Term Insurance

If term insurance is so cheap, why doesn’t everyone just buy term?

Term is cheap because the insurance company generally does not have to pay out.  The majority of people do not die before age 65.  About 20% of people die before age 65, which means 80% die after age 65.  If people want a policy that is going to pay out when they die they need a permanent plan.

Why shouldn’t I buy term and invest the difference myself?

Life is a marathon….not a sprint.  Term insurance is built for the sprint.  Cash value insurance is built for the marathon.  Buying term and investing the difference is like running a marathon.  In a marathon, you can be ahead for 25 miles, and if you fall behind in the last few yards, you still lose.  You can be ahead by buying term and investing the difference for 10 or 15 years, but when you fall behind, you still lose no matter how long you were ahead.

• Not one person in the United States has deposited regularly for 20 years.  (Source: American Bankers Association)

• More 18 year olds have $100 in the bank than 68 year olds.  (Source: Devey’s Economic Tables)

• 85 out of 100 people at age 65 are not worth $250.  (Source: Social Security Administration)

• 93% of the men at age 65 who failed financially said it was because of a lack of a plan

• 89% are on Social Security benefit roles

• 45% are partially dependent upon relatives

• 30% are partially dependent upon charity

• 23% are still working

• Only 2% are self sustaining 

• Results of Stock Trading:  97% lose money.  2% break even.  1% makes money.  (Source: Harvard School of Business Study)