Europe and the world is tethering on financial meltdown. When one take a closer look at countries that are pulling Europe down and countries that are preventing total collapse one can readily see the virtue in having and encouraging a life insurance industry and specifically a CASH VALUE LIFE INSURANCE INDUSTRY!
Of all the PIGS countries, Ireland is the only one with an aggressive and vibrant life insurance industry. I need to do an assessment to determine what cause Ireland's problems. Just having Life Insurance will not guarantee economic success. Britain per capita premium was the third largest in the world the last time I checked. But their economic situation is wanting because the Association of British Insurers with child like naivety uses about 70% of their policy reserves to buy 15% of the FTSE 100. Seventy percent of policy reserves used to buy WHAT EXISTS and they wonder why there is no growth and no job creation!
Of the other PIGS countries, Greece life insurance industry is the weakest of the original Democracies of Western Europe. Only Turkey was worst than Greece in terms of life insurance purchase. It is now evident that without a life insurance industry, Greece was not able to provide the capital it needed for its growth and development. They had to rely on foreigners. That created the debt that is overwhelming them now. Portugal is similar to Greece. Their life insurance purchase is a recent development. They are just one rung on the ladder above Greece. Spain is one rung above Portugal and Italy is one rung above Spain. All these countries that are low on the ladder of life insurance industry suffers from the same fate. Inadequate domestic capital formation and an undue heavy reliance on foreign capital. That is why their debt levels have become unsustainable.
Now let us look at the countries that is keeping Europe from total collapse. Although Switzerland is not in the European Union I will start with them because they are the King of life insurance purchase based on premium per capita. And what they buy is ENDOWMENT POLICIES. Not the damn fool fool TERM that Americans glorify and which is the cause of their crisis. In addition to being King of individual life insurance purchase they are King of Life REINSURANCE. With individual life insurance a country is limited to its domestic market. With reinsurance the market is the Globe! Have you heard about Swiss Re? Have you ever wondered why the world seek shelter in the Swiss Franc? Its not their banks nor their famous Swiss watches it is their insurance industry (both life and general; and re-insurance).
Next is Germany. They have a vibrant domestic life insurance industry. But they rival Switzerland with re-insurance. Ever heard about Munich Re and Hannover Re to name their top dogs. Holland, Denmark, Norway Sweden are all heavy into domestic life insurance and/or reinsurance. For those of you who do not believe that this little blogger knows what he is talking about ask yourself this question: Why does the world largest and richest investor - Warren Buffet owns over 70 insurance companies. And while you are at it do you think you can solve the problem of what made Warren Buffet rich? Any answer, any, any......... you give up? The answer is CASH VALUE LIFE INSURANCE. His general insurance portfolio helped a little but CASH VALUE LIFE INSURANCE was what did it for him. Don't you think it can do it for you and your country too?!
Thursday, December 8, 2011
Wednesday, November 4, 2009
First Installment From LIFE INSURANCE - The Cause Of Economic Prosperity
PREFACE
I came to Canada in 1990 to start a new life. Prior to that, I was a Life Insurance
salesman in my homeland, Jamaica. In Canada I continued with the career I know and
love. I was shocked when I realized the extent to which people living in sophisticated
countries like Canada and the United States of America lacked understanding of the
principles of life insurance. These people were so vulnerable, they fell victim to the
ill-founded theories advanced by the likes of Norman F. Dacey an estate planner who
wrote What’s Wrong With Your Life Insurance; A.L. Williams an ex-football coach who
wrote Common Sense; William E. McLeod a professor of Business who wrote Canadian
Buyers Guide to Life Insurance; Dr. J.J. Brown a professor of English and a Management
Consultant who wrote Winning The Life Insurance Game; and Charles J. Givens, a man
with no special competence in financial matters, who wrote Wealth Without Risk.
I came to the realisation that these non-insurance people were able to contaminate
the minds of North Americans because there was no prevailing alternative view. Most of
the existing books on life insurance dealt with sales technique or were autobiographies
of successful salesmen. There were some books which dealt with life insurance in a
generic and general way. The good old books, the authoritative texts, were all out of
print. Contemporary people were not aware of these books or their contents. Books like
Understanding Life Insurance by Isadore Dretzin and Simon A. McAvoy, published by
Crown Publishers in 1942; Life Insurance, and The Economics of Life Insurance by
S.S. Huebner published by D. Appleton-Century Co. in 1935 and 1944 respectively;
Introduction to the Mathematics of Life Insurance by W. O. Menge and J. W. Glover
published by MacMillan in 1935; and History of Life Insurance in Its Formative Years,
compiled by Terence O’Donnell, published by American Insurance Digest and Insurance
Monitor in 1936.
What is happening to life insurance in North America reminds me of a situation
which occurred with building practices in Jamaica. In 1988 hurricane Gilbert struck
Jamaica with devastating fury. After the storm, several homes were without roofs. An
interesting observation was that newer homes were more severely damaged. Older
homes, the ones built in the 1950s and 60s fared much better. The reason was simple;
in 1951 hurricane Charlie had struck causing catastrophic damage. The rebuilding
which followed, and the building which occurred while the memory of that storm
was fresh in the mind of builders, was done to specifications designed to withstand a
similar storm. Over time, memory fades, and the older builders passed on. They were
replaced by builders who, not having experienced a storm, could not appreciate the rigid
specifications which were prescribed. Gradually they developed substandard practices,
which manifested themselves when Gilbert struck.
A similar thing is occurring with life insurance in North America. Insurance
veterans have set standards and have designed policies based on hundreds of years of
experience, only to have inexperienced non-insurance nit-wits scoff at these ideas and
replace them with nonsensical ones. To compound the confusion, the life insurance
companies responded to the critics by introducing new plans. The companies did this
in the belief that they were giving the people what they want. The people seeing these
changes believe the critics were right.
So utter was the stupidity that right was wrong and wrong was right. Untrained,
uneducated, part-time agents unleashed by A. L. Williams, got respect and made more
sales than well-trained career professionals with their CLUs, Ch.F.Cs and CFPs. To buy
Term and Group Life insurance was sophisticated and smart, and to buy permanent
cash value life insurance was stupid. It was truly a case of the inmates taking over the
asylum.
Being a recent immigrant to Canada, the North American way of doing things
stood out in sharp contrast to the way I was accustomed to doing them in Jamaica. I
was brought up believing that permanent cash value life insurance was best for people,
and that it was unethical to replace any policies sold by another agent, especially cash
value plans. I found the North American way repugnant. I was not prepared to make a
career change so to put my mind at ease I went in search of the truth. I started research
to find out, which was the right way.
My findings were astounding! The evidence showed that permanent cash value
plans are more beneficial to individuals. Research proved that the idea of “Buying Term
and Invest the Difference” is a theoretical absurdity. But there was more, I found out
that permanent cash value life insurance has an enormous impact on the economies of
countries. It is one of the key factors in making rich countries rich, and the lack thereof
is one of the main reasons why poor countries are poor.
I do not know if the overwhelming impact of life insurance has ever been documented
before. This work presents irrefutable evidence. It is my hope that this work will provide
the people of the world with sufficient knowledge of life insurance so that the folly of
North America is not repeated anywhere. I also hope that people will realize that when
they buy permanent cash value life insurance, they are not only building themselves
and their families but they are building their country.
Dorlan H. Francis
Toronto, Ontario
January, 1999
I came to Canada in 1990 to start a new life. Prior to that, I was a Life Insurance
salesman in my homeland, Jamaica. In Canada I continued with the career I know and
love. I was shocked when I realized the extent to which people living in sophisticated
countries like Canada and the United States of America lacked understanding of the
principles of life insurance. These people were so vulnerable, they fell victim to the
ill-founded theories advanced by the likes of Norman F. Dacey an estate planner who
wrote What’s Wrong With Your Life Insurance; A.L. Williams an ex-football coach who
wrote Common Sense; William E. McLeod a professor of Business who wrote Canadian
Buyers Guide to Life Insurance; Dr. J.J. Brown a professor of English and a Management
Consultant who wrote Winning The Life Insurance Game; and Charles J. Givens, a man
with no special competence in financial matters, who wrote Wealth Without Risk.
I came to the realisation that these non-insurance people were able to contaminate
the minds of North Americans because there was no prevailing alternative view. Most of
the existing books on life insurance dealt with sales technique or were autobiographies
of successful salesmen. There were some books which dealt with life insurance in a
generic and general way. The good old books, the authoritative texts, were all out of
print. Contemporary people were not aware of these books or their contents. Books like
Understanding Life Insurance by Isadore Dretzin and Simon A. McAvoy, published by
Crown Publishers in 1942; Life Insurance, and The Economics of Life Insurance by
S.S. Huebner published by D. Appleton-Century Co. in 1935 and 1944 respectively;
Introduction to the Mathematics of Life Insurance by W. O. Menge and J. W. Glover
published by MacMillan in 1935; and History of Life Insurance in Its Formative Years,
compiled by Terence O’Donnell, published by American Insurance Digest and Insurance
Monitor in 1936.
What is happening to life insurance in North America reminds me of a situation
which occurred with building practices in Jamaica. In 1988 hurricane Gilbert struck
Jamaica with devastating fury. After the storm, several homes were without roofs. An
interesting observation was that newer homes were more severely damaged. Older
homes, the ones built in the 1950s and 60s fared much better. The reason was simple;
in 1951 hurricane Charlie had struck causing catastrophic damage. The rebuilding
which followed, and the building which occurred while the memory of that storm
was fresh in the mind of builders, was done to specifications designed to withstand a
similar storm. Over time, memory fades, and the older builders passed on. They were
replaced by builders who, not having experienced a storm, could not appreciate the rigid
specifications which were prescribed. Gradually they developed substandard practices,
which manifested themselves when Gilbert struck.
A similar thing is occurring with life insurance in North America. Insurance
veterans have set standards and have designed policies based on hundreds of years of
experience, only to have inexperienced non-insurance nit-wits scoff at these ideas and
replace them with nonsensical ones. To compound the confusion, the life insurance
companies responded to the critics by introducing new plans. The companies did this
in the belief that they were giving the people what they want. The people seeing these
changes believe the critics were right.
So utter was the stupidity that right was wrong and wrong was right. Untrained,
uneducated, part-time agents unleashed by A. L. Williams, got respect and made more
sales than well-trained career professionals with their CLUs, Ch.F.Cs and CFPs. To buy
Term and Group Life insurance was sophisticated and smart, and to buy permanent
cash value life insurance was stupid. It was truly a case of the inmates taking over the
asylum.
Being a recent immigrant to Canada, the North American way of doing things
stood out in sharp contrast to the way I was accustomed to doing them in Jamaica. I
was brought up believing that permanent cash value life insurance was best for people,
and that it was unethical to replace any policies sold by another agent, especially cash
value plans. I found the North American way repugnant. I was not prepared to make a
career change so to put my mind at ease I went in search of the truth. I started research
to find out, which was the right way.
My findings were astounding! The evidence showed that permanent cash value
plans are more beneficial to individuals. Research proved that the idea of “Buying Term
and Invest the Difference” is a theoretical absurdity. But there was more, I found out
that permanent cash value life insurance has an enormous impact on the economies of
countries. It is one of the key factors in making rich countries rich, and the lack thereof
is one of the main reasons why poor countries are poor.
I do not know if the overwhelming impact of life insurance has ever been documented
before. This work presents irrefutable evidence. It is my hope that this work will provide
the people of the world with sufficient knowledge of life insurance so that the folly of
North America is not repeated anywhere. I also hope that people will realize that when
they buy permanent cash value life insurance, they are not only building themselves
and their families but they are building their country.
Dorlan H. Francis
Toronto, Ontario
January, 1999
Sunday, November 1, 2009
Reading Alert
Watch this blog. As a gift from the author to the people of the world, excerpts from the book LIFE INSURANCE - The Cause Of Economic Prosperity will be posted on this site starting in November 2009. You won't want to miss it. Its a must read.
Monday, August 3, 2009
Whole Life Insurance The Key To Prosperity
With the buying of life insurance there is too much emphasis placed on price and not enough placed on benefits. When buying Life insurance like any other thing you get what you pay for. When you buy cars, paying less for a Hyundai does not give you more or a better car than if you pay more for a Mercedes Benz.
It is extremely naive to believe that in the pricing of a product which exist since 1583, that the cheaper product is better than the more expensive one. The first thing to understand is that ALL LIFE INSURANCE PLANS ARE TERM PLANS. There are short Term plans and long Term plans. Short Term plans may be renewed or dumped at the end of the Term. When you pay less for a Term plan, it is just a reflection that the probability of you dieing at that point in time is that much less. But as soon as the probability of death increases so too will the premiums, some Term plan premium could increase by up to 12,000%. To buy a Term plan that will expire for an event that is CERTAIN to happen - death, is stupidity on stilts.
Americans have fallen into a mode where they want every thing CHEAP and EASY. As a result every TV personality, every radio host and every news paper columnist know that in order to guarantee viewer ship, listener ship and readership he just has to offer CHEAP and Easy. Life Insurance because of the way it is priced provides ready cannon fodder for any unscrupulous individual who wants to drive up his/her ratings. Every Tom, Dick and Harry regardless of how ignorant he is about Life Insurance feels he can give life insurance advice.
Americans the way you are buying life insurance is a sure recipe for disaster. Buying Term Life Insurance does NOT let you save money. It PREVENTS you from saving and instead of getting richer you are getting poorer. Numbers do not lie. Since the increased purchase of Term Life insurance the savings rate in
The practice of saving is hard. It is NOT a natural tendency of mankind to save. That is why there was limited prosperity before the development of WHOLE LIFE INSURANCE. Whole Life causes forced savings. That is why countries where the people buy large amounts of Whole life insurance are more prosperous than countries where the people do not.
The talk about investing in other vehicle at higher hoped for returns is DELUSIONAL. First of all the money is NOT saved. It is not invested it is INGESTED. Secondly higher returns exist only in theory. For Madoff to consistently pay 10% he operated a Ponzi scheme. Other money managers knew he was doing something wrong because they were not making that kind of return. The best one can hope for is about 8-10% return. A participating Whole Life can give that kind of return from about 10 years onwards. People seem to think that that time line is too long. But tell me this if you are saving for the future why do you want to realize maximum returns sooner than 10 years? The only reason you would want your money sooner is to consume it.
If you are not consuming the money and you leave it to grow very few money managers can beat Participating Whole Life after the 10th year. And Whole Life goes from strength to strength from there onwards.
Read more in my book LIFE INSURANCE - The Cause Of Economic Prosperity. Its available at www.xlibris.com or at most online bookstores. You may also visit my web site www.dorlanfrancis.com and my Blog at http://dhfken-financialanalyst.blogspot.com/
Saturday, July 18, 2009
The Dangers of Term Life Insurance
Life insurance was invented in 1583. The first plan was a Yearly Renewable Term Plan. These plans ruled the life insurance roost for 180 years (In those days that was like five generations). After that time that plan FAILED and the industry was all but bankrupt. It was then that they developed a more sustainable plan - Whole Life.
In 1762 Whole Life came into being. This plan helped to finance the Industrial Revolution. It made Great Britain into a super power. Then it made The US a super power. After that it made Japan a Financial Super Power. And it financed the growth of the Asian tigers. Because of Whole Life insurance South Korea was transformed from a war ravaged country in 1953 to the power that it is today. This phenomenon is yet to be recognized by the world. My book LIFE INSURANCE - The Cause Of Economic Prosperity outlines in detail how this occurred.
The positive impact of Whole Life insurance on global prosperity is being threatened by the asinine desire of Americans to buy CHEAP life insurance. Quacks who know not what they are talking about is whipping Americans into a frenzy. As a result of this advice, Americans are on their merry way back to the 16th. century plan that FAILED - Term Life Insurance.
If this stupid thinking was contained in America it would be bad but not so bad. This practice of buying Term Life Insurance would cause America to fall sooner rather that later. Since no world power has stayed on top forever, falling sooner rather than later would be neither here nor there. The problem is that America's thinking emanates to the rest of the world and very soon everyone will be doing what America is doing. If this were to happen, this would cause a severe and PERMANENT CONTRACTION of the global economy.
The dumping on the world of the toxic assets concocted by Wall Street would pale in comparison to what would happened if this nonsense about buying Term takes further hold. The world knows that it was mortgage backed securities and credit default swaps which caused the current financial crisis. When you know what causes a problem you can know how to fix it. This current problem will be fixed and in another two or there years we will be back to where we were.
The problem with the buying of Term insurance is that the world would not even know that it is causing harm. In blissful ignorance we would submit to a less prosperous life indefinitely! The world is yet to know that it was Whole Life Insurance that has caused the world to move in leaps and bounds toward prosperity. When I see the eminent Dr. Alan Greenspan not being able to make the connection between the world's prosperity and the purchase of Whole Life insurance, I realize that probably nobody would.
Dr. Alan Greenspan in his book The Age Of Turbulence, in trying to heap praise on Adam Smith's four principles for wealth - abundance of capital, free markets, limited government and the rule of law allowing for property rights; compared the economy of Argentina with that of Germany and the U.S. He observed that Argentina's real per capita GDP at the start of the 20th. century was greater than that of Germany and almost three-fourths that of the US. But by the end of the 20th century Argentina's economy was about a half of Germany's economy and less than a half of the US. He argues that this was caused by Argentina's populist politics and less than consistent rule of law.
I beg to differ. Argentina was left behind by Germany and the US because these countries bought substantial amounts of Life Insurance, specifically whole life insurance, and Argentina did not! And as I point out in my book countries that do not buy life insurance get left behind. To prove that it was not populism that was Argentina's down fall, how do you explain the success of China? China is Communist! It has very little free market, limited rule of law allowing for property rights and plenty government! China is prosperous because it has an abundance of capital. This capital comes from the savings of Chinese and foreign investors wanting to capitalize on Chinese opportunities.
The over arching cause of prosperity is the abundance of capital. Capital is accumulated through savings. The natural tendency of mankind is not to save. That is why the advent of life insurance which allowed for the building of reserve has played such a valuable role in the development of the world's economy. Term Life insurance does not allow for any significant savings. It is as sure as night follow day that if this idiotic love for Term continues, savings will decline and there will be no capital available to finance America's prosperity.
There are more startling revelations in my book. Get your copy from Xlibris at www.xlibris.com
This article focused on the danger of Term Life to a country's economy. My next article will address the danger to individuals. That impact is even worst than it is to countries.
In 1762 Whole Life came into being. This plan helped to finance the Industrial Revolution. It made Great Britain into a super power. Then it made The US a super power. After that it made Japan a Financial Super Power. And it financed the growth of the Asian tigers. Because of Whole Life insurance South Korea was transformed from a war ravaged country in 1953 to the power that it is today. This phenomenon is yet to be recognized by the world. My book LIFE INSURANCE - The Cause Of Economic Prosperity outlines in detail how this occurred.
The positive impact of Whole Life insurance on global prosperity is being threatened by the asinine desire of Americans to buy CHEAP life insurance. Quacks who know not what they are talking about is whipping Americans into a frenzy. As a result of this advice, Americans are on their merry way back to the 16th. century plan that FAILED - Term Life Insurance.
If this stupid thinking was contained in America it would be bad but not so bad. This practice of buying Term Life Insurance would cause America to fall sooner rather that later. Since no world power has stayed on top forever, falling sooner rather than later would be neither here nor there. The problem is that America's thinking emanates to the rest of the world and very soon everyone will be doing what America is doing. If this were to happen, this would cause a severe and PERMANENT CONTRACTION of the global economy.
The dumping on the world of the toxic assets concocted by Wall Street would pale in comparison to what would happened if this nonsense about buying Term takes further hold. The world knows that it was mortgage backed securities and credit default swaps which caused the current financial crisis. When you know what causes a problem you can know how to fix it. This current problem will be fixed and in another two or there years we will be back to where we were.
The problem with the buying of Term insurance is that the world would not even know that it is causing harm. In blissful ignorance we would submit to a less prosperous life indefinitely! The world is yet to know that it was Whole Life Insurance that has caused the world to move in leaps and bounds toward prosperity. When I see the eminent Dr. Alan Greenspan not being able to make the connection between the world's prosperity and the purchase of Whole Life insurance, I realize that probably nobody would.
Dr. Alan Greenspan in his book The Age Of Turbulence, in trying to heap praise on Adam Smith's four principles for wealth - abundance of capital, free markets, limited government and the rule of law allowing for property rights; compared the economy of Argentina with that of Germany and the U.S. He observed that Argentina's real per capita GDP at the start of the 20th. century was greater than that of Germany and almost three-fourths that of the US. But by the end of the 20th century Argentina's economy was about a half of Germany's economy and less than a half of the US. He argues that this was caused by Argentina's populist politics and less than consistent rule of law.
I beg to differ. Argentina was left behind by Germany and the US because these countries bought substantial amounts of Life Insurance, specifically whole life insurance, and Argentina did not! And as I point out in my book countries that do not buy life insurance get left behind. To prove that it was not populism that was Argentina's down fall, how do you explain the success of China? China is Communist! It has very little free market, limited rule of law allowing for property rights and plenty government! China is prosperous because it has an abundance of capital. This capital comes from the savings of Chinese and foreign investors wanting to capitalize on Chinese opportunities.
The over arching cause of prosperity is the abundance of capital. Capital is accumulated through savings. The natural tendency of mankind is not to save. That is why the advent of life insurance which allowed for the building of reserve has played such a valuable role in the development of the world's economy. Term Life insurance does not allow for any significant savings. It is as sure as night follow day that if this idiotic love for Term continues, savings will decline and there will be no capital available to finance America's prosperity.
There are more startling revelations in my book. Get your copy from Xlibris at www.xlibris.com
This article focused on the danger of Term Life to a country's economy. My next article will address the danger to individuals. That impact is even worst than it is to countries.
FOREWORD To LIFE INSURANCE - The Cause Of Economic Prosperity
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
Life Insurance Tit Bits
Did you know that America is getting poorer because of the kind of Life Insurance that Americans are buying? Did you know that in 1955, 94% of all Life Insurance policies sold in the US was Whole Life and other cash value policies? US was creditor to world! In 1981 the life insurance sold in the US was Whole Life 77% Term 23% and US ceased to be creditor to the world By 1987 US net external assets was - US$420Billion Term Life Insurance that year 25% of policy sold. Onset of debtor Nation While US was buying Term Life Insurance Japan was buying Whole Life. In 1987 Japan's Net External Assets was + US$270 Billion & new creditor to World The people of SINGAPORE do NOT buy Term Life Insurance are they stupid, are they poor, are they being ripped off? The people of Singapore are some of the most prosperous people in the World. In SINGAPORE in 1996 Policies sold were as follows: Whole Life Insurance 52.6% Endowment 44.2% TERM 2.1% Get the facts about Life Insurance read my book Life Insurance - The Cause of Economic Prosperity. Visit www.dorlanfrancis.com The book is available at www.xlibris.com |
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