Why Doesn't Your Whole Life Hypothetical Show Cost of Insurance?

One of the amazing things about whole life insurance is that they come with hypothetical illustrations that do not show the cost of insurance.  How is it that you sell an insurance policy and don't show the customer the cost of the insurance?

In a sense, if the whole life insurance agents really cared about giving their customers good information and all of the information, they would show the cost of insurance as an extra column in their hypothetical illustrations.  Typically, a hypothetical illustration will show you the premium and the cash value.  How many people do you think extrapolate the cost of insurance from the premium and the cash value?  Adding into the equation, the underlying assumed interest rate, how many people do you know that can even calculate the cost of insurance from the hypothetical illustration?

What do you think?  Do you think it is ethical to show an insurance policy without showing the cost of insurance?  Do you think it is fair that the actual cost is only given once the policy is issued?  Do you think it is fair that people must calculate the cost of insurance by combining the rate per unit in the policy with the number of units of insurance they own?  Do most people even know how to calculate that?

This post was reposted from http://finlit.biz/life-insurance/why-doesnt-your-whole-life-hypothetical-show-cost-of-insurance/, originally written on February 2nd, 2013.