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From: davec@dciem.UUCP (Dave Cote)
Newsgroups: net.invest
Subject: Re: Life Insurance (TIAA)
Message-ID: <1532@dciem.UUCP>
Date: Tue, 23-Apr-85 13:22:41 EST
Article-I.D.: dciem.1532
Posted: Tue Apr 23 13:22:41 1985
Date-Received: Tue, 23-Apr-85 16:23:13 EST
References: <2423@drutx.UUCP>, <10@utastro.UUCP> <702@houxl.UUCP>
Organization: D.C.I.E.M., Toronto, Canada
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> 
> Well, my wife works for TIAA (Teachers Insurance and Annuity Assoc.)
> so I looked fairly closely at their life insurance.
> What I found was that in many cases IEEE offered a better deal
> and that's what I bought.
> 
> The clincher was the 50% premium dividend (i.e. refund!) that the
> IEEE plan has been paying for a while.  These dividends are not
> quoted in the rate tables for any policy I've seen so you need
> to ask before making a decision.
> 
> 			Marc Harrison
> 			AT&T Bell Labs - Holmdel

The source of term life insurance is as important as the decision to go term
vs whole life.  If you buy through an organization such as IEEE or TIAA, you
have to remember that you are dealing with three parties: 1) the organization
with which the insurance is affiliated, 2) the administrator of the insurance
program (essentially the middle man who gets the good rates for the organization
members), and 3) the insurance company.  You have three links in the chain,
any one of which may break at any time.  The organization may decide not to
deal with their present administrator if a new one comes to them with a better
offer (result: you finish up the present term of insurance with the current
administrator's contract company and then switch to a new administrator and
possibly a new company).  The administrator may decide to stop administrating
(I suggest that most administrators are small operations) (result: a new
administrator who may contract with a different company replaces him).
The organization may decide to stop being associated with life insurance or
the organization may dissolve (result: the insurance company may permit you
to switch to one of their own policies).

You may think that switching companies is no problem, but what happens if
your health changed and no one will insure you?  You are up the creek without
a paddle.  Thus, I prefer to deal directly with an insurance company when
buying term insurance that I will be counting on for several years.  The
rates may be a little higher (around $250/yr for $100,000 of decreasing
term from age 27 to age 60), but they are still lower than whole life
and I sleep a little better at night.

For term that I am counting on for a short time (5 yrs or less), I am
an advocate of the term insurance offered through various professional
organizations.