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About Mark Pace
When there is a need for immediate liquidity at the time of someone’s death, it has been my experience that life insurance, when it is properly acquired and managed, is one of the best tools ever created for the creation and transfer of wealth. However, in my 35 plus years of experience, life insurance is rarely properly acquired and never managed… thereby creating a monumental financial disaster for many individuals that should never happen.
If you would like to learn more about any Pig-in-a-Poke blog posts or discuss any other life insurance issues, contact T. Mark Pace at Mark@objectivereview.com
Pace’s Pig-in-a-Poke
About Pace’s Pig-in-a-Poke
Pace’s Pig-in-a-Poke, provides an arena for sharing the four great passions in my life. My three foundational passions are:
- Invest in yourself first;
- The genius in all of us, and;
- We can all live a long healthy life.
These three support my life work and my fourth passion; LIPM™ (Life Insurance Property Management).
As the blog title suggests, my focus is on debunking all of the myths, misuse, and muddled thinking that has accumulated in the life insurance industry. And, from time to time, I will go outside of the specific world of life insurance and share my views on my other three passions.
I hope you find my blog worthy of your attention, informative, and occasionally inspirational. I welcome your comments, questions and suggestions.
The Poke
Every wise investor knows and loves the miracle of compounding interest. The Motely Fool says, “It's very much like a snowball effect. As your capital rolls down the hill it becomes bigger and bigger. Even if you start with a small snowball, given enough time, you can end up with an extremely large snowball indeed.”
The Poke
When life insurance is treated as a simple commodity, one that can be purchased and forgotten about, the opportunity to optimize its performance as a valuable and competitive form of property is too often lost.
“…human beings act in accordance with the underlying structures in their lives.
Some structures are more useful than others in leading to desired results.
Rather than asking, ‘How do I get this unwanted situation to go away?’ you might ask, ‘What structures should I adopt to create the results I want to create?’"
Robert Fritz
The Poke
While driving my car this past weekend, I turned on the radio and listened to a newscast. The stories went from bad to worse to bleak to near hysteria… the last being about the weather.
The Poke
The complex life insurance environment within which advisors strive to succeed is an unpredictable, constantly shifting jumble of disparate and conflicting elements and forces.
The Poke
Stop me if you’ve heard this one…
Late one November, an insurance advisor makes an urgent client call. “Mr. Smith, you’re a great client so I thought I would give you the heads up on the rate increases the insurance carriers are planning to push through in January.”
The Poke:
What is your life expectancy?
If you are like most people, your answer to this question is too low.
While the life expectancy data published annually is accurate, meaningful and a key component in how actuaries arrive at the cost of life insurance, its relevance to your life expectancy decreases with each passing year.
The Poke:
In these litigious times, the one mistake that will get you successfully sued most often occurs after you agree to be a trustee of an Irrevocable Life Insurance Trust (ILIT).
The Poke:
We are beginning to see some carriers are sanctioning and paying commission on internal replacement… which of course leads us to speculate that something must be going on here.
Internal replacement simply means replacing an old policy with a new one from the same carrier. Advisors lean towards replacement as they tend to believe newer policies are better policies and it is in the owner’s best interest to replace old ones… if the carrier allows.
Beware of potential issues with GUL policies
The Poke:
Many advisors and life insurance owners believe Guaranteed Universal Life policies need no ongoing management. They assume that as long as the premiums are paid, nothing can go wrong and the death benefit is always guaranteed.
The Poke:
There once was a time when you could count on converting most level term life insurance policies into permanent policies at anytime during the level term period of the policy. And, generally speaking, you could convert to almost any one of the permanent life insurance products available from that carrier at the time of conversion.
Health impairments are not the end of the life insurance world…
The Poke: Many advisors and brokers will tell you that once a case has been brokered for a person with health impairments seeking life insurance, whatever rating the insurance company comes back with is the best you can ever expect. Even if the case has been shopped aggressively – e.g.: the broker sent it to 10 carriers – once you are rated, that’s it, game over, tout fini!
Achieving the best possible results when placing large life insurance cases requires much more advocacy on the part of the agent or advisor than most people expect or even understand is possible… especially when the insured is getting on in age.
People who have borrowed money from older, participating, whole life policies are likely missing an opportunity to take advantage of some very high earning potential.
Life Insurance product designers and agents are some of the most creative individuals in the world. This can be good when their creativity is applied to solving problems with life insurance.
But, when creativity is taken to the extreme and they focus solely on selling more policies to maintain or increase profits, very fine and valuable products are manipulated in a manner that, while generating a sale and a commission, will often never generate the results the life insurance owner expects and, more importantly, needs.
