The Economic Bias of Life Insurance Agents

In our second 90 Second Finance installment on the topic of Economic Bias—a conflict of interest where money is involved—we tackle the bias in the financial realm most often stereotyped: the life insurance agent. There are many great, trustworthy agents out there, but there’s no denying their Economic Bias is a big one. Of course, it might not be what you think it is…

(Click HERE if you missed the introductory 90 Second Finance video on Economic Bias.)

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4 thoughts on “The Economic Bias of Life Insurance Agents

  1. “Most of them are very good dressers and have a full head of hair” LOL!!! Fantastic. Awesome presentation as always, I don’t think that most people get that. Consider it shared.

  2. Tim,
    That is very useful information. If you could say there is a meaningful average, what would be the average price (range) of a $1mm term life insurance policy be for a middle age (mid forties) guy in very good health?
    Also,what are the benefits of term versus whole life?
    Mike

  3. Great questions, Mike! A 45 year-old male in top physical condition could expect to pay around $1,155 per year for a $1 million 20 year term policy. A 10 year term policy may cost around $590 per year. To put that in perspective, a million dollar whole life policy would likely be in excess of $10,000 per year–probably closer to $15,000!
    Term is optimal for dealing with “life insurance NEEDS,” like final expenses, children’s education, payment of debts & mortgages and replacement of lost income. Permanent insurance, however, is often best used for “life insurance WANTS,” like building cash-value, estate creation, wealth replacement (for estate taxes) and charitable bequests.
    I estimate that a household should have income in excess of $250,000 per year or assets of a couple million before permanent life insurance should be considered.
    Here are two more videos to help: http://www.timmaurer.com/2010/07/life-insurance.html and http://www.timmaurer.com/2010/07/life-insurance-part-2-how.html

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