A little background, I know enough about finances to know that I ought to be saving for retirement early and maximize my benefit for later in life but thats about it. And once i was contacted by a "specialist" that serves my office I thought it would be a great time to sit down and talk finances. My wife was on the same page as me and we set a date to finally meet. As both of our parents have had injuries and disability insurance saved them from hardship we thought this was a no brainer and will keep this in place. Term life is cheap and beneficial just in case. 750k death benefit with 120$ premium a year is a drop in the bucket. Then came the whole life. This financial representatives eyes lit up as he smiled and told us how great it was as a vehicle for the future. As long as we pay, we get a death benefit for each of us of 300,000 payable in the event of our death all for the low low price of 700 a month.
700 shocked up, but we heard about how cash value grows, can be used as a loan in the event we need it, and will help us slide into retirement. The rep drew his diagrams, showed us how the money would grow, smiled and made sure everything was set in stone.
Fast forward 9 months and 6300$ later I really thought about looking more into it because it seemed astronomical to me. At 40 years, that would be 336K going in AND the premiums go up over time. So for us to not even double our investment (300k each at death) was ridiculous. I called up the rep for a meeting and he met us and told us everything was looking good. Our finances were in a good place and smiles and laughter and our ticket to the future was still protected. As soon as we brought up our concerns the mood changed. Our rep talked about making less agressive payments to our house, and not trying to pay off our last 2k in student loans right away if we needed more money. There was no way we should cancel our 700/mo golden parachute. We wanted to pay off debt, and using that 6300 would go a long way to make that dream a reality. He said at a bare minimum keep it for the full year, and then we will meet and decide where we are and to cancel then when we've had more time to think about it. All I thought about was why hold it for 2100 when i Would just cancel anyways? We could pay off that student loan and use the interest saved and extra 100 to go out for a nice steak dinner or something. We stood our ground and requested the cancellation. We will end up with $5 of the 6300 we put in, but are no longer contributing. I've never been happier to lose 6300 in my life. It was a weight lifted off my shoulders. As we walked to the door I said thanks for taking the time to meet us and extended my hand for a handshake. That was a no go from our "representative" didnt want to talk to us, didnt smile, the twinkle in his eyes was gone. I sent a follow up email and text message to confirm we discussed cancellation just to be sure in case theres any funny business. I haven't gotten a reply yet
I later learned that that company commission structure the rep gets 100% of our year 1 premiums less fees if we keep the account active for 13 months. If not they have to pay it back. Not sure how much we cost him, and i feel bad for eating that chunk of his finances, but ultimately feel as though we were scammed.
Hopefully this may be a lesson to you all. But in my none expert opinion, whole life is a great way to make other people's (read:representatives) retirement accounts healthier, and not your own
Submitted June 26, 2019 at 05:46PM by Waitforsquirtle https://ift.tt/2X5SlBQ
