Well, the insurance companies pay me, but yes. Not all my customers are poor. Some are pretty well off, some middle of the middle class. I don't really sell to dirt poor people unless they already have something worse and I can replace it with something cheaper to save them money.

What if the person ends up in a nursing home? Can the home force them to use up their cash value and will that terminate the policy?

Lots of people are in nursing homes without being on Medicaid. However, if they're on Medicaid, they have to file an annual report on life insurance cash value, which would be considered an asset. It takes two years for any cash value to accumulate from the start of a whole life policy. So, if they're already on Medicaid, the way around that is to have the beneficiary also be the owner. Then, once the cash value starts to accumulate, it belongs to someone else right away.

https://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

Put $100 away initially and $100/month for 30 years, you end up $42,000+

Sure $100/month is a hurdle, its a pack of butts a day. Or a Starbucks coffee/day, actually less for both.

Hugh, you remind me of my dad, who still can't fathom why anyone cares what a credit card APR is, since no one should ever carry a balance. We're not talking about investment strategery here.

Yep...make the same payments to yourself...and you don't need life insurance. I have none.

The same with collision insurance on my cars. Self insured. I only have liability as I am willing to bet my car that I will not cause an accident. After all these years...I have saved many times what a new car would cost.

When someone gives me the objection that they'd be better off just putting the money in a savings account, I always ask them if they're doing that. Never. "Oh, well, when were you gonna get that started? You can't live long enough to save up $25k at $X per month, and one emergency can wipe that out in an instant." It's not really an issue with this crowd. They live SS check to SS check.

Buy expensive shoes if you like them, but don't try to justify a Porsche by claiming a basic Honda only lasts one year.
I have Honda shoes that have lasted a decade with regular use. If your shoes only last one year, you need walking lessons.

That is why "this crowd" is "this crowd." Poor choices. If one has been on any sort of government assistance (including the earned income tax credit) for more than a few months and is reasonably healthy...then they probably fall into one of two groups. Incredibly lazy and gaming the system, or made such a massive series of incredibly poor choices that it is almost impossible to recover on their own...ever. We encourage both by rewarding their bad behavior (those poor choices and laziness). There is much more incentive (with income based social welfare) to accept failure than to dig put of it. Recovering from life's mistakes is hard...whether it is losing weight or learning the crap you should have learned in school (and teachers/schools allowed you to fail to do so). If you have a child you cannot afford, no one tells you to stop...they reward you with tax credits, WIC, SNAP, housing, etc., encouraging more of the same behavior which turns a relatively temporary problem into a lifelong one (where other that worked harder and smarter (made wiser choices) must support you and your progeny for the rest of your lives.

Any program where making a few more dollars results in losing "free money" taken from someone else teaches those near the bottom to quickly reduce hours/effort as not to exceed levels that would cause loss of that benefit. The earned income tax credit is a good example as it grew a whole class of seasonal workers who previously would have worked the entire year (like those that lifeguard n the summer or are ski instructors in the winter)...as well as many that cut heir hours late in the year (when demand for retail Christmas workers are the highest).

Most folks start work before 20 and live past 60. That is 40 years. If stupid enough to only get just 1% return, $42.38 a month would get them $25K. At 5%, just $16.38 a month. They could get to the same point even easier by dropping their income tax return (as many poor get back more than they pay) or buying a home for the same payment as their rent or less) as it would be long paid off and would quickly gain them $25K in equity. That is how I started. I took a second job to buy a home that I could not afford otherwise. Not only was that a great investment, but doing so and making my payments on time resulted in a high credit rating which made any purchase with credit (like another house or a car) much cheaper.

poor comparison, Hondas are same level reliability then Porsches, after all Porsche uses Japanese QC and production methods now (Toyota system)

Actually - having been poor while younger - I can understand that.

If you allow access to your account when it’s fluctuating around zero you can guarantee that $ will be pulled at the worse possible time and you’ll go negative it’ll be declined and you’ll get hit with a bunch of fees.

Better to pay a bit more and be able to control paying it when you know the $ is available. It may seem like it costs more but in the end you sleep better knowing you aren’t paying a ton of unexpected fees.

I guess it depends on the shoe and the use (if one can make a cheap one last as long). When I worked in D.C., I typically walked (sometimes ran) between meetings. It was outside (sidewalks) and it was often 2-3 miles between meetings. I had several in a typical day. I wore nice shoes that were not at the extreme far end of expense, but certainly not the cheapest (and I was able to get them on very good sales). I rotated a couple pairs and had to get them resoled every year (for about $30) as I would get holes in the bottoms. I switched to shoes that cost a little more than half as much (tried a couple different brands over time and they lasted about six months (rotating two pair similarly)...and could not be resoled. They never looked as nice as the more expensive ones and they stretched a lot...which tended to make them comfortable, but after a year or so of wearing them, my feet had spread out enough that the nicer shoes were too tight. I have several pairs of fairly expensive, almost unworn shoes of various vintage in my closet where the materials have decomposed (usually the manmade materials in the soles) to the point where I had to throw them away. That has never been the case for more expensive ones...which I have had for much, much longer.

I have found the same was true for a nice suit. Not only does it look a lot nice from day one, but a really nice one will last forever if you take good care of it (it is wise to buy extra trousers). The cheap ones look like a cheap suit their entre life...and generally do not last.

I also think you could make the case that a better quality car is indeed a good investment. It seems to me that most folks keep that nicer car a lot longer and amortize the cost over many more years. I am sure there are super high mileage KIAs and Chevy Citations out there...but I suspect fewer than their sales/popularity (in comparison to higher end cars) might make one expect.

yep
I've done budget management for people in debt.
one way they will often work to manage payments is the envelope way
paycheck comes in
on that day put all the money in enveloppes
rent in 1 envelope
water bill in another
electricity
dept payments
etc etc

A lot of poor people do this, because to some extent it works for them to visualize their finances, and decide priorities.

With money in an account, they'll often loose track of things that suddenly get jacked off the account.

It's all nice if you are computer savy and got an XLS sheet with planned payments, and that way keep track of the forecast. but for a lot of poorer people they either don't have the computer to begin with, or don't have the ability to use it for this purpose.

All true below in Svan's post.

I have mentioned my financial counseling for Navy folks but I have also worked with others.

We lived on a really neat little island called Cobb Island before we bought the farm. I was workng in DC and my wife at Pax so it was a good middle commute for us both.

The house next to us was owned by a wealthy couple from DC that rented it to Section 8 folks. We met and got to know three families in the two years we owned the house on the Island.

I enjoyed working on cars in those days and helped with a bunch of Caprices, Monte Carlos, etc. Sounds cliche but trust me.

My favorite was a guy named Moose who I helped get a job driving a tow truck. I knew a guy, who knew a guy...

This was in 1995 and my wife and I together are doing well since we both had a good salary.

Moose is on the tow truck gig doing well and gets ahead financially. He decides about four months in that he needs a vacation and takes the whole Moose family to Disney World, for a week.

He comes back broke, lost the job and started all over again being poor. He did manage to get a job in his hometown in Michigan since he evidentially was a good tow truck driver.

I had my Mom's old 1976/77 320i with 250K on it I was looking to get rid of so I gave it to him. Last I heard, 20 years ago, they were doing ok.

Amazing stuff. F'ing Disney World.

And because of that, the rule in this biz is generally to set the draft date for SS billing. Most insurance companies can set it up to draft one's account on the 2nd, 3rd or 4th Wed. or whenever they get their SS money. If that day falls on a weekend or holiday, it drafts the following business day. It can be a problem when it's a long weekend, because SS usually comes on time or early, never late. So those folks can sometimes still empty out their accounts before the insurance gets their draft. Just yesterday I got another call from a panicked customer that his account had been hacked and he was worried about his insurance premium bouncing. I just don't understand how so many people's bank accounts get hacked. If I were a criminal, I'd want to hack HughR's account;).

There are uses for life insurance. The partners buying my company have life insurance and I am the beneficiary. It’s in the purchase contract. If one of them croaks their remaining payments to me are covered.
I don’t have it myself, but I can self insure. This is one of the reasons life is more expensive when you’re poor. You need to spend money on insurance just to stay out of a pauper’s grave.

+100
I have had folks at work whine that they couldn't pay their bills but just paid for a fancy vacation or some very expensive clothes.

I don't even understand why anybody poor would spend money in life, for the grave.
It's not like you'll be dead more comfortably in a fancy grave then in a paupers grave.

hell, put me in a cardboard box and straight into an incinerator , I really don't care.
I have better uses for my money : To Live.

Key Person Insurance is a whole different ballgame from final expense. I mean just worlds apart. I don't care about anything related to my funeral. I hope the largest line item is the bar tab at the wake. Just couldn't care less. But I don't want Mrs. Lee to have to have a yard sale of my guns and guitars to cover the mortgage if I pass young and before it's paid off. So I have something in place and, if I make it to old age, will convert it to an RPU (reduced, paid up) policy. I'm never going to try to talk someone into wanting a fancy funeral so they need insurance to pay for it. Again, by the time I get there, I'm usually fixing messes they already created. Not gonna walk away from that when I can save them money and make some for myself. I do occasionally have to walk away and tell someone to keep what they have.

Young families usually need some inexpensive term life insurance...but usually the sooner that you have enough net worth/savings to cancel, the better. Most people should be able to grow significant net worth once their kids are gone and they are in their peak earning years...and rapidly should be able to reduce their need for it (just as the costs go up due to age/health). Especially if you live within your means and pay off your home and have no real debt.

Most people get too much life insurance to enable their family to live much better than before if they die. I think that is silly. I never want to be worth more dead than alive. One should look at replacing their net income (minus their own expenses)...and use the additional money they would have spent for a huge policy...to save/invest so they will need less insurance in the future.