Coffee heat rising

Return-of-Premium Insurance: Is it a good idea?

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Over at Bargaineering, Jim recently discussed an relatively new insurance instrument called “Return of Premium Insurance.” This is a type of term life policy whose issuers promise to return your money after the policy expires.

In term insurance, you pay a specific monthly or annual premium so that the company will pay a benefit to your survivors should you die an untimely death. Unlike whole life insurance, which builds something like equity at a very low return, term does not pretend to be any sort of “investment.” It exists simply to protect a spouse or children from the loss of your income. A policy normally has a beginning and an end (typically ten to thirty years), after which it expires and, if you still need coverage, you have to buy a new one.

Return of premium (ROP) insurance offers to return your premiums after the policy expires. In other words, if you paid a total of, say, $15,000 over the term of the policy, at the end of the term you get the 15 grand back. Thus you appear to be getting something for nothing: the insurance coverage works like any term policy, but the amount you pay for it is returned to you if you outlive the policy.

This, we’re told, amounts to a kind of “investment,” and oh, joy, the money you get after 30 years is tax-free! (It’s really not income: it’s a refund.) This strategy supposedly has the advantage, in addition to providing “free” insurance coverage, of forcing you to save over a long period.

Let’s think about that.

ROP insurance costs significantly more than ordinary term insurance, and the costs are going up in 2010 because regulatory agencies now require companies to return a significant portion of your premiums should you cancel the policy before the end of the term. These policies can cost as much as 50% more than a plain term policy. If you can afford to pay that much for life insurance premiums, it stands to reason that you can afford to pay the cheaper amount for the same coverage with a term policy and put the difference away in a mutual fund.

A few insurance premium calculators that don’t make you a target for insurance salesmen reside on the Web. According to this one, an ordinary 30-year term policy for a 30-year-old man ranges from about $620 to $825 a year. A middling premium for term insurance, then, would be about $720. A similar calculator for ROP shows him paying $2,270.50 a year for a 30-year ROP policy.

The difference between $2,271 and $720 is $1,551 a year, or $129.25 a month.

At the end of his 30-year policy, our ROP buyer, who by then is 60 years old and contemplating retirement, gets $68,130 back. At that time, an average 4 percent inflation rate  has reduced the buying power of this amount to $21,005.75, in 2010 dollars.

What happens if our consumer buys the old-fashioned, plain-vanilla term policy and stashes the extra $129 a month in savings?

Let’s say he starts with nothing but invests the $129, faithfully, month after month, in a mutual fund returning a fairly typical 6 percent. In 30 years his fund is worth $129,582.44. The corrosive effect of inflation erodes the purchasing power of this amount, over 30 years, to $39,952.69. But even this pallid value is almost twice as much as he would have had were his premiums simply refunded to him.

Meanwhile, however, the insurance company is not hiding our consumer’s premiums under a mattress. It also is investing the money, but instead of a mere $129, the company has his entire ROP premium to invest: $189.25 a month. In 30 years at 6 percent, the policy earns $190,104.47 for the insurance company. After the company returns $68,130 to the customer, it sees a profit of $121,975.

That’s assuming the company stays in business for 30 years. We’ve seen what “too big to fail” means…who would have thought, just five years ago, that major banks would go down in the dust? An insurance company is just another financial institution, no more nor less vulnerable to the vagaries of future recessions than any other corporation. If the company folds before the 30-year policy expires, our consumer could very well lose all of his “investment,” since a bankrupt company is unlikely to honor a contract to return money it doesn’t have.

Pretty clearly ROP life insurance is a great idea…for the insurance companies!

😀

Cassie, Coyotes, Students, and Bumhood

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Want to see a little dog’s ears stand straight on end? Here’s what you do. Get yourself a coyote, install him in the back yard, and set him to singing.

In the darkest wee hours of the morning, one of the neighborhood’s coyotes caught a stray cat, just outside the back door. We could hear the cat screech, and then in the same cosmic breath we could hear the coyote call, a joyous, bizarre, and convoluted call, to her mate to come share the midnight snack.

Did Cassie the Corgi know this was the cry of something that would like to eat her as much as it relished the neighbor’s cat? I have no idea. All I can say is that in the dark her little head popped up and her ears stood erect like radar antennae searching out a signal.

Coyote, hallucinatory mariachi in the desert, Coyote the Trickster. There’s something weird, eerie about Coyote’s song that reminds you of a devil’s claw: a melody that curves back upon itself, barbed Satanic hilarity: yip-yip-wooWOO-ah! wooHOOwahaha! Coyote does not bay, he does not bark. He laughs. And oh, my friend, he laughs at us.

Straining through the black night for echoes of Coyote, I thought of the time I was a little girl in Saudi Arabia, alone in my room in the middle of the night when a jackal came calling. It must have been right outside the bedroom window. In the dark, in the quiet, the howl of a jackal is very loud, very loud indeed. In my childish fright, I imagined the beast was under my bed.

As much as he looks like Coyote, even is called by people in India a Trickster, the jackal does not sing like Coyote or behave like Coyote. Jackal bays, and he bays long, mournful, and clear. It’s not a belly-deep sound like a hound’s. It’s a high-pitched, endless howl taken to soprano register and held longer than you would think possible for any breathing creature: roo-roo-ROOOOOOOOOOOOOOOoooo-ra-ra-rah. It’s a sound that seems to fill all of existence and seep into the nooks and crannies of the cosmos, mesmerizing in the depths of its terror.

And yes, like Coyote he would like to eat your poodle, your chihuahua, your cat,  your corgi. But Jackal is not so easily satisfied. This is a dog that will chase down a rider on a horse. Two of our friends were riding their horses outside of camp late one afternoon when a pack of jackals materialized out of the white sand dunes. After stalking them briefly, the jackals gave full chase. Our friends spurred their mares and took off on a dead run. They barely made it through the main gate, where the Arab guards drove off the jackals with gunfire.

Speaking of barely making it through the main gate, one of my students occupied half the period trying to persuade me that instead of addressing the assignment he should write about the latest drama in his life.

I try to distance myself from students’ personal stories. Freshman comp positions one in the English Teacher as Mom role. And I do not want to be their mother. They break my heart too often.

This one was with a bunch of young people who crashed a party. When the resident partiers tried to drive them off, a free-for-all broke out, in which our young pup’s best buddy brained one of the opposition with a vodka bottle. Our pup’s vodka bottle.

The result: Best Buddy is in jail, charged with attempted homicide and assault with a deadly weapon. Pup is on his way to court, thereat to be deposed and then put on the witness stand.

I. do. not. want. to. know.

Where, I asked him, where were your parents???? Where were the parents of the young people whose family’s home was trashed when your buddy ran his truck through the block back fence and then through a wall of the house? Where, where, WHERE were the adults?

He gave me a blank look.

Where were they? Presumably off somewhere else behaving like children themselves. Damn their eyes.

But the nice thing about freelance teaching is that it doesn’t entail too much work. This afternoon is drop-down dead gorgeous, one of the most beautiful days I have ever seen in this land of beautiful days. Reasonably confident that Coyote had gone on his way well-fed and content, the Cassowary and I spent a fair amount of it loafing in the leafy bower outside the dining room.

The tea roses, like these much-revived climbers, are bursting forth in plant joy after all the rain we’ve had. They’re already beginning to make extravagant blossoms, along with the bougainvillea and the various potted plants that decorate the yard.

We are, unmistakably, . . .

Not a coyote

Images:

Coyote by Arizona Roadside, Marya
Devil’s Claw. JerryFriedman. Creative Commons Attribution-Share Alike 3.0 Unported

Costco rocks!

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At the risk of making this blog sound like the official house organ of the Costco Fan Club, I have to say that the joint certainly came through today. I could not believe it! They took back almost $200 worth of junk, some of it stuff I would normally not dare to ask a retailer to accept.

Okay, it wasn’t surprising that they refunded all my money for the Flip video camera that didn’t work. Their return policy on electronics has always been pretty amazing. Even though they shortened the period in which they would accept returns on such gadgetry, they still will take back just about anything. So, voilà, $130 back on the card.

Now, here’s where it gets amazing…

After the CSR kindly returned my money for the camera, I presented a bag full of raw, sliced-up leg of lamb.

Yes.

My excuse: after I cut it up and put the stuff I intended to eat later in the freezer, I fried one piece of it and realized it had turned. (Rancid is the word we’re groping for.) Yea, verily, you could smell the off odor even though the stuff was frozen solid.

More money back on the card. That was only slightly surprising.

It gets better…

Then I trotted out the RoC facial blowtorch and explained what had happened when I applied it, following the instructions.

She said, “Oh, yeah…I can see that redness on your face.”

“It’s better today than it was yesterday,” I remarked.

Incredibly, she returned my money in full even though I presented her with three unwrapped tubes of face cream, two of which had been opened and partly used!

I couldn’t believe it. Really, I thought they might refund my money for the rotten lamb, but I expected to be told to take a flying f*** at the moon when I asked for money back for the used cosmetics.

Is that or is that not astonishing?

A$k and ye shall re¢eive!

Hoot! Check this out!

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A really interesting article has just popped up over at Brip Blap. Steve writes about what happens when a real estate seller idly googled the name of a buyer and came upon the person’s Facebook page. It’s an amazing story.

I won’t spoil the fun by rehearsing it here: you’ve gotta read it!

FDA stirs in its sleep

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Well, here’s some news: The FDA has finally gotten around to telling a few mass food-distribution companies to quit with the fraudulent claims on the labels.

Mirabilis!

It’s surprising, really, that consumers buy into this hucksterism. They must, though; otherwise the megacorporations wouldn’t bother with foisting lies on the public. They’ve been doing it for a long time. And it must be said that even skeptics get drawn in.

When my son was a baby, I went out of my way to buy Beech-Nut juices in infant bottles for him, because Beechnut advertised loud and clear that all its juices were 100 percent unadulterated juice and nothing but juice: no sugar, no water, no adulterants.

About the time the dentist was excoriating me for feeding him sugar and I was protesting that I never once gave him anything with sugar in it, out came a report that Beechnut’s apple juice contained almost no juice at all: it was mostly water and sugar. His  little teeth were ruined. He had to have something like 20 fillings.

Since then I’ve had no trust at all for any food manufactured by any large corporation. If they’ll lie about baby food, they’ll lie about anything. And as for juices, all you have to do is read the fine print on the label (if you can see it!) to find that a large proportion of bottled and frozen “juices” really consist mostly of white grape juice and corn syrup, with a whisper of some other fruit juice added to flavor it like the juice it claims to be.

The wild claims that things like pomegranate juice will do splendid things for your health raise my hackles, as do additives stuck in otherwise normal food to make us think the adulterated stuff has some medical benefit. Personally, I want my food to be food, not medicine. If I want extra vitamins, calcium, or antioxidants, I’ll swallow a pill, thank you!

Well, it’s past time the federal regulatory agencies woke up. No one else seems to be in a position to block the corporate pseudo-government that controls the nation’s food supply from lying about its products, adulterating them, or foisting substandard products on the public. Beech-Nut, we see, is among the several corporations specifically ordered to remove misleading labels.

Bring the bug spray, Uncle Sam! The cockroaches have taken over the larder!

Oops! Easy on the RoC de-wrinkle stuff!

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So, when I bought the Costco Lifetime Supply of RoC Retinol Correxion Deep Wrinkle Night Cream gunk, as part of the new lifestyle retread scheme, I thought I was buying the usual wussy over-the-counter pretend cosmetico-pharmaceutical, designed and pitched to make the customer feel good but in reality unlikely to do much of anything.

Wrong!

It definitely does something. What exactly the something is remains to be seen. However, at the moment it’s a shade on the alarming side.

The stuff stings a little when you put it on, but I took that as unremarkable, because the Alpha-Hydrox I used to smear on my face did the same. Today, however, an hour or two after I’d rubbed this stuff in, covered it with an SPF 45 sun block, and powdered over the whole mess with SPF 20 makeup, my cheeks and chin started to hurt and feel uncomfortably parched.

Naturally, I was on the campus, so there was nothing I could do to get it off. Not for several hours after this burning sensation began did I get home where I could remove the layers of makeup and goop.

Once I washed it all off, what I discovered is that my face looks like it’s been burned. Not critically—like a middling sunburn, I’d say. But still: the irritation is there, and the skin all over my cheeks and nose has turned bright red.

I have been staying out of the sun, and each morning I’ve applied a liberal dose of Neutrogena’s best SPF 45 sun cream, plus some fairly opaque makeup also advertised to have some SPF qualities. So I doubt that it’s sunburn. I think it’s a reaction to the wrinkle gunk.

The package copy says, “You may experience mild tingling and redness during use.” Hm. I’m not sure “mild” is the term I’d use here. It continues: “This is normal and should be temporary until your skin adjusts.”

We shall see.

In the meantime, we’ll be hurrying the “adjustment” along by cessation. I’m going to quit using this stuff, at least until the inflammation subsides.

I probably overdid the slathering by applying the gunk in the morning as well as at night. The package does say you can do this, as long as you’re careful to use sunblock and hats. But it seems to recommend using it at night only.

A number of users have complained about similar discomfort. Unlike this woman, I do not have sensitive skin (to the contrary), but the effect fits what she describes, except for the eye symptoms. Presumably the redness and burning sensation will go away, one hopes without lasting damage.

If you’re going to use RoC or something like it, I’d suggest a conservative approach. It might be wise to try it on a small patch for a few days (it took several days for this reaction to develop!). Also, I certainly wouldn’t advise applying it more than once a day—maybe less than that, once every two or three days.

While it’s less than pleasant to go around in old-lady rhino hide, some things may be worse…