Indeed, I don’t remember where I read it, it may have been exam material, but people who buy pay-out annuities live longer than those who buy life insurance. [red]obviously, if you want to live longer, buy a pay-out annuity[/red]
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^NY-population
I didn’t say it was right, just a theory I’d heard from so folks.
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Not really. One of our NY licensed subs is domiciled in AL, but since it is licensed in NY, NY audits it (a lot) as does AL. The other NY licensed sub is also NY domiciled (it was acquired a couple of years back). And you can be domiciled in NY and without the HQ being in NY. I think you must have a business office in NY (technical legal crap not interesting to me), but HQ, meaning where top executives and “home office” staff work, no.
I’m less certain that AM best is a solid indicator of stability.Maybe it’s an indicator of ‘current financial strength’, but I’m not confident that that’s necessarily the case either. And I don’t think even most actuaries are well able to judge stability.
Further, I’d argue that it’s almost meaningless in terms of long term stability. A group of yoho’s 20 years from now in the C-suite can easily throw a company down the tubes.
Anyway, use it if you like. At least it’s something.
Two counter points - Confederation was something like A+ rated like a week before the doors got locked. Second counter point (offered without proof or necessarily basis in fact), word on the street from the 90’s was that Financial Life sold way too much Term to 100 improperly priced. They’re the reason ‘lapse supported pricing’ is a term in Canada. Speculation is that if they weren’t bought out, they were eventually going to implode spectacularly because of all the T100. And I think Financial Life had a perfectly fine best rating.
And there’s possibility that we see something like that again. We’re moving online in the next decade or so, and the life insurance business online is way different than what the industry is used to. Consumers aren’t guided by agents and taken through a decent underwritting process. Instead, they want both buy online (so no education) and instant purchases (so there goes ‘real’ underwritting). Could we see a company corner the online market, sell a crapton of policies, then find out that it’s mispriced or there’s a product feature they screwed up?
tl;dr eh, AM best is fine, but mostly it’s take your best crack at it. I wouldn’t be the farm on what an A rating means.
One last point - if you want financial numbers, at least in Canada (probably true in the US as well), I’d look at foresters. I feel like they’re cubicles are made from suitcases stuffed with cash.
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Added, in Canada, you don’t need to worry about this stuff. Every company belongs to Assuris. Assuris basically says that if one company goes belly up, that all the other companies will back their policies. So if you end up with some no-name company, their policies still have guarantees backed by the big boys. I love assuris.
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I had a 20-year term expire this year. I think I am going to up my wardrobe expenses from $100 to $1,000 a year with the monty I’m saving.
Any limits or caps on the amount back-up guarantee? Are annuities guaranteed up to the full account value and insurance up to the full face amount?
In the US, in the case of insurer insolvency, each state has a guaranty fund (funded by other solvent companies in that state) which is triggered, but limits are imposed (i.e. $300,000 of face amount) and exact amounts vary by each and every state.
I have mixed feelings about these types of “bailouts”. It seems like a consumer can take a risk on a cheap under-priced policy and the companies which are accurately (or conservatively) priced end up supporting the policyholders of the high-flying (now-insolvent) risky company. It seems to encourage policyholders to purchase under-priced products. Cap and limits seem to reduce this perverse incentive.
i suppose with your kids being a certain age and you being single again, you likely don’t need it. work probably gives you something anyway, right? Plus all the residuals from all that sweet dogwashing-FU money.
I am 5 years into a 20 yr term. i bought using reliaquote or some similar online quote generator. shockingly true but i picked the lowest priced option offered. i am healthy male. younger kid is old enough to know we have it and looks at me with dollar signs in her eyes.
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It’s 100 percent up to a limit then 85 over it on life. Not going to lose much in terms of coverage. I do t think pre.iums are covered in the guarantee.
At least in Canada, premiums aren’t related to company size. Sometimes it’s some small company that’s the cheapest, sometimes the big boys take a run at the market for a while.
Why even buy term life insurance? Isn’t it just gambling?
Sorta - but you really hope you don’t win…
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Because I’d like to transfer the financial risk of my death over the next n years to someone else. Once n years is over, I’m willing to retain that risk–primarily because the financial risk of my death will be greatly reduced.
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Yup…whether I “win” (or, perhaps, “my wife wins”) or “lose” the transfer of risk is worth the cost of the premium.
it’s win-win. If u die, ur family gets cash (win). and if u don’t die, that’s a win in itself
It’s like people who get all upset that they paid for car insurance all year and didn’t get in an accident so they didn’t even use it!!!
Umm - yes you did. You would have been taken care of if you had had an accident. That’s what you were paying for.
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Correct. The transfer of risk is the product.
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I’m gonna use that. It makes the intangible, tangible.
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I’m sure you could come up with a “Return of Premium” policy option - but it is probably going to be very expensive.
Dr Whitman drilled that into out heads (well, at least mine) in the Insurance class he taught at the Universitay…which is like a university but it’s way cooler so we say it that waaaaay.