The New Trend in Insurance is Old School Whole Life Insurance

A fellow Advisor sent me over a great article that gives solid and straightforward insight into why old school whole life insurance is back in vogue. But first, I’d like to take you back to the old school itself – when whole life was invented. I promise this history lesson won’t be a boring one.

Henry B. Hyde founded Equitable Life Assurance Society just as the United States was recovering from the Civil War. Not the best timing, one would think.

His company headquarters: one floor above the insurance company from which he was fired. Again, maybe not the best idea.

But Hyde played both to his advantage. He was very attuned to his policyholders’ concerns of never getting their premiums back. He began selling whole life insurance based on this demand, and this new product revolutionized the industry.

Why did it become so popular? The fact that the Civil War had just ended had a lot to do with it.

The United States was in a fragile economic state.  People not only wanted to get their insurance premiums back, they also wanted safety and stability. Stock markets and banks at the time could not guarantee that.

Whole life’s popularity continued through World War I, the Great Depression, and World War II. In the 1960s, new forms of insurance hit the market and whole life fell out of fashion because it just isn’t as flashy (i.e. speculative).

Which leads me to the aforementioned article, Here’s a link.

I especially liked these little nuggets…

“But the backbone, and therefore the underpinning upon which whole life has been built, remains the same – steady predictable returns with base guarantees.”

“Whole life insurance is the Swiss Army knife of the advisor’s tool kit. Insurance is a contingency asset. It protects you ‘in case:’ of death or disability or in the event one needs access to safe, conservative savings.”

“Volatile market performance, along with the high fees associated with 529 plans, have encouraged many to favor using a well-funded whole life policy as a way to fund education.”

Now think back again to what was going on Henry Hyde invented whole life insurance. The country just finished a war… with itself!

Now, I know times are tough now. Partisan gridlock in Washington is downright depression and disgusting. Our economy has been moving forward, but it’s been sputtering in first gear for the past four years.

But nothing can compare to the Civil War – both on its toll on the economy and how severely it affects everyone’s… everything.

And what did people flock to for security after they fought for their country’s existence and its future? Whole life insurance. And it remained popular through two major wars and the biggest economic calamity our nation has experienced.

To me, that says everything that needs to be said about the durability and reliability of whole life insurance.

And that’s why people whole life is coming back into fashion.

Be valuable.

John McCarthy
Managing Editor,

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