Using the wrong company or wrong product is Bad But an agent not proficient, worse. How to compare insurance companies?
its not so much the insurance company or product even though its very, very important Its the proficiency of the agent that is designing the insurance policy based upon your objectives. the criteria to use to choose the right company, the right product but it’s really most importantly the way its designed correctly and funded properly. why and how you can compare insurance companies products And then how to fund it correctly. So, when looking for an insurance company, you want to make sure the company is strong and so you want to make sure they have high ratings What you do is look at the various ratings that in insurance company has Such as the comdex score And that simply takes all of the ratings and assigns a company a score between one and100. That means insurance companies that have to have reserves on hand that are liquid and safe in case of a disaster in the economy or a run on the bank And so, that’s why insurance companies, legal reserved insurance companies have never not honored a legitimate claim. They cross insure each other if one were to become insolvent, all the other insurance companies license in the state where you live have to any up there prorate of share of the percent of the insurance And that’s why there’s never been an insurance company not honor a legitimate claim They cross insure each other where as banks, credit unions, they pay a premium to the federal government for FDIC Federal deposit insurance corporation, And there has been times FDIC has been broke When we have had a run on the banks But you know, government, they know they can tax us They know they can print money And so people fairly secure But do you know where banks, credit unions, many brokerage firms put 30 to 40 percent of their tier 1 assets for liquidity and safety? In to insurance companies, Many banks borrow our money and pay us 1% interest? And they turn around and they put it into insurance companies and earn 5%Every million they pay 10,000 a year in interest And they make 50,000.Thats 5 times That’s 500% returns You can do that But see, most insurance companies are ranked 6 notches higher in safety than the banks in credit unions Many of them are only rated triple B ,That’s like 6 notches higher in safety. So, you can choose companies based upon those rankings And so, out of all the companies and they are several thousand in America, there are only a couple of hundred that offer indexed universal life And out of all of those, you put your my money you want it to go into an insurance company where they are benefiting the policy holders more than their pocket, They are extremely generous in the rates of return. They keep a very small portion of the profits for them If they are out there earning And lately with interest rates at a 50-year low, if you are earning 6 percent in the insurance policy, they only use one of those percentage points still And its tax-free So, its how you structure it, you choose the right company based on strength and so forth And make sure they are generous
Number 2, you want to choose the right product , There is a vast majority of people that have non-performing index universal life insurance policies or any kind of insurance. Its because the advisor is not proficient so that if you earn 10, you will net 9 If you earn 11, you will net 10,So that the cost of insurance is as low as possible And that if you put in 100,000 a 500,000, a million, it will double every 7 to 10 years And when you retire, every million can generate 70, 80, 90, 100 thousand a year of tax-free income If its not designed correctly, You may earn 10% but you will only net 3 or 4 percent Maybe at best that’s huge And so, when people say” How do I compare life insurance companies”, you can compare companies based on strength of and everything else, you can choose the right company You can even choose the right product But if your advisor doesn’t know what they are doing, It will not perform So, make sure you don’t make that mistake.