Sunday, March 13, 2011

Life Insurance is not Life Insurance

Sometimes effective marketing means misinterpreting words. Sometimes the truth doesn’t sell as well as misleading words.

Life Insurance is not life insurance. It is really death insurance. Fire insurance protects you against a fire. Accident insurance protects you against an accident. Theft insurance protects you against theft. And we could reassembly assume that flood and earthquake insurance would protect you against flood and earthquakes.

The truth would to be to say that you are selling death insurance to protect your survivors upon your death.

If they were truthful would my Dad have purchased Life Insurance when I was born? At the age of 18, I received a payment of about $1,800. During those 18 years he contributed much more than that amount. What was the purpose? If I died, he would have received a payment to pay for my funeral. I didn’t die so I got a modest payment.

By buying the “life insurance” he was betting that I would die young. It was not a profitable bet on his part. I appreciate the money I received at age 18. It could have been so much more if he simply put the monthly payments in a bank account at zero interest.

I’m sure that my Dad did not think about the investment in those cold terms. He was likely pressured by the emotional aspects of buying Life Insurance.

There is nothing wrong with buying Life Insurance – if you understand that it is really death insurance.

You buy fire insurance to protect you against the loss of fire. You buy life insurance to protect your loves ones against the loss of your death.

Death is the logical end of life – but let’s be clear on the difference and the intended deception.

Life insurance is really death insurance.

George Torok

Marketing Speaker

Business Speaker



Steve H said...

I agree Life Insurance is a misnomer. However i believe it should be called Income Insurance, and when combined with the term Death benefit the true purpose of the insurance is much more apparent.


buy life insurance said...

The payment from your life insurance could replace real estate or other assets as inheritance for your children. A tutor should be assigned to manage the funds if the children are under 18 and a trust should be established to handle funds destined for grown children.

Chris from said...

Bottom line is, life insurance is one of the best investments you can make for your family. You may resent having to pay a monthly premium but at least you can ensure that your family is protected in the event of your death.