Why doesn’t everyone do this?

You know way back when, boy scouts were expected to know how to fight. And not just over donuts either.

Once upon a time, there was a “master at arms” badge. This was no joke. Scouts were expected to be proficient in single stick, quarterstaff, boxing, or wrestling (not rastlin’).

Today? Not so much.

It reminds me of how life insurance used to be sold to practically everyone.

Back when most Americans were self-employed, more than 50% of them owned and used whole life insurance. Those who didn’t had mortgages through the bank or used something called an “endowment” which is a modified form of life insurance.

People used life insurance as a savings. John Wanamaker (the “father of truth in advertising” and the man who founded what is today Macy’s) once famously said that life insurance was the best investment he ever made.

Was he crazy?

Wanamaker was criticized for his idea of “self-financing” in which he used his whole life policies to build Wanamaker’s Department Stores. And yet, his stores became some of the strongest, most well-capitalized, and most respected in the United States.

So…why don’t people use whole life anymore?

Actually, they do. Most major mutual insurance companies have several hundred billion in assets. Someone is buying all this insurance (actually, lots of someones). And, that money doesn’t belong to the company. It belongs to the owners of the company — the policyholders.

But, I “get” where this question comes from. Lots of people DO buy whole life, and they do it because it allows them to “become their own bank.” But… lots of people DON’T know about it.

They’re baffled as to why they weren’t invited to the party.

When I explain whole life to people, I always get the same reaction: “why doesn’t everyone do this?” followed by, “This seems too good to be true.”

These people are (usually) smart, savvy, well-educated. So… why haven’t they heard of this before?

Good question. Why HAVEN’T you heard of this before?

I can’t answer that one.

Maybe it’s regulatory. Life insurers are legally prohibited from calling life insurance a savings (even though this is exactly the purpose of the cash value in a policy).

Maybe it’s the government’s broken education “system.” You know… it spends a lot of time uneducating people. Maybe you got caught in the machine.

Who knows?

I mean, I guess if someone thinks something is too good to be true, they shouldn’t use it.

At the same time, if whole life was too good to be true, it wouldn’t have survived so long. It’s not a magic product. It’s freakin’ life insurance.

There’s also this weird phenomenon where people throw rocks at things they don’t understand or have never heard of before.

Lots of things looked too good to be true when they were first invented. Por ejemplo: When the lightbulb (and the electric grid) was invented, it was “too good to be true.” How could you possibly provide unlimited light to every household in the country? Must be a scam.

The funny thing is life insurance ain’t new.

It’s over 150 years old. And, the basic structure of it hasn’t changed. Yeah, there are lots of bells and whistles. And, yeah, today’s policies are a bit more complex because they’re customizable (if you try to “go it alone,” and buy something “off the shelf,” be prepared for an exercise in frustration).

So, maybe this is just one of those things you missed out on. Kind of like how some people are amazed that they can get a checking account (yes, these people do exist, and no they’re not mentally retarded).

Anywho, if you want to get in while the gettin’s good, get on ye old email list…

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David Lewis

This post brought to you by //The Rogue Agent//. David has been a life insurance agent, and worked with some of the oldest and most respected mutual life insurance companies in the U.S., since 2004. Learn more about him and his business, here.