliest LIE!...~"I'm not hiding my identity."
Some common sense Re:MLM/DS can be found, here...!! Click Here


Reply With Quote

  #4  
Old 02-25-2009, 03:55 PM
gazzettee gazzettee is offline
Bronze Member
 
Join Date: Jan 2009
Posts: 63
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by ohein56 View Post
Why is buying term and investing the difference a bad thing?


The concept of buy term & invest the diff. made sense to many at one time or another. What's changed?

Just curious. Please clarify...

Kerry Hein
There is nothing wrong, in theory, to buy term and invest the difference.

However, for most typical Americans, traditional Cash Value life insurance policy has a "forced savings" aspect to it: that is, you must pay the entire premium and on paying it you have both the life insurance protection and your cash value build up.

On the other hand, the buy Term and invest the difference approach requires the discipline to devote the same total cash outlay in two directions. If you break down and pay the Term life insurance premiums but not the contribution to the IRA, the whole logic of this plan breaks down.

Finally, as I have stated elsewhere here on these threads, Whole Life Insurance over the long haul produces a respectable return ( around 5% ) and has features such as the ability to stop paying premiums and obtain loans. Then there were th lucky ones who were in a company that demutualized and received stock or cash for their mutual policy, drastically increased their real yield.

Those who bought term in the last 15 years and invested the difference in the stock market are now sitting on a zero return at best and quite probably a negative return. At the same time, their term insurance policy has gone up in price.

I think buy term and invest the difference is going to be a thing of the past; just like stated income and AR mortgages, it got people nowhere.



Last edited by gazzettee : 02-25-2009 at 03:58 PM.
Reply With Quote

  #5  
Old 02-25-2009, 04:33 PM
ohein56's Avatar
ohein56 ohein56 is offline
The fly in your Anti-MLM ointment...
 
Join Date: Jul 2005
Location: Northern, California
Posts: 13,223
Re: Buy term and invest the difference is a scam!

Interesting.

Thanks for the advice & tip.

The worlds definitely changed in the last year or so. It's a whole new ball game now.

Out with the old, in with the ?, we'll see...

Kerry
__________________
If everyone is thinking alike, then no one is thinking.
― Benjamin Franklin
Armed neutrality makes it much easier to detect hypocrisy.
― Criss Jami
BEWARE:Joecool44, aka 'joecool', anti-MLM fanatic, Trolls here anonymously!!
Click Here!
Joecools ugliest LIE!...~"I'm not hiding my identity."
Some common sense Re:MLM/DS can be found, here...!! Click Here


Reply With Quote

  #6  
Old 02-25-2009, 05:05 PM
deskjockey deskjockey is offline
Banned
 
Join Date: May 2007
Posts: 5
Re: Buy term and invest the difference is a scam!

There is nothing wrong with either whole life or term life. Neither is a "scam." They both serve different purposes and both are useful for certain people in certain situations. What a person needs to make sure of is that he or she is buying a decent policy from a decent company. If you buy a bad policy, I guess it could be considered a "scam," but that's where research comes in.

Term is a death benefit only policy. No one should go into it expecting it to be an investment. It is designed for people who need protection to cover a mortgage, dependents, or spouse for only a certain period of time (hence the "term"). It mostly comes into play for a young couple with children and a mortgage, where if one or both parents were to pass away early, the family would be in dire straights financially. Many of these young couples cannot comfortably afford the premiums on a whole life or UL policy, so term offers them protection. Sometimes you can do a "half and half" policy with half term and half whole life. It allows the couple to have a high death benefit with the term while still owning a policy that builds cash value. Some couples eventually drop the term if they can afford to go with all whole life. Some don't because they don't believe in or need the cash value aspect; they are only looking for a temporary death benefit.

Whole life is much more complicated unfortunately. There are so many policies out there, and unfortunately a person can be taken advantage of if he or she is not careful. There are A LOT of unscrupulous insurance agents out there. You need to check the guaranteed minimum interest rate as well as actual historical interest rates to get a sense of what the policy is paying in terms of interest. The comment about whole life being a "forced savings" plan is correct; many people are not disciplined enough to buy term and invest the difference. I look at whole life as being similar to an annuity; not the greatest interest rate, but not much risk either; you're pretty much guaranteed some rate of return on your premiums. In this market, that may not be such a bad thing. In a booming bull market, your 4-6% may be a bad thing. It just depends on your objectives and risk tolerance.


Reply With Quote

  #7  
Old 03-12-2009, 03:38 PM
gazzettee gazzettee is offline
Bronze Member
 
Join Date: Jan 2009
Posts: 63
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by deskjockey View Post
There is nothing wrong with either whole life or term life. Neither is a "scam."
Well put.

What agents are supposed to do is give their clients a needs analysis and provide them with a suitable policy.

There are too many uneducated and greedy people "trying insurance"; looking only to make a lot of money.

A person should be in the business because they like the industry and sincerely want to help people with their insurance and financial needs.

These people really need to find a harmless outlet to "pursue their dreams" and should stay the hell out of the insurance business.


Reply With Quote

  #8  
Old 07-07-2009, 08:45 PM
BJJMTF BJJMTF is offline
Member
 
Join Date: May 2009
Posts: 39
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by gazzettee View Post
There is nothing wrong, in theory, to buy term and invest the difference.

However, for most typical Americans, traditional Cash Value life insurance policy has a "forced savings" aspect to it: that is, you must pay the entire premium and on paying it you have both the life insurance protection and your cash value build up.

On the other hand, the buy Term and invest the difference approach requires the discipline to devote the same total cash outlay in two directions. If you break down and pay the Term life insurance premiums but not the contribution to the IRA, the whole logic of this plan breaks down.

Finally, as I have stated elsewhere here on these threads, Whole Life Insurance over the long haul produces a respectable return ( around 5% ) and has features such as the ability to stop paying premiums and obtain loans. Then there were th lucky ones who were in a company that demutualized and received stock or cash for their mutual policy, drastically increased their real yield.

Those who bought term in the last 15 years and invested the difference in the stock market are now sitting on a zero return at best and quite probably a negative return. At the same time, their term insurance policy has gone up in price.

I think buy term and invest the difference is going to be a thing of the past; just like stated income and AR mortgages, it got people nowhere.

There's 10-15-20-25-30-35 year term policies out there, there's level term to 65...

And zero returns over the past 15 years? are you joking? try saying 7%-8% and some funds are still +10% (the agressive ones)

I feel sorry for the people you're "helping" because you're just trying to justify your high commissioned product when you know for a fact buying term and investing the differance is better.


And hold on the forced savings in the policy... ok so after year 1 I want my money fromt he savings... WTF? I HAVE TO BORROW MY OWN MONEY IN THE FORM OF A LOAN!?!?!?!?

Wait, but what if there's surrender charges? That means I probably can't get any money for 5 years... But you told me I'm saving my money!!!!

ok what if I cancel it then to get my money? OOOH SNAP! you charge X amount and keep a chunk of the "savings"

hhhmmm what about if I die? Well depending on the death benifit THE CLIENT HAS PICKED (they never pick it's picked for them) You Might get the savings, oooorrr you might not, chances are, you won't.



Last edited by BJJMTF : 07-07-2009 at 08:49 PM.
Reply With Quote

  #9  
Old 07-27-2009, 06:04 AM
Ohioquotes Ohioquotes is offline
Newbie Member
 
Join Date: Apr 2009
Location: SW Ohio
Posts: 15
Re: Buy term and invest the difference is a scam!

Of course it's not a scam. It's a concept, not a company.

It works well for most. Others like the WL approach.

Personally, I have always purchased term and plowed the "difference" into Roth IRAs, 401K and now...the Roth 401K.

And of course, if your 401K matches...make sure that's the first thing you do.


Reply With Quote

  #10  
Old 08-05-2009, 07:47 AM
Primericaisbad Primericaisbad is offline
Newbie Member
 
Join Date: Jun 2009
Posts: 18
Re: Buy term and invest the difference is a scam!

"And zero returns over the past 15 years? are you joking? try saying 7%-8% and some funds are still +10% (the agressive ones)"

Really, have you factored in the -40% over the least few years? This is why you don't understand the values of guarantees in permanent policies.

Just for fun, assume you had $1000 invested at 7.2% for 10 years. You, the teacher of the Rule of 72, should be able to figure out how much money you have. Now, in year 11, you lose 40%. What's your total return? Don't bother trying to answer the question, but FYI, it's WAY less than you think. A 5% guaranteed return would've been MUCH better, especially when it also will continually carry a death benefit.


Reply With Quote

  #11  
Old 08-07-2009, 09:50 AM
BJJMTF BJJMTF is offline
Member
 
Join Date: May 2009
Posts: 39
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by Primericaisbad View Post
"And zero returns over the past 15 years? are you joking? try saying 7%-8% and some funds are still +10% (the agressive ones)"

Really, have you factored in the -40% over the least few years? This is why you don't understand the values of guarantees in permanent policies.

Just for fun, assume you had $1000 invested at 7.2% for 10 years. You, the teacher of the Rule of 72, should be able to figure out how much money you have. Now, in year 11, you lose 40%. What's your total return? Don't bother trying to answer the question, but FYI, it's WAY less than you think. A 5% guaranteed return would've been MUCH better, especially when it also will continually carry a death benefit.

yes I have factored all that in... Infact I'm sure you can find the good funds are around 7-8% ours have been, so iuno what your problem is... Maybe WE ALL should get garunteeded WHOLE LIFE INVESTMENTS and then borrow our money. and pay back the interest we earned!



Last edited by BJJMTF : 08-07-2009 at 09:52 AM.
Reply With Quote

  #12  
Old 08-10-2009, 07:24 PM
Primericaisbad Primericaisbad is offline
Newbie Member
 
Join Date: Jun 2009
Posts: 18
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by BJJMTF View Post
yes I have factored all that in... Infact I'm sure you can find the good funds are around 7-8% ours have been, so iuno what your problem is... Maybe WE ALL should get garunteeded WHOLE LIFE INVESTMENTS and then borrow our money. and pay back the interest we earned!

Ok, show me 5 funds that YOU know have who have averaged "+10% (the agressive ones)" in the last 15 years


Reply With Quote

  #13  
Old 08-17-2009, 12:16 PM
419legalscam 419legalscam is offline
Newbie Member
 
Join Date: Aug 2009
Posts: 8
Re: Buy term and invest the difference is a scam!

But if market value will again lose then what will happen?
So tell a plan which is applicable in both cases.
__________________
The Latest News Relating to Nigerian 419 Fraud From Around the World.
Nigerian 419 Fraud News


Reply With Quote

  #14  
Old 08-17-2009, 02:21 PM
eflteacher eflteacher is offline
Silver Member
 
Join Date: Nov 2007
Posts: 253
Re: Buy term and invest the difference is a scam!

Sell the NEED PEOPLE

OR GET OUT OF THE BUSINESS


I just got placed $250,000 of term on a 30 something for around $20 a month from JNL.

I am working on a couple of whole life case now.

Get the point.

Sell insurance. Help people. Too much for you dumb asses?


Reply With Quote

  #15  
Old 09-08-2009, 09:57 AM
BJJMTF BJJMTF is offline
Member
 
Join Date: May 2009
Posts: 39
Re: Buy term and invest the difference is a scam!

Quote:
Originally Posted by Primericaisbad View Post
Ok, show me 5 funds that YOU know have who have averaged "+10% (the agressive ones)" in the last 15 years

You're a financial professional, I'm 100% confident you can find them.


Reply With Quote

  #16  
Old 11-06-2010, 07:52 AM
theme theme is offline
Silver Member
 
Join Date: Oct 2008
Posts: 455
Buy term and invest the difference is a scam!

Primerica is not the way to go. The "crusade" is dead. A.L. Williams had its place in time and in my opinion, was a wake-up call to the way that insurance is sold. But we are no longer in 1977. Or 1987.

Let me repeat, the crusade is dead. The Buy Term and Invest the Difference crusade is dead. It's irrelevent. It had its day. It no longer applies. It now is just one of several strategies that can be used. Gone are the days of insurance agents only selling whole life to people that cannot afford it. Most professional agents know that adequate coverage is paramount and many times, term insurance is used to make sure that adequate coverage is attained.

Most professional agents also know that assets need to be protected as they build, and that changes in life occur. They understand wealth accululation, taxes, and liability.

While the "theory of decreasing responsibilty" may be somewhat true, the application of overpriced term insurance and an IRA does not adequately fill that void. As assets increase (and liabilities decrease), tax burdens increase, so does the liklelyhood of bad health and tax issues. Life insurance is an effective tool to overcome these issues, and when planned and applied properly, will address the needs of a changing financial and health scenario.

The fact that Primerica only sells one product, in their opinion, the "right" product is crazy. But it's their marketing plan and it's legal, so whatever. I question the ethics though. Remember, these people have very little insurance and tax training and they are replacing policies, permanent policies, that may have been in place for years. Some with surrender charges. Then the primerica agent takes the cash value less surrender charge and places it into a qualified plan that they don't intend on using until retirement?

So much for the Rule of 72. I hope they factor that surrender charge, which was not even needed, into the overall rate of return. Grrr.....

I'm not saying that replacement of permanent insurance is never warranted.

Did I mention the crusade is dead? The "build your own MLM insurance business" is dead. No longer unique. Also, no longer viable. No training, just an unlimited supply of kool-aid. And just like any MLM, they push you to sell a single-overpriced product (because it's the "best" of course) to everyone you know. It's overpriced so that it can pay all of the levels of the pyramid. They cannot sell competitive term insurance and be successful mlm "entrepreneurs".

Please sell Amway instead. Or Avon. Or Pampered Chef. Or host a candle party. All of these are fine for MLM - if you like overpriced soap developed by the Amway Scientists.


Reply With Quote

  #17  
Old 11-06-2010, 09:13 AM
PatrickinGa PatrickinGa is offline
Silver Member
 
Join Date: Nov 2010
Posts: 129
Re: Buy term and invest the difference is a scam!

What they really mean is "Buy term and invest the difference with me!

So why is term insurance so bad, if you only want coverage for a specified period of time? And with term, you can get more coverage for less money? Doesn't sound so terrible to me, if that is what one wants.

Why is whole life better? Why is it not a scam?

What is so honest about "forced savings", and being allowed to borrow your own money, and pay interest to get it, while it reduces the amount of face value coverage while your loan to yourself is outstanding?

They "force" you to save by insinuating that you are too stupid to save for yourself elsewhere at a higher ROI?

Sure they can pay you a dividend - out of the overpriced payments you paid to them to get the coverage in the first place.

Seems like WL and TL both have their place, and I am not a proponent of ALW, but I thought the point was to get the best price you can for whatever you are buying.



Reply With Quote

Reply

Similar Threads
Thread Thread Starter Forum Replies Last Post
www.razorpay.com is a SCAM, DO NOT INVEST! buddhanot Internet Scams 0 06-17-2012 09:47 AM
Morality Term Papers Scam PhilW Internet Scams 2 05-31-2010 08:33 PM
Invest-gold is scam. geleren Internet Scams 3 07-16-2007 11:38 AM
Mutual Invest.com is scam geleren Internet Scams 2 05-29-2007 08:01 AM
Invest-x.com is scam? reojionline Investment Scams 4 11-14-2006 01:50 AM

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is On
Forum Jump




This site may contain advice, opinions and statements of various information providers. Scam.com does not represent or endorse the accuracy or reliability of any advice, opinion, statement or other information provided by any information provider, any User of this Site or any other person or entity. Reliance upon any such advice, opinion, statement, or other information shall also be at the User’s own risk. Neither Scam.com nor its affiliates, nor any of their respective agents, employees, information providers or content providers, shall be liable to any User or anyone else for any inaccuracy, error, omission, interruption, deletion, defect, alteration of or use of any content herein, or for its timeliness or completeness, nor shall they be liable for any failure of performance, computer virus or communication line failure, regardless of cause, or for any damages resulting therefrom. Just because a business, person, or entity is listed on scam.com does not necessarily constitute they are scammers. This is a free open forum where people can debate the merits from the consumer's or business owner's perspective. Registration and participation is always FREE.


All times are GMT -5. The time now is 09:28 PM.




Scam.com Is Proudly Hosted By Rackco and Protected By CloudFlare


Scams Message Board - Copyright 2004-2013 Scam.com , All Rights Reserved.