The purpose of life insurance is supposed to be to replace your lifelong earning potential for someone who was depending on it (if you're raising a kid, eg), and most people's lifetime earning potential has been trending down from what they were expecting https://twitter.com/Lexialex/status/1317927771297828864 …
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Replying to @arthur_affect
Most people I now right now view "life insurance" as something that will cover their funeral and at most a year of their income for their family.
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Replying to @brigidkeely
One problem is that the "right time" to buy life insurance if you're ever going to buy it is when you're as young and healthy as possible, before they have any reasons to bump you into a more expensive category But that's when most people have no idea if they're going to need it
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Replying to @arthur_affect @brigidkeely
Like, bluntly, if you never end up having kids or other dependents then life insurance is objectively a waste of money (It mathematically HAS TO BE, the actuaries' whole job is to make sure an insurance policy has negative expected value, that's how the company makes money)
5 replies 3 retweets 18 likes -
Replying to @arthur_affect @brigidkeely
My parents bought me a life insurance policy when I was a baby. I’m 60 now. Cash value is 5 figures, against which I may borrow at a hardwired rate of 5%. Pays dividends, and I have to pay tax yearly because I’ve got back more than total premiums. Sucks to be them actuaries.
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Replying to @cxarli @arthur_affect
LOL! I'm really glad this is working out for you. I don't know that insurance policies work like this now, which is why I haven't gotten one for my child although I considered it when they were a baby.
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Replying to @brigidkeely @cxarli
It usually does work out for them because the odds of having to actually pay out in the first several decades of life are so low and the lapse ratio is so high
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Replying to @arthur_affect @brigidkeely
It worked out that way for my sisters. I think all of them cashed out as soon as they were able. One may have lapsed. But it’s been a boon for me.
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The "lapse ratio" is the biggest thing that makes you cynical about insurance if you know the industry, that the eggheads absolutely do know and legally have to take into account how many customers will just give up on paying premiums and get nothing out of the policy
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