If you are in the market for insurance for your business, home, vehicle, or your family, a broker can help you determine what your insurance needs are and what insurance is right for you. Because a broker works for you — not for an insurance company — you can be assured that your insurance broker has your best interests in mind when shopping for insurance policies. Contact an insurance broker today to learn more about how he or she can help you buy the best possible insurance for your needs.
You seem to be suggesting that NO one at all ever needs life insurance past the age of like 55…..seems odd that you wouldn’t want a death benefit when you’re actually statistically more likely to die…..I am a bit confused by that…And if whole life isn’t a good investment then term life certainly isn’t unless you die during the term of course….Term insurance is like renting a home you pay and pay and pay and pay and you potentially never get a return. Except I could argue renting a home and being able to live there is more advantageous than renting insurance and what hoping you will die so your kids will get the money?
In his memoir “Am I Being Too Subtle?” Sam Zell, a billionaire investor and chairman of Equity International, writes, “I’m always on the lookout for anomalies or disruptions in an industry, in a market or in a particular company…. Any event or pattern out of the ordinary is like a beacon telling me some new interesting opportunity may be emerging.”
Example (Comprehensive): You park your car outside during a major hailstorm, and it's totaled. If you have comprehensive, we'll pay out for the full value of your car (minus your deductible amount). Example (Collision): You back out of your garage, hit your basketball hoop, and cause $2,000 worth of damage to your vehicle. If you have collision, we'll then pay for your repairs (minus your deductible amount).

Moreover, with hindsight, because I suspect that the conversion options in the term policies, as I look into them, won’t prove all that attractive, I am thinking that it would have been optimum to have had universal or whole life coverage for closer to 20% of our aggregate, total original insurance coverage, rather than 10%. Still, while I am pretty satisfied that my prior decision-making was close to right, I do wonder if you see this all very differently.


I am Also current working toward my CFP as well and I do see some good points. However, what weaken your argument is that you need to include instances where WL is a valuable tool. Your article is bias (as Dave Ramsey is also quite bias) because it is just as easy for me to argue term life insurance is always bad. If that is the case, then no one will buy life insurance and every family will be in financial trouble. You claimed that you are a CFP, and you should know better that you have the obligation to ensure the public is given both pros and cons about all products.

Now that you have a better picture of the difference between term and whole life policies, you probably want to compare term life versus whole life insurance costs. To do so, you will need to directly compare the short and long term costs of a whole life policy and a term policy, based on factors like your age, the face value of the policy you want to buy, and whether or not you are a smoker.

*Payoff Protector is not an insurance product. Subject to the terms, conditions, and restrictions of the Payoff Protector provision in your State Farm Bank Promissory Note and Security Agreement. If your vehicle is determined to be a total loss before the loan is paid off, State Farm Bank will cancel the difference between the insurance payout and the unpaid principal balance due on the loan. Certain restrictions apply. For example, your loan must be in good standing.
This is a very helpful example of why WL insurance IS a good investment: http://www.mypersonalfinancejourney.com/2013/04/infinite-banking-concept-whole-life-insurance.html. Also, Paradigm Life has several very good models to show how WL policies can out pace “buy term and invest the difference” products long term. One size does not fit all. I have Term Life insurance supplementing my WL policies right now, but they are all convertible. So I will be able to lump in money later and convert them into permanent policies with all of the borrowing and tax sheltered benefits.
Collision and comprehensive only cover the market value of your car, not what you paid for it—and new cars depreciate quickly. If your car is totaled or stolen, there may be a “gap” between what you owe on the vehicle and your insurance coverage. To cover this, you may want to look into purchasing gap insurance to pay the difference. Note that for leased vehicles, gap coverage is usually rolled into your lease payments. 

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As for your point about term life insurance, it’s important to keep in mind that the point of insurance is not to pay out no matter what, but to provide protection for the period of time that you need it. The fact that term life insurance doesn’t pay out most of the time is actually a good thing because it means that most people aren’t dying young. And in the meantime, you can use the savings from the cheap premiums to build your financial independence through other, more effective savings avenues.

I bought a whole life policy in 1998 at the age of 50. It is has a face value of 150k with double iindemnity, living needs and disability waivers. This policy has been a lifesaver for me over the years, especially when I became disabled, I am so happy that the salesperson gave me what I said I wanted “a plan that would help me live as well as leave something for my children.” He gave me whole life
Coverage that suits you. Comprehensive and collision coverage is just the beginning. Our policies also give you the flexibility to dial up (or down) your peace of mind. Choose from new car replacement2, special parts replacement3, enhanced rental car damage coverage4, and more. And because there’s only one you, receive identity theft protection5 at no extra cost.
Base commission is the “normal” commission earned on insurance policies. Base commission is expressed in terms of a percentage of premium and varies by type of coverage. For instance, an agent might earn say, a 10 percent commission on workers compensation policies and 15 percent on general liability policies. Suppose that you purchase a liability policy from the Elite Insurance Company through the Jones Agency, an independent agent. Jones earns a 15 percent commission on general liability policies.

Insurance brokers represent the insurance buyer – you the consumer or business owner.  They are appointed or contracted with multiple insurance companies.  They have the flexibility to discuss many options and companies that meet your needs and budget. Insurance brokers have been around as long as insurance agents.  In many cases people will refer to insurance brokers as independent insurance agents.
Products underwritten by Nationwide Mutual Insurance Company and Affiliated Companies. Not all Nationwide affiliated companies are mutual companies, and not all Nationwide members are insured by a mutual company. Subject to underwriting guidelines, review and approval. Products and discounts not available to all persons in all states. Nationwide Investment Services Corporation, member FINRA. Home Office: One Nationwide Plaza, Columbus, OH. Nationwide, the Nationwide N and Eagle and other marks displayed on this page are service marks of Nationwide Mutual Insurance Company, unless otherwise disclosed. ©2019. Nationwide Mutual Insurance Company.

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In the United States, insurance brokers are regulated by the individual U.S. states. Most states require anyone who sells, solicits, or negotiates insurance in that state to obtain an insurance broker license, with certain limited exceptions. This includes a business entity, the business entity's officers or directors (the "sublicensees" through whom the business entity operates), and individual employees. In order to obtain a broker's license, a person typically must take pre-licensing courses and pass an examination. An insurance broker also must submit an application (with an application fee) to the state insurance regulator in the state in which the applicant wishes to do business, who will determine whether the insurance broker has met all the state requirements and will typically do a background check to determine whether the applicant is considered trustworthy and competent. A criminal conviction, for example, may result in a state determining that the applicant is untrustworthy or incompetent. Some states also require applicants to submit fingerprints. 

Underfunded whole life insurance may have only performed 4%. However, designed with additional premiums they have actually earned closer to 7% in the 30 years from 1984-2013. Even during the period between 1977 and 1982 where interest rates shot through the roof and bond holders didn’t recapture their losses for several years, over funder whole life returned 35% after the cost of insurance is considered.
Many insurance executives are opposed to patenting insurance products because it creates a new risk for them. The Hartford insurance company, for example, recently had to pay $80 million to an independent inventor, Bancorp Services, in order to settle a patent infringement and theft of trade secret lawsuit for a type of corporate owned life insurance product invented and patented by Bancorp.
I really wish you would have stated more clearly the difference between the typical whole life plans with zero overfunding and a participating overfunded whole life policy. But I agree with you: What’s the point of not overfunding? Those policies have such a low cash component that they typically are just a ploy to make money by the agent and it seems as if that was your point all along. Which you should have clarified. Why minimum whole life insurances plans are a scam, especially when sold as a main investment vehicle. But then a little drama drives traffic right?
So our financial adviser is telling us we should have whole life insurance because we can use the cash amount, tax free. We have been contributing to Roth IRAs, but will now not be able to due to our AGI. We could contribute to IRAs, but we’ll be in a higher tax bracket. We’ve been maxing out our 401k accounts, and have investments in the stock market. What other options might we have for retirement?
Some insurance agents, such as independent agents, will compare policies from multiple vendors. However, this does not mean that the agent has access to all of the vendor’s policies. As insurance agents represent insurers, they may or may not have the experience and expertise required to advise you regarding the best policy for your particular situation. While independent insurance agents may be able to offer you more choices as they work with companies that are competing for your business, they generally only sell the insurance options that will provide them with the biggest profits. Keep this in mind when choosing between an insurance broker and insurance agent.
I am looking into different investment options to start a retirement plan. What i have learned thus far, is that the majority of people seem to be looking at the total amount of the investment at the time of retirement. One of my primary concerns is the amount of taxation incurred once the funds start to be distributed. Deferred taxed 401K does not seem to be a viable option when you consider the taxation in say 30 years (even with the employer match) VS post-tax investments at the current tax rate. A Roth IRA seems to be a better option. I recently spoke to an advisor who recommended Whole Life as an investment option due to the non-taxable nature of the investment – i am currently researching how this may work. To your knowledge, has anyone performed a apples to apples comparison of the differing investment strategies to include estimated taxation at the time of disbursement?
3. Why don’t you mention the 4-5% ROR on CV to premium? You state it’s a bad investment – it’s not it’s life insurance. But what bond does 4-5% now? And did you know the pubic’s ACTUAL ROR in the market is less than 4%? Look it up – google will work – try “Why Investors May be Fooling Themselves” – from the Wall Street Journal – I think they know what they speak!!!

And your conclusion at the end is spot on: the insurance industry ABSOLUTELY knows about the negative stigma associated with these kinds of products and is ALWAYS looking for new ways to package things to make them sound attractive. Whether it’s variable life, universal life, equity-indexed universal life, or whatever this new thing is that they were trying to sell to you (I’ve honestly never heard of FFIUL), there’s always a new angle and the sales pitch is always going to sound good.

Yes, backdoor Roths are capped at $5,500 per year. Still, I think they’re a better first option than whole life for all of the reasons mentioned in the post. Exposure to market risk is not an inherent problem, and is also not a characteristic of Roth IRAs. A Roth IRA is just a type of account within which the individual can invest however they want. If they want to be exposed to market risk (something that many people deem desirable), they can be. If not, they don’t have to be. It’s up to them.

As to me, I am a commercial, non-insurance attorney who tries to be an “informed” consumer of financial products. 27 years ago, when I already was carrying no credit card balances and was funding my IRAs and 401ks in appropriate amounts, I, along with other of the partners in our then small law firm, purchased a Universal Life policy on my wife with Manufacturer’s Life (a mutual company) purchased now by John Hancock. Over the next 7 years, I purchased laddered term life insurance policies for my wife and I with terms designed to expire between our ages 55 and 72 (so our coverage would drop as our savings increased). The universal life coverage was for about 8-10% of our total aggregate insurance coverage.


Thanks for reaching out Wanda. The answer really depends on the specifics of your policy, your personal goals, and your overall financial situation. To be completely honest, if you’re already 13 years in and continuing to pay the premiums isn’t too much of a burden, keeping the policy may actually be the best choice going forward. But the only way to know for sure is by doing a detailed review. That is something I could do for you, and if you’re interested you can email me at matt@momanddadmoney.com to get the conversation started.

The author of this article has obviously not been exposed to the details, and perhaps unaware of the Canadian versions of whole life. His comments are just wrong on so many levels, it would take a book to refute them. To make such a blanket statement that all whole life policies are bad, is equivalent of saying because one BMW 750 was a lemon, don’t but one because they are probably all lemons. It is the application of these policies that is critical to understand, and yes they can be sold by inexperienced or crooked advisors looking after their own interests, but whole life has many positive applications both for individuals and especially for corporations.
Defense Base Act (DBA) insurance provides coverage for civilian workers hired by the government to perform contracts outside the United States and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, foreign nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
Products underwritten by Nationwide Mutual Insurance Company and Affiliated Companies. Not all Nationwide affiliated companies are mutual companies, and not all Nationwide members are insured by a mutual company. Subject to underwriting guidelines, review and approval. Products and discounts not available to all persons in all states. Nationwide Investment Services Corporation, member FINRA. Home Office: One Nationwide Plaza, Columbus, OH. Nationwide, the Nationwide N and Eagle and other marks displayed on this page are service marks of Nationwide Mutual Insurance Company, unless otherwise disclosed. ©2019. Nationwide Mutual Insurance Company.

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