Tuesday, October 6, 2009
40 Years of BTID
"Why is life so complicated? The list of culprits includes tax code writers, whoever it is who comes up with the rebate procedures for electronic gadgets, and life insurance salesmen. ... Now you have all kinds of enhanced features to contend with: Guaranteed Minimum Income Benefit, Return of Premium, Equity Linked Universal Life, Lifetime Withdrawl Guarantee. ... Buy level-payment term insurance. This product has a flat annual rate, no cash value at the end and no decisions for you to make except to send in the premiums. ... The reason sales agents don't push term insurance is that it's so simple and so easy on comparison shoppers, and as a result so cheap that they can't make a living off the commissions", William Baldwin (WB) at Forbes, 5 October 2009.
I agree with WB. For 40 years it's been BTID, buy term, invest the difference. The more complicated a financial product is, the more laden with fees.