Is Suze Orman, The Insurance Goddess, Always Right about Life insurance?

by Ted Wolk
(web site )

May 29th, 2010 at 9:41 pm

Is Suze Orman Right about Life insurance?

A personal observation from Ted Wolk. This is a copy of an e-mail I just sent to her website.

"Listening to Suze the insurance goddess, it always appears the Term insurance is the only answer to every persons situation when they call in.

Suze Oram, you are an uninformed individual. Some of the advice you offer is as bad as anything I have ever observed. You make decisions based on inadequate data. Snap decisions when it comes to dealing with peoples lives is a very bad way to do business.

I would love to debate you on your show on a one on one basis.

I just watched your comments on telling this lady in Ct. to cash out her insurance policies immediately and buy term insurance.

You just done them a big disservice that will cost them a lot of money.

I have yet heard you talk to people about taking a paid up insurance policy to maintain their existing cash value and not loose money to future surrender charges. Additionally, they may have been able to take a paid up policy for $200,000 to $300,000 and this would have reduced the amount of term insurance they would need to buy.

Also, you operate under a concept that does not apply to the money behavior patterns of 95% of the people that buy and own life insurance.

I think you need to get your facts right before shooting from the hip.

I would love to do an analysis to these people to show them how you just screwed them out of about $20,000."

Ted Wolk

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by: Anonymous

Not saying Orman isn't wrong, and she is wrong a lot...especially on matters of tax issues...but I can tear apart any cash value insurance policy in minutes! It is always better to due term and invest the difference in mutual funds as they grow and make money in several ways. The goal is to get to the point were insurance is no longer necessary. Cash value policies, ie, whole life, universal life, etc, are designed to typically eat themselves, and the cash value alive. Plus, to get your money you have to borrow it and the rates of return in these policies for the same investments is always less due to fees, whether back or front loaded, and taxes etc. Even the lingo in policies is not correct such as dividends. Dividends is merely reimbursing for overcharged premiums and IS NOT and ROI within the portfolio owned. ANY cash value is trash value!! PERIOD!! That's why we call these guys star companies because if you look typically at the rate of return on the policies, it can be ******* for up to the first 3 years and I have seen it as high as 10 years. Which means no money is being made but the policy is actually eating the investment to cover the annual increase in premium charge for the insurance. This happens most if not near all the time!!
.....and FYI I have been doing taxes and financial services for over 25 years...

Permanent life Insurance is needed for final expensesand more.
by: Ted

Just a footnote to my above comments.

As all of us who are in the financial planning business know....The reason there are so many different types of insurance policies is to provide money for specific situations.

In the real life world, unlike Suze Orman's, and her one size fits all concept, people have different needs during different times in their life.

As an example: With over 30 years of insurance selling experience in the real world, I constantly see people reaching age 65, who do not own some type of a permanent policy at retirement to pay for final expenses and burial expenses.

They usually end up having to buy an expensive burial policy and final expense. This is an expensive premium, when they should already have a paid up life insurance policy in place. Almost everyone of them wishes they kept some of their permanent insurance.

Another option overlooked, such as in today's tough times, those people with permanent life insurance plans now have the luxury of using their cash value to maintain their coverage instead of having to drop their life insurance, if they don't have the money.

Suze, people do not buy life insurance as an investment, they buy it for peace of mind and specific situations, so get off your high and mighty pedestal and learn to help people with their specific situations. Oh, yes, what a wonderful insurance site you have for selling term insurance..Give me a break already..

I agree term insurance is a low cost way to provide protection, but some of our problems are not temporary, such as money for estate tax's. final expenses, burial costs, etc, etc.

Ted from an insurance agents

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