From: dbinford@convex.com (David Binford)
Subject: Re: Questions about Whole Life Insurance from New York Life...
Date: Mon, 16 Nov 1992 17:13:08 GMT
Distribution: usa
Organization: Engineering, CONVEX Computer Corp., Richardson, Tx., USA
X-Disclaimer: This message was written by a user at CONVEX Computer
              Corp. The opinions expressed are those of the user and
              not necessarily those of CONVEX.

Okay, here you go, but you are getting what you paid for with this advice.
Take it or leave it.

In article <1992Nov14.031038.26642@alw.nih.gov> vos@helix.nih.gov (Peter Vos) writes:
>Hello Netters,
> buying life insurance.  We spent several hours with an independent
> agent who was pushing New York Life.
> We had settled on whole life insurance for each of us.

Make sure you are meeting your needs, not your agents.  An agent should
not have to "push" you to buy something you need nor should you ever have
to "settle" on something you need.

> Our
> concerns were 1) to provide money to cover kids college costs (assume
> two-although none exist as yet); 

Assuming you will both be living when your kids reach college age, you need
investment, not insurance for this.  To be safe, you might want to take out
a term policy that will cease when the (to be) kids graduate, in case
something happen's.

>2) to cover any mortgage costs on
> a house (as yet not purchased);

I assume you mean that if one of you passed away, you would use the
insurance to cover the mortgage.  Since your mortgage is a fixed term,
what you really need is insurance that will cover the income you loose
by not having your spouse's income any longer for the term of the loan.
This does not sound like Whole life -- this sounds like some form of a
term policy that covers this loss in income during the term of the loan.
More like a decreasing term policy.

> and 3) to provide a form of retirement
> income as we are not invested in any pension plans.

Again you are looking for investment income here, not insurance.  I believe
that if you look, you will find that the insurance community does not 
have as good of return as the investment community, i.e. mutual funds, etc.

> 	We discounted term life insurance since we have the
> means to pay the premiums on whole life, and because of the interest
> in providing some source of income for our dotage.

If you have the means, my sugestion would be shop around to get
inexpensive term policies for insurance and put the extra in pure investment
vehicles.

What you have to remember with whole-life is that it is really a very
expensive decreasing term policy.  Why do they encourage you to build
up your cash value?
							Your   Their
                Policy  Cash Value      Payable@death	Money/ Money
                ------- --------        ------------	---------------------
Scenerio#1      $500K   $400K           $500K	<=>	400K / 100K
Scenerio#2      $500K   $800K           $800K	<=>	800K / 0

For every dollar you "invest", you are decreasing their death benefit.
When your cash value is greater than your death benefit, your
insurance company is not providing any death benefit--You are
self-insured.  What you have at this point amounts to a very expensive
mutual fund, they are just managing your money.

I have read that you can purchase some whole life policies that also
pay the death benefit + your cash value.  Care to guess how much more
this cost? I don't know, but if you are looking seriously at whole
life, make sure you get what you want, either a plan puts you
on the road toward self-insurance OR death benefit + cash value.

There is one other thing that turns me off with an insurance policy
also doing my investing where you are locked into a family of funds.
By enrolling in a policy like this, you are signing up with their
money managers and their managment fees for LIFE.

Whole life is really an expensive decreasing term policy that you turn
into an expensive mutual fund.

/*~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ */
  Dave Binford		   (214) 497-4762	    dbinford@convex.COM
  Convex Computer Corp.  P.O. Box 833851   Richardson, Texas 75083-3851
/*~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ */
-- 
/*~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ */
  Dave Binford		   (214) 497-4762	    dbinford@convex.COM
  Convex Computer Corp.  P.O. Box 833851   Richardson, Texas 75083-3851
/*~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ */