Why Credit Card Companies are so Mean

[Caliga]

Assuming the worst case scenario, how do you regulate against that kind of stupidity?

IMO you don't.  If you do that, they never learn and become ever-dependent upon the government, which is the opposite of what ought to be happening.

[Berkut]

Assuming the worst case scenario, how do you regulate against that kind of stupidity?  How do you stop people from buying products they dont really need or more importantly should the State regulate against that kind of stupidity.  If so where do you draw the line.   I see lots of people buying lots of things they dont need.  Our modern economy is built on such excesses.

Christ CC, you certainly are stupid.

*You* don't make those decisions - you are just another ignorant masses peasant, incapable of deciding for yourself what is best for you! The fact that you cannot see how the line can be drawn, or what decisions ought to be made for you is simply evidence that in fact you are too stupid to be allowed to make decisions, including these kinds of meta-decisions.

Just sit there and drool a bit, and Nancy and Barney will be along to tell you what you need to know. Maybe. You know, Barney Frank is like the smartest man on the planet. Or at least in the US Congress, which is pretty much the same thing.

[DGuller]

My opinion is that the consumer "abuses" with insurance primarily come from the sales side, not claims adjusting. The potential for abuse is well known and heavily regulated.

You're almost certainly correct.  Most sales organizations are staffed with people who are incredibly greedy and unscrupulous.  That's the only type of person drawn to sales, really.

It's even worse when the sales people are disguised as "financial advisors" or some other crap like that, and sell you on stuff that makes them commissions while pretending to be an expert taking care of your interests.  In my mind that's nothing more than legalized fraud.

[alfred russel]

My opinion is that the consumer "abuses" with insurance primarily come from the sales side, not claims adjusting. The potential for abuse is well known and heavily regulated.

There are a number of life insurance policies that are written on children or for young adults with no dependents that a sales person talked someone into that are clearly not in that person's interest. Plus life insurance often contains a very large commission--often 50% of the policy. What is happening is sales people are capitalizing on an ignorant public and a vague notion that "life insurance is good" to push as much product as they can.

Assuming the worst case scenario, how do you regulate against that kind of stupidity?  How do you stop people from buying products they dont really need or more importantly should the State regulate against that kind of stupidity.  If so where do you draw the line.   I see lots of people buying lots of things they dont need.  Our modern economy is built on such excesses.

You could require a one page letter, plainly written by a regulatory agency, to be signed along with life insurance policies by the customer explaining the basics of life insurance.

[Caliga]

It's even worse when the sales people are disguised as "financial advisors" or some other crap like that, and sell you on stuff that makes them commissions while pretending to be an expert taking care of your interests.  In my mind that's nothing more than legalized fraud.

Yeah, I had a guy from Northwestern Mutual Life try to pull that shit on me last year.  Since he was buying me lunch, I was happy to let him make his little spiel.  I then ignored all further emails and phone calls from him.

LOL THANKS FOR THE FREE FAZOLI'S BUDDY

[crazy canuck]

You could require a one page letter, plainly written by a regulatory agency, to be signed along with life insurance policies by the customer explaining the basics of life insurance.

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

"WARNING.  LIFE INSURANCE IS JUST THAT.  INSURANCE ON YOUR LIFE.  YOU WILL NOT PERSONALLY RECIEVE ANY MONEY FROM THIS POLICY.  THE INSURANCE COMPANY WILL ONLY PAY OUT MONEY OVER YOUR DEAD BODY"

edit: also I have never seen anything written by a regulalory agency that is even remotely plain and simple to understand.  The reason why there are regulatory agencies is because the thing they are regulating is usually complex - like insurance products.  You and I have been talking about the worst case scenario.  But given other facts it might make sense for a young person without dependants to buy life insurance if that life insurance product has a good investment component.  Most dont but that doesnt mean that it isnt possible.  Would you really have regulatory agency advising the public on such matters?  I can see a lot more harm there then good.

[DGuller]

You could require a one page letter, plainly written by a regulatory agency, to be signed along with life insurance policies by the customer explaining the basics of life insurance.

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

"WARNING.  LIFE INSURANCE IS JUST THAT.  INSURANCE ON YOUR LIFE.  YOU WILL NOT PERSONALLY RECIEVE ANY MONEY FROM THIS POLICY.  THE INSURANCE COMPANY WILL ONLY PAY OUT MONEY OVER YOUR DEAD BODY"

You could say that life insurance is mainly for protecting the family against the sudden death of the breadwinner, AND IS NOT MEANT TO BE AN INVESTMENT VEHICLE.  It might be a bit too editorial, though.

[Syt]

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

Yes, because over here at least many people have their "life insurance" paid out when they retire (many insurances offer a combined life insurance/pension fund).

[crazy canuck]

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

Yes, because over here at least many people have their "life insurance" paid out when they retire (many insurances offer a combined life insurance/pension fund).

More evidence the Germans are weird.

[crazy canuck]

You could require a one page letter, plainly written by a regulatory agency, to be signed along with life insurance policies by the customer explaining the basics of life insurance.

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

"WARNING.  LIFE INSURANCE IS JUST THAT.  INSURANCE ON YOUR LIFE.  YOU WILL NOT PERSONALLY RECIEVE ANY MONEY FROM THIS POLICY.  THE INSURANCE COMPANY WILL ONLY PAY OUT MONEY OVER YOUR DEAD BODY"

You could say that life insurance is mainly for protecting the family against the sudden death of the breadwinner, AND IS NOT MEANT TO BE AN INVESTMENT VEHICLE.  It might be a bit too editorial, though.

see my edit above.  We were posting at the same time.

[Syt]

We were posting at the same time.

The internet is such a thing of wonder! 

[DGuller]

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

Yes, because over here at least many people have their "life insurance" paid out when they retire (many insurances offer a combined life insurance/pension fund).

More evidence the Germans are weird.

Nothing weird about it.  Pension is just an annuity, and annuity is just a form of life insurance.

[Berkut]

DGuller, have you had a chance to find a link to that actual data that shows that people are breaking under credit card debt that is a result of these predatory practices, rather than them simply borrowing more money than they can afford?

[alfred russel]

Surely people dont have to be told that a term life insurance policy pays money *after* death.  I ask this somewhat sarcastically but do you really think it is necessary for there to be something like:

"WARNING.  LIFE INSURANCE IS JUST THAT.  INSURANCE ON YOUR LIFE.  YOU WILL NOT PERSONALLY RECIEVE ANY MONEY FROM THIS POLICY.  THE INSURANCE COMPANY WILL ONLY PAY OUT MONEY OVER YOUR DEAD BODY"

edit: also I have never seen anything written by a regulalory agency that is even remotely plain and simple to understand.  The reason why there are regulatory agencies is because the thing they are regulating is usually complex - like insurance products.  You and I have been talking about the worst case scenario.  But given other facts it might make sense for a young person without dependants to buy life insurance if that life insurance product has a good investment component.  Most dont but that doesnt mean that it isnt possible.  Would you really have regulatory agency advising the public on such matters?  I can see a lot more harm there then good.

I would be in favor of a piece of paper that must be signed with every life insurance sale stating something along the lines of: "The primary purpose of life insurance is to replace income that was lost due to death. Life insurance can protect dependents and others relying your income in the event that you die.

However, life insurance policies should rarely be taken out on children, or adults without dependents. In these cases, life insurance can drain your financial resources without providing significant financial protection against loss for your family."

Would it really be so hard to do this? It isn't as though we would need a new regulatory agency--not only do we have many insurance agencies as it stands, this would just be a few sentences that need to be signed before a policy can become active.

And btw, the investment components of life insurance policies are notoriously awful. I see no reason a young person without financial obligations should ever purchase life insurance (at least in excess of funeral costs).

[Caliga]

The problem with these sorts of proposals, as sensible as they sound, is that marketing people would find some way of twisting the statements and sales people would be trained on how to talk past them.