Talk:Buy term and invest the difference

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Same problems here. Please read the WP:NPOV policy and try to conform to that. It is not easy, but eventually, by following the policy, an article can represent the facts, and not promote one POV over the other. This article professes one POV very strongly, which is not acceptable. - Taxman ^Talk 14:50, July 20, 2005 (UTC)

Contents 1 Thanks Taxman 2 Good title? 3 Proposed Rewrite 4 Stamp

[edit] Thanks Taxman

Thanks Taxman for your worthwhile edits and comments

Not sure if this is the same person that recently edited the page again and thanked me on my talk page. But the recent edit just added back all the problem POV (basically that same that was there before) with no effort to conform to the NPOV policy. Please read the policy and make an effort to state only facts and attribute important viewpoint to those that hold them. I've reverted the changes, though some parts of it may be worth bringing back. - Taxman ^Talk 21:45, 30 March 2006 (UTC)

I'm attempting to make changes to apply NPOV, though it's difficult to see from my standpoint what is worded more as an opinion vs fact or quote (many statements are quotes drawn from several articles,not all are included). Pro's and con's of both sides have been more clearly marked and any recommendations would be appreciated.

If you having trouble differentiating fact from opinion, I can't entirely help that, but does the section in WP:NPOV on converting opinions to useful facts help? That's only a start, the rest is providing a balanced presentation of facts in the first place. An egregious example to start off your edits is "This alternative frequently provides greater protection, flexibility in coverage and tax advantages that are unable to be realized with a permanent program." That is pure opinion, not even supportable by sources, and only presents part of the truth. That is the antithesis of the NPOV policy. Separating into pro and con sections isn't a good idea because it ends up creating a back and forth ping pong battle of POVs. Some of the adjustments you made are in the right direction though. I recommend setting up an account so replies can be easier and you can track your edits. See Wikipedia:Welcome. I also recommend looking through other articles and seeing how they deal with differing points of view and present them as facts instead of asserting opinions. A good place to start is with the Wikipedia:Featured articles. Basically the problem is it is very obvious what your POV is from your edits. Really good Wikipedia writing shouldn't allow seeing where the author's viewpoints lie. It's fine if you think by term and invest is the way to go, it's just not fine for the article to promote that. If you can't drastically reduce the amount of POV you've placed in the article I'm going to have to pull it back again. I'm trying to be nice and help you get your bearings, but I can't just let the article stay in a worse state. - Taxman ^Talk 00:36, 31 March 2006 (UTC)

[edit] Good title?

I seem to remember that "Buy term and invest the difference" is the old A.L. Williams slogan. He was a noted anti-Whole Life insurer. And if it's going to be a NPOV page, should it be "Pros and Cons of Term vs Whole Life Insurance"?Gaviidae 18:31, 9 June 2006 (UTC)

That is where it's from, but it has other adherents, and it's not terribly uncommon to see it referred to in the (uneducated in large part) financial news/magazine articles. Seems fine to cover it as an insurance sales philosophy of it's own right. Though you may be on to something that an article under this title should either be only about the sales philosophy itself, or there should instead be a comparison article under a term vs permanent title. I'm not a fan of a comparison article because the term and permanent insurance articles if done right should cover their advantages and disadvantages accurately. Any help in reducing the POV of the text as it stands would be greatly appreciated. - Taxman ^Talk 19:51, 9 June 2006 (UTC)

I actually thought he at some point trademarked? that slogan. Since there's a Term page and a Whole Life page, should this page exist at all? As you said, the other two should explain pros and cons. Technically there are policies that are both (WL policies with ART built into them). Anyways, I'm a bit reluctant to mess with this page too much because I'm currently working for the current incarnation of William's company (they also dance and sing the whole "term is always better no matter what" tune). I only hope I'm not too biased for the best interest of my customers, and perhaps there could be a good Wiki page for them to go to so they can make a good decision on which policy is better for them. So far, I've been relying on an agent friend who covers the WL end, so my customers have access to 2 agent opinions...Gaviidae 13:25, 22 June 2006 (UTC)

Alright, the gayness and "clear-as-mud" style of this article is keeping me awake at night (well, that and the mosquito). I want to completely rewrite this. Not sure where the Wiki Rules of Total Rewrites Page is, so I'll type my outline here first, ja? Gaviidae 07:06, 30 June 2006 (UTC)

[edit] Proposed Rewrite

"Buy Term and Invest the Difference" is a concept used by proponents of term (temporary) life insurance, as opposed to whole life (permanent) insurance.

list who uses? Primerica? Others?

(because the linked pages for term and whole life are very detailed and clear as mud to Joe Schmucken-reader, I decided to put in small one-paragraph descriptions of term and whole life before going further-- gaviidae)

• Term insurance is pure insurance. It is similar to auto/motor insurance in that it only pays out in the event of the insured's death, and is typically sold in 20-year blocks, although it may be as long as 35 years and as short as one year (called "annual renewable term" or ART). If the insured does not die during the term, the policy expires, and the insured does not get a return of the premiums paid. Although the insured person will certainly die at some point in the future, the insurance company usually does not expect this to happen during the term; this and the fact that it is purely insurance makes the premiums cheaper than whole life policies.

find my old textbooks

• Whole life insurance is part insurance and part savings, both paid for by the (usually higher) premiums. The insurance part is similar to term except that it lasts until the insured either dies or reaches age 100; in both cases the policy matures and pays out the benefit to the insured/beneficiaries. The savings part is either a sub-account or a separate account where some of the premuims paid go in and grow, usually tax-deferred, at a relatively low rate similar to bond yields (4% is an example, but the actual amount depends on the policy)citation for 4%. If the insured dies, the beneficiaries/estate recieve a non-taxable death benefit equal to the amount of money the deceased was insured for; the cash account remains with the insurance company. If the insured lives to age 100, the cash account by then has reached an amount equal to what the death benefit would have been, and is paid out to the insured (but not along with the death benefit; is it either/or, never both). Universal life insurance is a complicated form of whole life where sometimes the insured may be able to recieve both the cash value and the death benefit amount, but with other compromises.

find old textbooks, possibly elaborate on UL and variable versions

Proponents of term insurance point out that although an insured with a whole life policy pays premiums for both the insurance and the cash value sub-account, the insured can only ever recieve one or the other. Also, while the insured does have an investment/savings account within the policy, the rate is low compared to stock market averages (8-10% per decade) citation here. These proponents say that as long as insurance is a necessity, pay as little as possible for the amount of coverage needed, and put the rest of the money into investment accounts, such as mutual funds.

PRO EXAMPLE: The "buy term" concept states that the insurance customer should buy the cheaper term insurance while (s)he is young, has high debts and/or mortgage and low financial net worth, and young children as dependents; then take the extra money (s)he would have paid towards a whole life premium, and instead invest it in something with a high return, such as stocks. The assumption is that after the 20-or-so year term is up, the customer will have built up a large net worth over time, have paid for the house or nearly so, have little or no debt and the children would no longer be dependents. At this point the term customer has enough financial assets to self insure-- that is, his or her net worth is more than enough to pay for burial expenses and leave some money for the survivors in the event of his/her death.

there's either going to be Primerica numbers, or I need someone to find other sources for this model

CONS: Two arguments against the "buy term" idea: one is that the rate and amount in the whole life cash account is (usually) guarenteed by the insurance company, while the higher-risk stock market has no such guarentees; the other is that typical families still have a need for insurance after the end of the term because their debt level has gone up (for whichever reason) instead of down; and now that the insured is older, another term costs much more and is no longer as much a benefit (meanwhile, if the insured now wants whole life, that is also much more expensive because of the insured's age). (not sure about whether this sentence should even be here, seems lonely) > If the insured has annual renewable term, the expense grows each year, but the insured does not have to prove insurability for each subsequent term. <

find pro-WL businesses to get numbers for this...?

Because the cash account can grow tax-deferred, anyone using the "buy term" concept will want their investments to also recieve this benefit. This can be done with Individual Retirement Accounts (IRAs), where pre-tax money can grow tax-free; Roth IRAs, where after-tax money can also grow tax-free; 529 and Coverdell Education Savings Accounts; and annuities, which are sold by insurance companies and are subject to the same tax rules as IRAs citation here. Annuities are often used lastly, when the investor has put as much money as allowed into the other accounts and still has need for further tax sheltering. Annuities tend to have relatively high fees and they sometimes have less flexability than other retirement accounts because they are administered by the insurance company and not an investment firmanother citation, maybe from Edward Jones. See also variable annuities. [1]

Eh, I want to maybe incorporate more from the current page, but this is my general gist. What think? Gaviidae 08:38, 30 June 2006 (UTC)

You couldn't do worse than what it is currently, so go ahead. But much better would be to do some research and have some sources to cite to back the most important points. That's essentially the reason I haven't rewritten this because I haven't done the research. Also, UL is not really a type of WL it's a type of permanent life, so consider all types of permanent life in the rewrite. - Taxman ^Talk 11:55, 30 June 2006 (UTC)

Thanks, Taxman. The only reason I mention UL is because of the 2 options beneficiaries get; option 2 going against the anti-WL argument ...Will work on the sources (I put markers where I think I can work more). Gaviidae 13:43, 30 June 2006 (UTC)

[edit] Stamp

I've taken the POV stamp off because it looks fine to me. Keeping the cleanup one on though. Anyone who wants to rewrite it, go ahead. Kjhf 11:53, 1 November 2006 (UTC)