Has the Return On the Cash Value of Whole Life Insurance Been Really Bad?

If you watch financial television shows you have been told that the rate of return on money invested into a whole life insurance policy is awful. Many fee-based financial advisers, whose income depends on managing investors’ portfolios, agree the returns on investment in a whole life insurance contract is poor.What is this poor return compared to and is there any benefit to owning this contract?Some of the criticisms about whole life returns:1) It takes years, sometimes decades for the cash value to break even,
2) The commission on whole life is so high that the product can never have a good return. It is only sold by salespeople out to make money.
3) Whole life insurance has a lousy return compared to stocks; and investors cannot afford to earn these substandard returns – especially in their early years,
4) It is “too expensive.” An investor who needs coverage would be better off buying term life insurance and investing the difference.
5) A policy owner never has access to 100% of the cash value unless they lapse the policy.The purpose of this article is to discuss some of the objections surrounding whole life insurance and its returns.Investment advisers continually plead with their clients to “take a long-term approach” to investing. Even with that advice, many of the temptations in the investment marketplace convince the average investor to abandon their plans and chase the promise of better returns. Promises of quick returns usually end up being money-losing endeavors.Cash value policies require a commitment by the investor to “stay on course.” The break even point of a whole life policy depends on many factors like: the insurance company, the design of the policy’s premium vs. face value, and the interest rate that is credited to the policy among other things.In general, whole life policies that are designed to have the maximum face amount, or death benefit, for the premium will take longer to break even. These types of policies can take decades to break even but their purpose wouldn’t be to accumulate cash anyway, the purpose would be to acquire a larger permanent death benefit.On the other hand, a policy designed to build cash with a minimum amount of death benefit will accumulate cash faster, breaking even in less than 6 years.If investors need all of their money in less time than this while still needing the life insurance protection, they may be better of “buying term and investing the rest.”The commission earned by an agent selling the whole life policy can be as much as 100% of the first year’s premium, and this is the main reason that the policy has a low cash value in the early years. After a few years, however, policy returns accelerate making up for the loss of earnings on the front end. The policy owners who continue to hold the policy will benefit from the ones who abandon.The rate of return of whole life insurance should never be compared to that of the stock market.First, whole life has a contractual minimum rate of return on the cash value; stocks do not. In addition, insurance companies invest policy owner’s money into fixed income securities, like bonds, that historically are less volatile but have lower returns than stocks.A fair long-term return comparison for life insurance would be an index like the “Barclay’s Corporate Bond Index.” When this comparison is made, life insurance has had a superior risk adjusted rate of return over this bond index as measured by Beta and Alpha statistics.Whole life does require significantly more premium than term insurance or the same life insurance amount however term will only cover the individual for a limited period of time or “term” of the contract. If the insured person lives through the term, which of course is hoped, then the premium payments are lost. On the other hand, all of the premiums paid into whole life will be used to pay a claim some point in the future since the policy is designed to cover someone for their “whole life.”This makes term life insurance an expense and whole life insurance an asset that increases in value each year it is owned.It is true that a policy owner never has access to 100% of their money unless they surrender the policy. The product is not panacea for all financial needs. If the policy owner doesn’t want to cash in the policy, the permanent death benefit can be used to replace other money that was spent for a specific need or to provide an income.For example, the life insurance can provide a lump sum of money to replace Social Security money that a retiree doesn’t receive if they wait until age 70 to start receiving the increased income benefits.Whole life insurance is a tool that can make life much simpler and much more abundant when examined for what it can do and how to compensate for perceived shortcomings. Every financial product has “pros and cons.” Whole life insurance is no different.It is not an investment that increases (or decreases) rapidly like stocks can. Additionally, whole life is contractually guaranteed not to decrease in value due to investment losses.The rate of return for whole life insurance and the commissions earned by agents who sell it are debated topics in the financial industry. Life insurance is a long-term asset that should not be compared to the performance of stocks but instead compared to an allocation of fixed income securities. Policies can be designed to accumulate cash value faster by lowering the face amount of the insurance.

Posted in life insurance | Tagged | Comments Off

Direct Marketing Tips – Ultimate Direct Mail Marketing Guide!

Everyone seems to hate direct mail, and most companies have tried to use it without success. But with these direct marketing tips I want to transform your direct mail marketing from junk and spam to something that is really effective that the customer wants to receive.Let’s look that this is 3 phases…PHASE 1 – Think about your mailing list.Is the data very old and are you confident that the source of the data is reliable?I can’t tell you how important having a good list is. It does not matter if you already own it or are going to buy one you need to make sure that it’s up to date.PHASE 2 – Targeting.No set of direct marketing tips would be complete without talking about the idea of targeting.Always keep one thing in mind:”If you want to sell a ton of burgers, all you need is a hungry crowd” – Gary Halbert.You should target the factors below:* The persons age* Location* Lifestyle* Schooling* Likes and dislikes* Buying behavior.PHASE 3 – Market research.You need to find out how the market think and the pain they are feeling which you can help to solve.Luckily this is much easier today with online forums focused on each market niche.PHASE 4 – Your marketing message.You should make your message clear, persuasive and easy to understand. Don’t try and fill your direct mail with a load of information and products because you will just end up confusing your customers and will not get any sales.Have one goal for each piece and do everything you can to achieve that goal.Final thoughts.Direct mail can be a great tool for your business if you go about it in the right way.If you just follow these tips an 8.0% conversion rate is not uncommon.Good luck.For more ideas, tips and articles click here.

Posted in Uncategorized | Tagged | Comments Off

Quality Management System in Pharmaceuticals

The pharmaceutical industry is one of the heavily regulated manufacturing firms. Quality management systems have a direct impact on the ultimate quality of finished products. The quality of these products, however, does not only reflect on legislative requirements but the essence and efficiency of the pharmaceutical practitioner.Because of the significance attached to pharmaceutical industries, just like the food industries, they are directly used by consumers either for local application or internal consumption. The quality, safety, and efficacy attributes of these pharmaceutical products must, for this reason, be guaranteed so that the consumer’s health is not compromised. To ensure that high quality and safety is guaranteed, there is a need for high-quality pharmaceutical industries.Pharmaceutical industries are bound to comply with the global life science quality standards while engaging either in the production, supply, or consumption of pharmaceutical products. There are globally recognized bodies that regulate the quality of drug substances and drug products.Having a good understanding as well as implementing appropriate quality management system is a prerequisite for every kind of dealer in this pharmaceutical sector in to fulfill the regulatory as well as the ethical responsibility of incorporating management of identity, safety, purity, quality, and efficacy of the finished medicinal products.For most biotech and pharmaceutical companies, however, management of training, business processes, and documents are nightmares to them. In this article, we are going to explore the quality management systems and how one should explore them and manage the operations successfully.Application The component of the quality manufacturing system in pharmaceutical products can be applied in the pharmaceutical Development for:• Formulation development (container/closure system)• Manufacture of investigational products.• Drug substance development• Development of analytical method• Delivery system development (where needed)• Manufacturing process scale-up and developmentBeneficiaries of Pharmaceutical Quality SystemsR&D Document Authors: In addition, efficient quality management systems easily issues out author documents from compliant templates. The authors need not to worry about reworking the documents to match the templates. Word 2007 users can create, revise, and even redline the documents without having to leave Word while using the new systems’ toolbar. R&D Managers (Clinical, Regulatory, and Pre-Clinical): They can use the different types of quality management pharmaceutical software systems like master control, to search, organize, and take inventory of different study documents within the secure, and centralized quality management system. With the automated routing and approval functionality of quality systems, managers can with ease oversee the project teams comprised of resources from the various departments, as much as the teams might be working on various projects at the same time. The advanced pharmaceutical quality management systems also enhance correspondence from different regulatory agencies, suppliers, and CROs, linked with the appropriate documentation. With effective quality management systems, the PDFs having content bookmarks can be automatically generated for either document control functions or regulatory submissions. Since most of the pharmaceutical quality management software is complete and connected systems, authors don’t need to constantly cycle across the different disparate systems (from word to e-mail and then to document management system, and so forth) so as to locate or revise a document, and then submit it for review or approval – quality management systems such as master control permits such actions to be undertaken within the single integrated system.Management: On part of life science organizations, pharmaceutical quality systems are known in providing comprehensive solutions disregard of the existing in-house capabilities. Should it be that the organization is in need of training on the system’s functionality or needs assistance on system configuration to match the specific needs, pharmaceutical quality management systems can be modeled with any service level required, or the support the organization needs. An organization in need of expert knowledge can have quality management’s skilled advisory team to analyze the circumstances so as to clearly map and develop these requirements.Manufacturing/Operations: These systems easily tracks all specifications, nonconformance, and deviations throughout the development cycle. Pharmaceutical management systems provide that all appropriate personnel gains training on the most up-to-date work instructions and SOPs. Equally, these systems automate training tasks and facilitate the ease locating of training records within the centralized system.Clinical Personnel: Within the clinical precincts, the pharmaceutical quality management systems rids the management from the cases of paper filing backlogs that result in “black holes ” of documents which are almost impossible to find. Now that the quality management systems are electronic and automated, the searching of archives for trial documentation (IRB information, or protocols) is simple. CVs, electronic document copies, e-mails, etc., from different study sites, can be readily accessed in a single and centralized system.

Posted in Uncategorized | Tagged , , , , , , , , , , , , , , , | Comments Off