Tracey stopped by tonight. She was a bit tense as she had just come from a meeting with Cliff (our financial planner). Over the last couple of weeks we have been discussing what to do with Cliff. Some people have expressed a concern in his financial abilities. I haven't taken much thought to Cliff as unlike Shannan or Tracey - I don't have high expectations of Cliff therefore I haven't been disappointed yet. :-) The main reason for Tracey's visit tonight was to find a "tacky tourist" costume for her work function on friday. Since I love to play dress up and am building my own little "tickle-trunk" - I offered her some help.Instead of discussing what constitutes a tacky-tourist outfit we discussed her meeting. She has a lot of questions that were not answered by Cliff and I think that this is main cause of her distress. The main concern is her contribution to a life insurance plan which may not be suitable to her needs at this point in her life. The problem is that if she cancels now - she will only get back half of the money she invested in it. All this talk about life insurance made me curious on the topic. So I ran some Google searches. There are 2 types of life insurance - term vs permanent. I think before we can broach the subject of whether or not we've been screwed over by Cliff - we have to understand what it is that we've boughten into. Both of us have "term insurance". The difference between the 2 can be found here. I think Tracey and I will continue our conversations on investment as it's a good way to learn from each other - plus it also gives her a chance to vent and get things off her chest. In the grand scheme of things - money is not the most important thing in your life so don't let it stress you out.
3 comments:
Hi Kim! Just to clarify, what Cliff offers is actually permanent insurance. The first giveaway is the increased monthly premiums compared to a term policy with the same amount of coverage.
Usually permanent insurance has a savings component to the plan therefore increasing the premiums with the promise of receiving money back at some point of the plan as is the case with what Cliff is offering. The ironic thing is that the insurance company will probably purchase a term policy to cover any benefits to be paid out if anything should happen.
There are some situations where a permanent plan may be right for certain individuals but from what I've read term is the way to go for most individuals.
Hey Frankly,
Thanks for the comment. Yes - I agree that Tracey may have boughten into a permanent plan. Because we both bought life insurance through him - we compared our contributions and discovered that I was contributing like 15% of what Tracey was putting in. After this discovery we talked more about what our investment porfolios looked like. It's faux pas to really get into the nitty-gritty-financial details of any friend but we skimmed enough on the surface to figure out that I had specific goals that I wanted to achieve in a particular time frame and Tracey was looking to "make money" (non-specific goal with no time frame). So I'm sure there may have been a miscommunication between Cliff and her at the beginning of the analysis. Anyhow she's working towards a resolution to this situation and I'm sure she will find someone or something else that will suit her needs better.
I think Cliff has a real problem communicating, and its unfortunate as a financial planner, cause that is a key quality. When I met with him, he couldn't really indicate to me what he could do for me as a financial planner. He said "I can make a plan for you". Now really, what is that? I can say that to people too.
I probed him for more detail on what he would do, and still I didn't get much out of him. With that, I left it at that, and didn't contact him again.
I think its important to feel really comfortable with a FP, and can communicate easily and freely. After all, it the money you work hard for. I personally didn't find him too easy to talk to.
JMO. = ) (sorry not in the best mood today!)
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