New Life Insurance Investment Advisor: Achieving Financial Security for You and your Family Through Today’s Insurance Products
“For anyone who needs to understand different types of life insurance, as well as considerations for purchasing and managing policies, this book should be on your nearby reference shelf. If you’ve frequently found yourself fumbling around with terminology, such as the differences between variable, universal, and variable universal life (VUL) policies, you’ll finally see some light through the haze.” - MorningstarAdvisor.com
Life insurance doesn’t have to be complex or intimidating. Ben Baldwin’s completely revised and updated guidebook makes it clear and logical, discussing how to analyze insurance products based on their investment merits and best overall financial returns. This clear, authoritative resource for consumer insurance information covers the pros and cons of Internet purchases, techniques to use capital within a policy, the fixed premium feature, insurance for different stages of life, and the new emergence of “immediate annuities.”
User Ratings and Reviews
5 Stars Excellent User’s Guide in Clear Language
Ben Baldwin has always been one of the clearest writers about life insurance from a financial planning perspective. The explanations of what the insurance industry would call “Advanced Underwriting” uses of life insurance in this book are clear, concise and free of jargon. Although this is a consumer book, I would recommend it to financial planning professionals to enhance their own understanding and to see how to explain complex financial topics to clients.
2 Stars good info, but too biased towards VUL
The book is very informative, entertaining, and instructive. It gives the benefits and drawbacks of each type of life insurance. It’s a good reference book. It’s easy to read and understand.
However, it is very biased towards variable universal life (VUL). In fact, the author states that this type of policy is the reason why the book exists. He even goes so far as to say that VUL is one of the best investment vehicles of the century! He’s a good cheerleader for VUL and even though he is honest and does point out the pitfalls of VUL, he sort of skims over the probability of problems with these policies in later years.
This book inspired me to check VUL policies and get some illustrations. I was shocked at the high probability of lapse in these policies if the expected return in the investments was average, say expected 8% return. You really need to get over 10% annualized return in the policies to be assured that the policy will not lapse. Anything less than that and you are running a grave risk of having to fund the policy dramatically or see it lapse just at a time when you need it most, after age 70. The trick is to adequately fund the policy from the start, and the funding can be quite expensive. And even after all of that, the insurance company makes YOU assume the risk of generating enough return to keep the policy in force. Even if you don’t take any loans, the policy can lapse if the returns are just a little bit less than expected. That’s very high risk to me. There are no affordable guarantees of minimum death benefit or cash values in a VUL, regardless of loans or premiums paid on time. I was shocked to learn this in reality.
So don’t fall for the hype in this book about VUL. The author greatly under-estimates the risk inherent in VUL policies.
Ultimately, I’d say there are better books on insurance if you just want to learn about the basics.
5 Stars Insurance Primer
This is a great introductory book to a difficult topic. Must read for any first year advisor or life insurance agent.
4 Stars Great way to learn about insurance
The author did a geat job in explaining life insurance products. Those that have panned the book have a built in bias against insurance companies and their salesmen/woman. Fine, but I am waiting for one to write a cogent critique of why the author is wrong in his analysis. Frankly, I haven’t found one financial services professional that can, even those that don’t sale insurance products. Bottom line, the strategy makes sense for a many if not most folks who are trying to accumulate retirement $$. And yes the insurance industry makes good fees selling their products just like the securities companies make great fees with their products whether they are indexed mutual funds or stocks and bonds. I simply consider this the cost of doing business and move on. So what if someone makes some money helping you have a more comfortable retirement. Read it, take the ideas seriously, and incorporate the ideas into your plan. I have.
5 Stars An excellent resource
This is the best source I have come across for dissecting and analyzing VUL. Most insurance professionals shy away from this product because of its risks. My feeling has been that this reaction is born out of a lack of understanding. This book is very clear about the risks and the rewards, teaching both with depth and candor. Knowledge is power and this book provides both.
Filed under: Life Insurance Book Reviews