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In Reply to: Re: Re: Re: Debunking reputations... posted by hindi on August 02, 2001 at 09:25:54:
Thank you, hindi. I appreciate having intelligent and intellectually stimulating conversation like yourself. It certainly is a rare day when people can achieve heightened levels of maturity and attempt to see things from another point of view. If only this applied to other aspects of life...
In a very basic sense, yes, insurance is essentially, 'you die...we pay.' What also comes into play is your risk tolerance and objectives. It's quite nice to accumulate cash value, tax deferred in a policy, but some people like to do it while assuming certains risks, such as market risk through investments. There are the people that feel quite strongly about life insurance and would enjoy owning many different policies. I know many people that are quite happy, several decades later, that they obtained a policy. But at first, you'd never quite feel that way.
Individually, the products are quite different, but to the layman, they're not much different in their purpose and use. At the end of 20 years, however, there would be a noticeable difference. On the one hand, you have the steady consistent growth of whole life and on the other you have the tumultuous ride taken by way of the stock market and underlying investments offered by the company.
Each has its ups and downs. Some people like structured payment plans, others like to be able to sock away as much as possible and let the policy ride for awhile. They might not care much initially about cash value growth, though I'd recommend against that.
Until next time... Take care...