...who can you trust?! I wanted to share an experience I've had this past year. Kirsten and I got married in October and being the responsible person I am, I began looking into purchasing some life insurance on me just in case some event happens that ends with my untimely death and she's left to pay for the condo, cars, secret internet porn habit, etc. So where do you begin? At the time, I liked to think of myself as a rather savvy person when it came to personal finances with the exception of life insurance.
Living in Milwaukee has many perks, one of which I
thought would be that the city is host to one of the largest insurance companies in the country. The company shall remain
Na
Me
Less, but you know who you crooks are. Anyway, I go to meet with a personal finance advisor and to make a long story short, I get talked into purchasing a policy called a "Variable Life" policy which means some of the money paid toward the premiums is invested and over time grows, makes you rich apparently, and other supposed benefits. (A side benefit is the person who sells the policy gets a very large commission.) So it's basically an investment vehicle built into an insurance plan. So I signed up to the tune of $200 a month. This clown's overwhelming theme to me was that he was going to do what was right for ME...I assumed that meant not him.
Fast forward to me spending some quality time at the great
Schwartz's bookstore and I pick up a book on life insurance that compares the different types. This book (and I found many others later) basically says anyone that buys one of these policies is a fool unless you have so much money, you need somewhere else to hide it. Needless to say, not the ideal policy for someone in my position. Term Life insurance is the way to go (and also literally 10x cheaper for me). It also points out that (conveniently) the broker who sells the policy makes about 5x as much on commission on Variable Policies than on Term Policies. I'm furious and feel like an idiot.
Fast forward again and I've researched this MUCH more and ended up canceling my policy to which my State Farm agent (who already has my car, condo, jewelry, etc and who I should have started out going to in the first place) warns me that I'll be receiving an ugly call from the "wolf in sheep's clothing" because it's law that he's informed that I'm switching policies...and to no surprise, he's right. Here's the paraphrased conversation but the worst comment I had to include:
Crook: "Derek, I must say I'm disappointed you cancelled your policy without consulting me. How could you do such a thing to me?" (At first I was like "how is this personally hurting him?" but I found out if a customer cancels this type of policy in the first year, he has to pay back his big commission)
Me: "Well, I've been doing a lot of research and found that these policies are not the right choice for someone in my position. I haven't maxed out my Roth IRA this past year and I should do that before putting investment money into an insurance policy. Wouldn't you agree? You said all along how you want to help me make the best decision for me."
Crook: "Have you read the book
Your Complete Guide to Money Happiness? That book states these policies are the way to go.
Me: "No, but I have found dozens of other books & websites that basically call people who invest in these things idiots unless they need a tax shelter. It's in no way the best type of policy for me."
Crook: "Well Derek, I don't know what to tell you. Here you go and do research behind my back. I just can't trust you. I don't think we have any other business to do together."
Me: "Behind your back? Are you serious? Since when is your word gospel on where my money goes??"
Crook: "I'm the professional and you should listen to what I say."
Me: "Uh yea, I don't think so. I think I'll be safer out on my own."
WTF? This clown was supposed to be a "professional" and showing me, the uninformed consumer, the correct things to do with my money for me and my family. Turns out, to no surprise I guess, that he's just trying to get commissions and screw the customer.
Your lesson for today folks, do your research and talk to as many friends as possible to see what they do. I started doing that after this fiasco and I felt like a bigger turd because many of them went the Term Insurance (aka, the correct type of policy) route in the first place. Thanks for letting me vent.