Death Benefit? How’s That Possible?

Kids, as your financial planner, let me give you some advice.  There are three kinds of people.  Those who can do math and those who can’t.  If that weren’t true, you wouldn’t have this kind of life insurance company.  They are offering the public (and everybody else) a life insurance policy with a payout up to …  hold on… an underwhelming $10,000!  That’s right.  And with no health questions and no medical exams.  I know this because they have little pictures with big a giant X through each.

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Take the easy-to-get-confused table shown here.  Let’s say that you’re an 80 year-old man looking for a little easy cash for the survivors.  $166 per month for 10 years at 3% interest compounded daily, reinvested after any possible dividends, taking into consideration the tax benefits, would be worth…  Hell, I don’t know.  I’m not an accountant.  Or an actuary.  

I do know that the 80 year old man would pay $6,000 in premiums after three years to collect $10,000 if they died in that period.  Of course, that’s a bad example.  Nobody lives past 83, so maybe there’s a flaw in the math.  And, that’s not counting what that man would have made if he had taken that money and invested it in a CD.  Not just any CD, but a good one.  Like the last one from U2.  They’re rich, so it must be a good investment.

Now $10,000 is a lot of money.  Almost worth one day in the hospital.  Well, if it’s the animal hospital.  So, ensure that you make it clear in your will the way you want that whopping $10,000 divided.  You know what they say:  where there’s a will, there are relatives.

Hold on a second….  This was a pretty shitty good deal until I read the small print.  There’s a reduction in death benefits during the first two years of policy ownership?  By how much?  What?  You get a couple of bucks back?  Now that 80 year-old man is REALLY getting screwed.

 Oh, well.  That doesn’t bother me.  I’m not buying this crap.  I intend to live forever.  So far, so good.

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