Dec
5
2006
Pros and cons of low-load life insurance policies
Author: Byron UdellLow-load funds such as Ameritus or USAA are sold by agents that are non-commissioned based. Many reporters suggest consumers try these places out because there is thought to be “no pressure” selling tactics. However the real story is that most of the time, these products are not the best product (or cheapest) for that particular individual but those agents have a vested interest in selling the product.
At brokerage firms the main concern is to get consumers the right product at the right price. And there’s lots of competitive quote services making it easy for consumers to get several quotes at once via the Internet and keeping these brokers honest. How? If one broker doesn’t quote a consumer the lowest priced product available for their needs, another one will.
Following is an example I’d like to share with you that illustrates the additional cost of low-load policies. These costs over the course of a 20 year term really do add up. You be the judge and decide if you think low-load or fee only advisors are worth it.
20 Year level term life policy – Non-smoker; 30 year old male
Preferred Plus Preferred Plus
$250,000 $500,000
lowest price $135.00 $225.00
USAA $160.00 $250.00
Ameritus $190.00 $310.00
December 5th, 2006 at 12:22 pm
The other thing that you would want to consider is that USAA has superior ratings than some of the other quotes that you might get out there.
Based on some factors like for Life Insurance:
• AM Best: A++ Superior
• Moody’s: Aa1 Excellent
• Standard & Poors AAA Extremely Strong
I would say that you dont want to get life insurance and then come to find out that the company has gone bad or wont pay up.
When it comes to the Brokerage Firm USAA has:
USAA is the top-rated brokerage firm for the things that matter most to traders: costs, trade speed and reliability, according to the American Association of Individual Investors Member Broker Survey for 2005.
The results appeared in the February 2006 issue of AAII Journal.
The survey asked AAII members which discount broker they use and the primary reasons for choosing a broker. It also asked members to rate their satisfaction with their broker on the following specific criteria:
• Trade Price: The price at which an order was filled and how close it was to the price when placed.
• Execution Speed: How quickly an order is filled.
• Reliability: How well the member is able to access their broker when they wish to.
• Overall Satisfaction.
USAA ranked No. 1 in all factors out of the 11 firms that received the most member responses in the survey. The firms other than USAA that were looked at were: BrownCo, Scottrade, Inc., Interactive Brokers, Fidelity Brokerage Services, Vanguard Brokerage Services, Charles Schwab, Harrisdirect, E*Trade Financial, Ameritrade, TD Waterhouse.
I don’t work for USAA btw but I do support them because they are honest and have been good to me, non the less Kiplinger’s magazine rated USAA there favorite company.
Okay enough about that