Wednesday, December 3, 2014

Suze orman life insurance

Is Suze Orman Right about Life insurance?

February 17th, 2009 by Jeb Foster

Life insurance is an important  subject—too important for bad advice. And that’s why I’m going to take a couple minutes to unpack Suze Orman’s unwise counsel.

(For those of you without televisions, Suze Orman is an incredibly popular personal finance pundit and Oprah protégé.)

Too rigid

When answering the question, “How much life insurance should I get?” Orman resorts to a long-discredited formula of multiplying your salary by 20.

The Insurance Information Institute (III) calls this formula “simplistic ” because it ignores inflation and other sources of income. The III outlines a scenario in which, at 3 percent annual inflation, Orman’s formula would leave a survivor with no money after 16 years.

Too arbitrary

Orman’s conclusion on the whole life vs. term life insurance debate matches our own, but her reasoning is suspect. She discourages consumers from buying whole life insurance merely because insurance agents make large commissions on such policies.

“While I agree with her that whole life insurance is a poor choice, her explanation for why kind of leaves a person wondering who in the world ever told her she could touch a microphone,” says Ed Hinerman. a life insurance  and blogger. “The reason whole life is a bad deal is that it mixes your family protection with investments … commission is not the issue!”

In other words, permanent life insurance is a bad investment strategy. While it will replace lost income in the event of the policyholder’s death, it will never be a cash cow while the insured is alive. We at InsureMe generally subscribe to this advice: ‘buy term and invest the difference.’

What’s more, Hinerman notes that you should buy a financial product because it’s the right product for you, not because it results in a large or small commission for the agent or broker. The commission is immaterial.

When it comes to life insurance, there’s no one-size-fits-all approach, despite what Orman would have you believe. The best way to find the right coverage is to talk to a licensed professional that you trust. He or she will look at your unique situation—your age, income, assets, number of dependents—and help you find the best policy.

Source

Related Posts:

  • Bryant Air Conditioner Prices: An OverviewBryant Air Conditioner Prices: An Overview Bryant Air Conditioner Prices | Features, Pros, Cons, Installation Cost, Wholesale Price, and More for Brya… Read More
  • Ge locomotivesA comprehensive guide to diesel and steam locomotive identification The C41-8W (Dash 8) The GE C44-8W, or Dash 8, is an older style locomotive. It is… Read More
  • Airstream interstateAirstream Interstate for Sale It takes a special person to own a Class B motorhome - especially one as versatile as the Airstream Interstate. This Cl… Read More
  • What Is Strand Woven Bamboo Flooring?What Is Strand Woven Bamboo Flooring? Found This Helpful Hardwood floors are easy to clean and provide natural beauty within the home. While bamboo ha… Read More
  • Stained Concrete - The Art of AcidStained Concrete - The Art of Acid-Etch Staining Learn how to use acid-based chemical stains to impart rich, earth-toned color to plain concrete floor… Read More

0 comments:

Post a Comment