Where Glenn reads and reviews books on life insurance, financial planning, and related stuff.

This could hardly be termed a book. More like a pamphlet. Sixty pages and all large print. Plus a few pages of ads at the end. Realistically, the back of the book summary does indicate that this is a ‘reference guide’ that is ‘compact’. For $20 though, they could have made it a little less compact.

The purpose for the guide seems to be as some sort of primer. For who? I’m not sure. The first part of the book contains extremely oversimplified definitions that are useless to any life insurance broker. A one paragraph/two sentence definition of variable universal life is hardly of use to a consumer either.

Conversely, the last part of the book is billed as ‘a reflection of more commonly made mistakes that can be prevented’. None of the points in that section would I classify as commonly made. Not that they might be made, just that the situations depicted are not what I would call common. Transfer for value rule? Gift of a policy subject to a loan? Instead of common mistakes, this section focuses on advanced financial planning matters that are incomprehensible to the consumer, and lack any sort of depth of information that would be useful to an insurance agent. Contrast that with the almost childlike definitions in the first section of the book and you’ve got a book that is at complete cross purposes.

What however is far worse in my opinion, is the bias the author shows in the first third of the book. It strikes me that this book is from the school that whole life insurance is the answer to everything. Some sections are rife with suggestions and examples that show this bias. Some examples are:

• A suitable use of term insurance is described as “there is a need to supplement cash value insurance”. Listen, either the consumer needs permanent insurance for lifetime needs, or they need term insurance. If they have a permanent need, they don’t need term insurance. The purpose of term is for the insurance NEED not to supplement a permanent need.
• In talking about the idea of ‘buy term and invest the difference’, the author states ‘this approach is suggested for those individuals who need and can afford cash value protection….’. Really? No. If you need cash value protection, you need permanent insurance. So buy it. If you need temporary insurance, buy term. The author seems to be grudgingly forced to mention this concept but clearly doesn’t seem enamoured with it.
• Some of the sections on uses of cash value are just plain wrong. “Long-term financial security in respect to replacing lost earnings from the premature death of a parent”. That statement should never be read by a consumer, and, well, I don’t have much good to say about a professional promoting this idea. The loss of earnings of a parent due to death is a textbook case of the use of term life insurance and not cash value life insurance.
• ‘ Certain that funds will be available for a child’s college education…’ is mentioned as the second reason for cash value insurance. This just stinks of sales techniques of life insurance agents who are there to sell insurance at any price. There are far better ways to accomplish college savings than the purchase of a small whole life policy.
• The author mentions that limited pay cash value insurance is suiteable where the owner can ‘afford the higher premiums’. While not much on it’s own, in conjunction with the rest of this section it speaks strongly to the idea of selling insurance based on price. I’ve seen videos of widows who are flat broke because they bought cash value insurance but didn’t have enough coverage (and thus ran out of money) because they couldn’t afford enough insurance. They were sold based on price, not insurance need. That’s an example of why this type of approach is so very wrong - people do actually die and end up being underinsured.
• Mention is made of key person insurance as being a good use of cash value insurance. Again, I disagree.
• The book also talks briefly about cash value insurance money being held as part of the general funds of the insurance company. There is a paragraph on all the wonderful things that you can do with this money. The section neglects however, to talk of what happens in many cash value policies if this general fund doesn’t prove as wonderful an investment as advertised. Considering that many insurance companies have been successfully sued in the last dozen years over this scenario, it would seem to be a bit of an oversite.(Aside: There’s also danger in portraying this ‘general fund’ as some sort of bank account that earns money that is transferred to the consumer through their policy. That is not what happens. The insurer looks at their books at the end of the year and determines what type of dividend credit they are going to pay. It’s not neccessarily tied tightly to some sort of fund that earns a specified amount of interest. The insurer might decide to pay 4% instead of 5% just because they have plans next year that will require capital.).

In summary, this book is overpriced at $20 and should be considered an embarrassment to someone billed as an estate planning expert in conjunction with a professional financial services organization. It appears to be little more than an ego stroke for an old whole life insurance believer who thought they’d like to write a book but couldn’t be bothered to waste their time actually writing it.

Title: The Life Insurance Handbook, by Louis S. Shuntich, J.D., LL.M., ISBN 1-59280-057-2
Rating: 0 stars out of 5. Blech!.
Who should buy this book: Not consumers, not agents, not financial planners.

Before I review the book, I need to take a moment to rave about the author. Ben G. Baldwin is clearly a life insurance agent that can call himself a ‘financial advisor’. I never expected to run across a book like this in my reading - factually correct and boatloads of information on everything from who should buy various types of life insurance, to annuities. And! he’s managed to write over 400 pages of text without any sales hype.

The New Life Insurance Investment Advisor is primarily a textbook on Variable Universal Life. I’m not kidding about the textbook part. This book could easily be used in a course on Universal Life Insurance. It should be required reading for any life insurance agent. Any new life insurance agent who reads this book is going to know more about these complex products than many experienced agents. Even extremely knowledgeable and experienced agents could use this book as a refresher and reference tool. In short, if you are a professional life insurance agent you should have a copy of this book.

What it is - an extensive and factual - yet still quite readable - compilation of information on variable universial life and annuities. Legislation, sales tools, how to get life insurance quotes, comparison methods and calculations, who should buy what product at what age, on and on. As I mentioned, there’s no sales hype in the book either. The author readily admits that he loves variable universal life - but he states quite openly that if you’re not prepared to also use it as an investment you’re probably better off buying term insurance. It’s hard to find fault with a book that’s that open about your product choices and is backed by an author armed with more facts (and the ability to present the facts properly) than ebay has video games. In short, what this book *is*, is required reading for any life insurance agent or broker who sells variable universal life.

There is also a reasonably extensive section on annuities. The annuity section is slightly more technical than the life insurance section, without the benefit of covering the basics. Nevertheless, again very suitable for an insurance broker to read over.

What it is not - a quick read or primer for the uninformed consumer. Admittedly if a consumer managed to read this book, well, I don’t envy the job of a poorly informed agent trying to then sell that consumer a universal life insurance policy. But the fact of the matter is that it’s probably too overwhelming and just too much information for a consumer to pick up and read through.

Title: The New Life Insurance Investment Advisor, by Ben G. Baldwin, ISBN 0071363645
Rating: 5 stars out of 5. Best product book by an insurance agent that I’ve ever had the pleasure to read.
Who should buy this book: Life insurance agents, brokers and financial planners.

The best part about this book is that I’m done reading it. My goodness, that was painful.

I think the book was trying to be a story telling book like The Wealthy Barber. It doesn’t pull it off. Instead of adding to the book and making the information palatable, the ’story’ that wraps the facts ends up being something I had to wade through. Neither is the story believable, though I guess that’s just the writing style.

The Facts Of Live: how to build wealth and protect your assets with life insurance started off poorly before I even opened the book. It’s right from the sales book where life insurance is the miracle cure for what ails you. The only thing missing is how life insurance is going to cook my meals and clean my house. I guess when you’ve got a hammer, everything looks like a nail.

The story tells of a retired life insurance agent who is the summer house guest at the family cottage and JUST. WON’T LEAVE. Geesh, don’t we all have family like that. Throughout the course of the summer the former agent walks each of his family members through their insurance problems, all the while using his retirement hobby - a breadmaker.

The book also has some extremely poor sales tactics presented as facts. The author presents the 1970’s idea that term insurance versus permanent is like renting versus owning. Sales people use this because it sounds so good - everyone wants to own right? Unfortunately we happen to be talking life insurance here. It’s a contract with an insurer. Nobody is renting or owning anything. That’s like saying I should pay for collision insurance on my $1000 car, because that’s like ‘owning’ my auto insurance policy. Huh? People need to buy insurance based on their needs, not based upon sales presentations and poor analogies.

Another example of the book presenting sales techniques guised as facts is in talking about future value. Apparantly the author missed out on watching Dr. Evil’s ‘One Meeeeelion Dollars’ . One Meeeelion Dollars in 1960 was an awful lot of money. Twenty years from now in 2035 it’s not likely to be very much. There’s this little thing called inflation that he completely neglects to mention. In short, trying to present the shock value of $925,000 as a lot of money is fine. Trying to present $925,000 as a lot of money in twenty years without noting that it’s not the same amount of money in todays dollars is they type of sales technique that can leave people short of cash in twenty years. This is where Gramma comes in to cash her life insurance policy she’s been saving for junior’s education. Sorry Gramma. When you bought that policy in 1975 the $3000 cash value would put junior through college. Now you need $30,000. Did the agent forget to mention inflation? Of course if the agent had tried to sell you a $30,000 cash policy back then you’d have balked right? Much easier to sell a $3000 policy. Oh well, junior can get a job. Just make sure that’s not you needing to get a job just when you thought you were going to school.

The moral here is that this is why insurance agents have ears. That gives them something to land on when you throw them out after they use these types of tactics.

Title: The Facts Of Life: how to build wealth and protect your assets with life insurance, by Paul Grimes, ISBN 0470833254
Rating: 1 star out of 5. Barely.
Who should buy this book: Friends and family of the author.

What can I say about this book that hasn’t already been said? This is the best written and most widely read financial planning book of all time. It’s also turned into a tv program, it was that successful. Well, I suppose I could brag that I’ve met the author a number of times (he lives locally) or that I own my autographed copy that Mr. Chilton gave me.

Anyway - I read this book cover to cover when it was first released well over a decade ago. The book is still a vital read today for anyone - investors, actuaries, consumers, even insurance agents and financial planners. The reason it’s such a great book is that it’s chock full of fabulous and grounded advice for everyone. The reason it’s been so wildly successful is because it’s actually delightfully readable. It’s an easier read than a pocket novel. I can personally guarantee you’ll enjoy this book no matter what your background - and you can read it knowing that the author David Chilton is really as nice and down to earth as the characters in his book.

The Wealthy Barber is the story of a common sense barber who’s spent his time learning about financial planning. In the book he relays this information on to a number of customers who come in once a month for a haircut. Each haircut is a different lesson, one on mutual funds, one on life insurance, and so on. The story is told in the first person, by one of the guys who’s in getting his haircut (his successful sister is also along for the lessons, so there’s no ‘guy’s barber shop’ atmosphere to the book).

Title: The Wealthy Barber, by David Chilton, CFP. ISBN 0761513116
Rating: 6 Stars out of 5.
Who should buy this book? Absolutely everyone. If you’re a consumer, there’s a wealth of knowledge you’ll be able to ingest without dozing. For financial planners or industry experts, it’s a good dose of back to basics.

This book is like a bad porn movie. I had no idea where he was going at the start of the book, but then it got interesting. And the finish! Well, let�s just say it was worth the wait.

The author I think does himself a bit of a disservice when he titles the book �Pension Strategy for Canadians�. I think the book is well suited for any investor who wants a bit of a handle on their finances. It’s also equally relevant to Americans as far as I can tell, there seemed to be little if any Canadian specific content.

The book really talks about how to diversify your investments to earn the best long term rate of return at the lowest risk. The author indicates in the book that most people think they know what a diversified portfolio is, but in reality are wrong. As I�ve been in the insurance business for about two decades and know what a diversified portfolio is I found that a bit of an odd statement. Until I continued reading and realized the author was absolutely correct - I was waaaay off base when I thought I knew what a diversified portfolio was.

The section in the book on standard deviation gave me an ice cream headache, and I already know what standard deviation is and how to calculate it. Nevertheless, that�s the worst thing I could say about the book, and I don�t think his math is material to the appreciation of his message.

The author does ultimately build a credible case for how he suggests you create a properly diversified portfolio. Then at the end of the book he actually pins the solution down to some exact numbers. Fabulous. I expect you could take that part of the book verbatim and apply it to your investments.

In summary this is a great easy to read book that anyone who invests more than $10 should pick up and read.

Title: The Pension Strategy For Canadians, by Andrew Springett, CFP. ISBN 1-894663-73-X
Rating: 3.5 Stars out of 5.
Who should buy this book? I strongly recommend this book to anyone who invests.

Welcome to my first blog post - ever. Quite the non-event. I was surprised how smoothly the blog software installation went. I had originally tried Moveable Type software - it seemed a bit more robust. However the templates weren’t installing smoothly. And since this is basically a hobby site I didn’t feel inclined to spend much time figuring out how to make the templates work. Wordpress OTOH went in and ran first time. So by default - Wordpress it is .

By way of introduction, I’m Glenn. I’ve been in the insurance and software field for about 20 years now and currently own and manage a life insurance hosting company. Recently I’ve been dragged into search engine marketing for many of my clients as well - most life insurance agents want to develop leads and sales from their websites and this neccesitates our driving traffic to their site.

I also run www.actuarialoutpost.com, a site for actuaries. Actuaries are the folks who price insurance, kind of a boring statistician. I handle the advertising and tech issues for the site in my spare time, leaving the moderation to my friend Traci (who is also active in the actuarial community).

But this is starting to sound like I’m looking for a date or something (I’m not) so enough about me. I set the site up because I am a voracious reader and figured I’d try my hand at blogging. As I’ve been kicking around the insurance field for so long, some of it’s rubbed off on me, so I figured reviewing insurance and related books would be right up my alley. So here we go :).