Bear market = More insurance sales
Most financial advisors work on commission. When investment sales are down, advisors often turn to talking about insurance – the in-house sales and marketing material often talk about various strategies involving life insurance, critical illness insurance, disability insurance and long term care insurance. Insurance policies pay surprisingly large commissions. For example, a simple term insurance policy costing you $20/month can generate hundreds of dollars of up front commissions.
Whether you need the various types of insurance (and how much) is up to you and your advisor to decide, but don’t forget to get a detailed quote which outlines what is known as a “needs analysis”. A needs analysis will calculate your funding shortfall in the event of death (or disability, critical illness, etc.) based on your input and estimated expenses. It doesn’t hurt to review your needs analysis over time as well – you may find that you are under-insured… or over-insured.
Popularity: 9% [?]
Credit Repair - option trading<--Please click on the green Retweet button if you like this article and want to share it on Twitter!
You might like these Related Articles:
I think there is value in a good credit rating as some jobs look at your credit rating as a ...
Thanks for the link! I'll tape the Exchange again - hopefully you don't get bumped by Mr. GIC again. ...
I'm using my street name now. Thanks for filling me in and that. After hearing about Chevreau, I think I'll ...
Hopefully next time when you are in Ottawa I can make it! Yes, Ram will never sell out, and 20 ...
Thanks for the mention. I'll be sure to look for you on Lang and O'Leary. 
Is there any value to a good credit rating if you never plan to borrow money? 
With competent representation most people can keep their homes. The Trustee in Bankruptcy is required to represent the interest of ...
I'm concerned about the accuracy of some of the information in this post. For example, it's not necessarily true ...
Comment by Life Critical Illness on 31 March 2009:
It’s fine for advisers to start recommending insurances when investment sales are down but you just hope that they do a good job and think about the client’s needs too and not just commissions. The majority of advisers do care. At the same time you hope that those buying insurances now realise what it is that they are buying and don’t just cancel the policy 10 months down the line
Comment by Preet on 31 March 2009:
@ Life Critical Illness – I agree that many advisors do care, but I disagree with your statement that “it’s fine for advisors to START recommending insurances” since that implies they are not identifying the insurable risks during bull markets. The risks should be identified and addressed independent of the stock market condition (or trailing revenues/commissions).
Comment by tom on 31 March 2009:
Sales are sales and the adviser is out to make money and it is your job to know what you want and not get sold to on something you don’t need.
It is not really his fault if you buy something without asking questions and regret it later.
In terms of insurance being cheap, I have not looked at the number but it may be true, however, if inflation is hitting us hard, how much will that 100K policy be worth in say 10, 20 or more years down the road?
I guess you should only buy if you need it and calculate the long term potential and effects of it.
Comment by Mark Wolfinger on 31 March 2009:
“advisors often turn to talking about insurance”
Yes, but never portfolio insurance. Why is that? Oh yes, they don’t understand how options work.
Pingback by Pages tagged "bear" on 31 March 2009:
[...] bookmarks tagged bear Bear market = More insurance sales : WhereDoesAllM… saved by 3 others fiddlingsam bookmarked on 03/31/09 | [...]
Comment by financial advisor on 31 March 2009:
This is a hot topic right now because for many people, their permanent (or whole life) insurance policies are the only thing positive over the past 1, 5 and 10 years. It doesn’t mean insurance should be your only retirement savings, but it has certainly proven to be a good portion for many people.
Comment by trading short on 25 November 2009:
This is a hot topic right now because for many people, their permanent (or whole life) insurance policies are the only thing positive over the past 1, 5 and 10 years.It is not really his fault if you buy something without asking questions and regret it later.I guess you should only buy if you need it and calculate the long term potential and effects of it.