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Most Helpful Customer Reviews
1 of 1 people found the following review helpful:
5.0 out of 5 stars
Fascinating and Enlightening--More people should understand what it contains,
By Randal Whittle (Glendora, CA USA) - See all my reviews
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This review is from: Life Insurance (Paperback)
Succinctly: I was blown away by Francis' well-researched, well-written book. I think also that Mr. Francis, born and raised in a 3rd-world country before relocating to Canada, offers a unique perspective that most of us in the developed world fail to take into account.
Now for the details: In the financial world, it seems like there's an age-old battle over life insurance: What kind, where it belongs, what is a ripoff to the consumer vs. what is not... Francis handily puts the arguments to rest--at least for those honest of heart and willing to dig deeper than the apparently obvious. Those "Buy Term and Invest the Difference" arguments appear valid on the surface, but like many things that seem "obvious" at first, they fail to hold up to real scrutiny. The "buy term" arguments fail to take into account *actual* rates of return in the stock market (NOT "average"--which is something entirely different and fictional), taxation on the side account, the cost of lost premiums, the lost death benefit, and most of all, basic human nature (which makes it very difficult to buy stocks when the market is down, or sell them when its up--nobody wants to sell the very thing that has made them money, yet that's what you must do, else you're simply not capturing the gains you think you have). When you dig deeper, you find that the side account would have to yield an actual 9 to 10% *consistently*, every year, for 30 years just to equal what a maximum-funded whole life contract will do by default--and then when those 30 years are up, the term insurance will have expired and you would lose that death benefit too (but not with the whole life). Considering the Dow over the last 80 years has provably yielded only an *actual* 4.6% (with a meaningless average of 6.5%--again, the only thing that matters is *actual*), and mere 0.2% over the last 11 years (2000-2010), just how confident are you that you're going to be the one person that beats guys like Warren Buffet over your 30 year slice of working life? In the last 15 years, only 1 fund manager (Bill Miller at Leggmason) out of thousands out-performed the S&P 500 index, and even Miller, in year #16, crashed and burned--all that risk and "return", in the end for...what? A return that doesn't even rival what life insurance has done in the same period. Granted, the market may have treated you really well in the 90's...but do you still have it? Did you keep those gains? Not counting additional contributions, if you were making even just 7% overall, you should have twice as much today as you had 10 years ago, and 4 times as much today as you had 20 years ago. Do you have it? The short answer: No. You don't. So the market giveth, and it really, really taketh away. You're speculating, and deep down you know it. You just don't want to admit it! What you're doing is *not* "investing"--its gambling. ...and that's partly what Francis posits in the book. He doesn't talk so much about the individual good as I just did here, but rather in a macro-sense: Societal and Nationally-speaking. One basic argument is that Wall Street doesn't really build much of anything. They mostly just feed off of the basic greed of people, enticing them with promises of big returns while they quietly suck fees away from your investments whether you're doing well or not. But nothing of real, lasting value is really *built* or created. Meanwhile Life Insurance companies cannot afford to try to prop-up this quarter's returns--they, of necessity, MUST keep an eye on the long-term, as they have long term contractual commitments to their policyholders (and regulations) that require them to do so. And those policyholders aren't just "people", but oftentimes major institutions like Banks that use Life Insurance as a repository for their Tier-1 Capital (see "The Pirates of Manhattan" by Barry Dyke, here on Amazon at http://www.amazon.com/Pirates-Manhattan-Barry-James-Dyke/dp/0979317703/ref=sr_1_1?s=books&ie=UTF8&qid=1302052374&sr=1-1 ). As a result, life insurance companies invest in and provide capital for companies and governments primarily by purchasing their bonds. Francis argues (quite well, I might add) that the very existence of capital from life insurance companies--which of course comes from policyholders themselves who bought and own life insurance--serves a vital macroeconomic purpose in allowing a nation to grow, establish infrastructure, and essentially enables prosperity. Apparently, advanced economies and life insurance go hand-in-hand. You could argue life insurance follows, but it should be clear that it either precedes, or at least grows co-incident with, a nation's developing economy. The capital to grow has to come from somewhere, and a major (THE major?) source of it is from life insurance premiums. Additionally, Francis argues that this provides a stabilizing effect to economic growth, unlike the roller-coaster stock market that so frequently fuels manias and bubbles--only to draw so many people in for the inevitable collapse. Granted, I readily admit that I'm a proponent of life insurance--at least the "good" kind (Whole Life--yes, there are some really "bad" policies too--generally "Universal Life", but if you get the "right" kind--Whole Life--its hard to go wrong) which is solid and can be relied upon whether times are good or bad. And not just because I'm a financial advisor who often recommends life insurance, but also because I am a consumer/user who owns it, and walks the walk. I shouldn't say how much, but I will say I regularly put a lot--a whole LOT--into policies on myself and family--it is my primary savings vehicle. I rest easy at night knowing the money is safe, growing tax-free at a respectable rate of return, liquid and available to me at any time, for any reason, and serves as "seed capital" to finance any new project, business opportunity, or major expenditure that should happen to come along. In addition to protecting my family in the unlikely event of my untimely demise, it also protects me if I become disabled and would also pay for my long-term care if I'm laid-up. But most of all, I've used it as my own private bank. Using it. I have recaptured the costs and interest that I would otherwise have lost to banks & financing institutions as I financed cars, and taken advantage of business opportunities. I have used it to acquire rental properties and build care facilities. It has been a tremendous core holding in my financial life, and because I could access and use it without restriction, has delivered returns far above the obvious. I realize "Life Insurance" isn't a subject most people care to investigate (and many are even put off by the very idea since it also implies a discussion about the end of life). And unfortunately, discussions about it in its various forms amongst those who claim to "know" something about it generates precious little light amidst a whole lot of heat. In general, I am disappointed with both the quality and the number of volumes that deal with the subject, and I am particularly disappointed that this work by Francis isn't more popular or well-known within the genre. It should be. I can think of about 5 really, really good books on life insurance (that are well-researched, truthful/correct, non-gimmicky), and this one by Francis should be right up there among them. If you are a policy-holder, or are thinking about becoming one, this book offers solid arguments why what you would be doing is good not only for you and your family, but for society as a whole, in far-reaching ways you never even realized before. Shameless plug: One of those "very good books about life insurance" that I mention is "Live Your Life Insurance" by Kim Butler, and I'm proud to say I wrote the Foreword to it (here on Amazon at http://www.amazon.com/Live-Your-Life-Insurance-Revitalized/dp/1450559484/ref=sr_1_1?ie=UTF8&s=books&qid=1302053742&sr=1-1 ) While Francis' book here is excellent at showing the macro-economic effects of life insurance are beneficial to society and the economy as a whole, Kim's book shows you the detailed how's and why's of a policy from the owner's perspective--you. More specifically, how the owner of a policy should also be its first beneficiary while you are alive, without having to pass away. Its excellent lesson, and it teaches these important points in less than 40 pages of reading. Again, if you own a life insurance policy and have begun to wonder why, Francis' book along with Butler's (and even Dyke's) will remind you. And if you don't yet own one, consider reading this (and the others) if you want the *real* truth about life insurance--that it is an excellent financial vehicle that does a whole lot of good, not just for you and your family, but for many others you don't even know. You can feel good you're doing good for others even as you're doing good for yourself! Randal Whittle
5.0 out of 5 stars
Foreword To Life Insurance,
By Dorlan H Francis "DHF" (Toronto CANADA) - See all my reviews
This review is from: Life Insurance (Paperback)
FOREWORD
BY GUILLERMO ASSEFF-CAIAT You are about to read one of the most refreshing books ever written in the field of life insurance. Dorlan Francis approaches the subject from a social and philosophical point of view--long overdue in a financial marketplace where quick gain and speculation have overtaken long term aims and commitment. For the life insurance professional, this is a very valuable reference book. It is also an exceptionally well written panegyric of a financial product that has been the engine behind the success of the most advanced societies today. For the layperson, Dorlan's marvelous handling of the concepts renders complex issues into a natural flow that inevitably leads to full comprehension. Dorlan clearly and finally puts to rest the fallacy of the "buy term and invest the difference" theory. In the process of so doing, he exposes the profound meaning of life insurance in a manner that transcends the intended purpose of his book and creates a capital work on the subject. About Guillermo Asseff-Caiat: * Past President of the Canadian Association of Insurance and Financial Advisors (CAIFA) * Former Vice President, Operations EFI Financial Services Inc. * Life Member of the Million Dollar Round Table (MDRT) * Court of the Table Member (MDRT) * Honour Roll Member (MDRT) * Fifteen years recipient of the National Quality Award (NQA Thanks for your support Dorlan H. Francis CLU, CFP, Csc
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