As for your question, I don’t believe I’ve ever reviewed a USAA whole life policy so I can’t comment on then specifically. I would simply encourage you to start by clarifying your personal goals and to then evaluate each option based on how well it will help you meet them. With that said, of your main goal is investing for retirement then I would typically encourage you to max out traditional retirement accounts before considering any kind of life insurance.
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.
2) With whole life, if you keep paying your premiums, your heirs will ALMOST DEFINITELY GET PAID. For instance, if you have a $1mn policy at $10k/year of premium, you know with near certainty that your spouse and kids will one day get $1mn. Even if you are paying in $10k per year which is a lot of money, then if you start at age 30, you will pay in $500k cumulatively by age 80. If you die at 80, your heirs get $1mn. Also keep in mind that this benefit is generally NON-TAXABLE!

Insurance Company


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.
Back to guaranteed growth…. Whole Life policies are interest rate driven based on the economy, but your “Cash Account” will increase every year, regardless of the market. Compound, tax-free growth. The dividends paid to the policy owners are also not taxable. Dividends are not guaranteed, but take a look at the dividend history for companies like Mass Mutual, Penn Mutual and Guardian. They might as well be guaranteed.
Safe Auto Group Agency, Inc and/or its affiliates (“Safe Auto”) is located and operated exclusively in the United States of America. Safe Auto does not offer goods and/or services in any language of an European county, does not deal in any European currencies, and does not underwrite risks for or issue policies to individuals or companies located in the European Union.
The mortality of underwritten persons rises much more quickly than the general population. At the end of 10 years, the mortality of that 25-year-old, non-smoking male is 0.66/1000/year. Consequently, in a group of one thousand 25-year-old males with a $100,000 policy, all of average health, a life insurance company would have to collect approximately $50 a year from each participant to cover the relatively few expected claims. (0.35 to 0.66 expected deaths in each year × $100,000 payout per death = $35 per policy.) Other costs, such as administrative and sales expenses, also need to be considered when setting the premiums. A 10-year policy for a 25-year-old non-smoking male with preferred medical history may get offers as low as $90 per year for a $100,000 policy in the competitive US life insurance market.

Special exclusions may apply, such as suicide clauses, whereby the policy becomes null and void if the insured commits suicide within a specified time (usually two years after the purchase date; some states provide a statutory one-year suicide clause). Any misrepresentations by the insured on the application may also be grounds for nullification. Most US states specify a maximum contestability period, often no more than two years. Only if the insured dies within this period will the insurer have a legal right to contest the claim on the basis of misrepresentation and request additional information before deciding whether to pay or deny the claim.
At the most basic level, initial ratemaking involves looking at the frequency and severity of insured perils and the expected average payout resulting from these perils. Thereafter an insurance company will collect historical loss data, bring the loss data to present value, and compare these prior losses to the premium collected in order to assess rate adequacy.[22] Loss ratios and expense loads are also used. Rating for different risk characteristics involves at the most basic level comparing the losses with "loss relativities"—a policy with twice as many losses would therefore be charged twice as much. More complex multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical methods may be used in assessing the probability of future losses.
Yes.  MetLife’s one year term products (including products underwritten by Metropolitan Tower Life Insurance Company and Metropolitan Life Insurance Company ) offer affordable protection when you require insurance for the short term. These products are designed to provide the right amount of protection when it’s needed most, or to supplement a policy you already have. Premium rates can be found here. For more information contact MetLife's Specialized Benefit Resources at 877-638-3932, and press 2 for New Business. 

Safe Auto Group Agency, Inc and/or its affiliates (“Safe Auto”) is located and operated exclusively in the United States of America. Safe Auto does not offer goods and/or services in any language of an European county, does not deal in any European currencies, and does not underwrite risks for or issue policies to individuals or companies located in the European Union.
That being said there are merits to the latter, which should really be sold as “cash building” tools for people that want to diversify their tax exposure, that’s it. But like you said most agents have no clue about real financial planning. Which would obviously include some degree of IRA’s, 401K’s, ROTH’s, Taxable accounts, hard assets, etc. Like you stated earlier. But have you considered an overfunded cash value policy as a way to diversify within your cash bucket assuming you believe in asset allocation, max 10-20% of total investment? More as an alternative cash bucket? But then that comes to income and the type of individual. I probably recommend them more than most, working with business owners and corporate managers. But for them they need more future tax diversification if taxes are headed north in the future. And the company I use which sadly I’m not going to talk about since I don’t even want anyone to know I wrote this “compliance would massacre me”. But those can be used by a business owner to leverage their cash and actually write off interest paid while said cash is still earning 100% dividend treatment, but of course only a few of those types of companies out there.

Fidelity insurance products are issued by Fidelity Investments Life Insurance Company (FILI), 100 Salem Street, Smithfield, RI 02917, and, in New York, by Empire Fidelity Investments Life Insurance Company®, New York, N.Y. FILI is licensed in all states except New York. Other insurance products available at Fidelity are issued by third party insurance companies, which are not affiliated with any Fidelity Investments company. Fidelity Insurance Agency, Inc. is the distributor. A contract's financial guarantees are subject to the claims-paying ability of the issuing insurance company.


When the market experiences “down years” you will want to used a fixed investment to take your distributions in order to give your market-exposed vehicles time to recoup losses. This is one of the best pieces I have seen regarding “Taming a Bear Market” where one uses whole life insurance to supplement 401(k) distributions in bad years: http://www.becausewearewomen.com/documents/LEGACY10-RETIREMENTSUPP.pdf
If you have a persuasive personality, a strong aptitude for working with numbers and a desire to help others, you might enjoy a career as an insurance salesperson. Your options include a path as an insurance broker or insurance agent. While both occupations involve the sale of insurance policies, there are also some important differences to consider.
Also, the case study you reference is interesting for several reasons. First of all, it’s a single example out of what I assume are millions, and there’s therefore no real way to determine whether it’s actually representative for anyone else. Second, they actually ask whether it would have been better to buy term and invest the difference, and the proceed to say it’s not worth evaluating. Funny!
Captive Agents - Captive insurance agents represent just one insurance carrier. In essence, they are employees of the carrier. The upside of working with a captive agent is that he or she has exceptionally thorough product knowledge. The downside is that he/she cannot provide access to products or pricing from outside their respective company. For this reason, you must have a high tolerance for carrier-specific terms, since each carrier and its in-house representatives may use language that is tough to compare across several companies that you encounter. Nevertheless, tap into that exceptional product knowledge and get smarter along the way as you search. The surge in online insurance websites offers consumers yet another option to use as part of their selection strategy. It is easy to find an insurance agent online, particularly one from a national insurance provider. Moreover, with 24-7 online access and quick comparison of policies, these web services are convenient, quick and a great way to ballpark quotes and to give you exposure to a wide variety of insurance providers. When you find one that is appealing to you, give them a call or fill out an agent request online.
Question Matt, what are your credentials? On the subject of finance and securities, do you hold any of the licenses I mentioned in my response earlier? Are you in the industry, or were you just sold by an agent and didn’t know what you were buying and now you are having buyers remorse looking at an illustration that was shown to you and figuring how you may have gotten a little less than you bargained for by using a calculator? Because dealing with some of our top clients who are in a tax bracket that you nor I will ever see, they are happy with the level of service we provide and the products we offer, maybe you just had a bad agent that needed to close a deal before the month’ s end and made you a customer and it was very transactional as opposed to assessing your need and making you a client. If you couldn’t afford the policy he should have given you a term policy that you could later convert. People with the money prefer not to “rent” as in a term policy, and people that can afford it get permanent insurance. Some people want their wealth to be managed properly and leave a legacy behind for future generations, that is done through life insurance and the other products we offer.
Property insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. The term property insurance may, like casualty insurance, be used as a broad category of various subtypes of insurance, some of which are listed below:
Policies not available in all states. Suicide, misstatement and misrepresentation restrictions may apply. All applications for insurance are subject to underwriting qualification by the specific insurance company to which the application is submitted. Availability of premium rates and policy forms may be changed by each insurer without prior notice. Florida residents, please review carrier and product details here.
Unlike insurance agents, brokers typically have access to many different policies offered by various companies — not just a few policies offered by a single company. They may also have access to policies that are not available to most consumers. Having a wide selection of policies to choose from can ensure that clients have the best possible coverage and the best rates. It may also make the process more complicated, as more choices can lead to confusion over which policies will provide the best coverage. A broker can assist clients in choosing the right policies for their home, business, family or automobile to make sure that they are adequately protected. This includes more than simply looking at the premium rates or policy limits; it involves a thorough analysis of what exactly each policy covers and excludes to ensure that it is the right policy for the client.
The mortality of underwritten persons rises much more quickly than the general population. At the end of 10 years, the mortality of that 25-year-old, non-smoking male is 0.66/1000/year. Consequently, in a group of one thousand 25-year-old males with a $100,000 policy, all of average health, a life insurance company would have to collect approximately $50 a year from each participant to cover the relatively few expected claims. (0.35 to 0.66 expected deaths in each year × $100,000 payout per death = $35 per policy.) Other costs, such as administrative and sales expenses, also need to be considered when setting the premiums. A 10-year policy for a 25-year-old non-smoking male with preferred medical history may get offers as low as $90 per year for a $100,000 policy in the competitive US life insurance market.
Typically, life insurance is chosen based on the needs and goals of the owner. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage. It's important to note that death benefits from all types of life insurance are generally income tax-free.1
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Now, it turns out that we have higher, broader family obligations than I anticipated 20-27 years ago. My wife and I plan to possibly keep working past 65 (which I hadn’t anticipated) and would like to be able to fund these obligations even if we were to die before our now planned time to stop working (that goes past the periods anticipated by the terms of our term policies). Our term policies and term coverage are beginning to expire and due to certain issues, at best, we would have to pay very high premiums for anything I would try to purchase now, if we would qualify at all.
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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.

Studies have shown that roughly half of a stock's price movement can be attributed to a stock's industry group. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. By focusing on the top stocks within the top 50% of Zacks Ranked Industries, you can dramatically improve your stock picking success.


Example a 30 year male old non-smoker can purchase a small 25,000 policy for 34.97 a month, by adding an additional 10 a month or paying 44.97 a month he will have after the 1st year $25,649 death benefit, this will increase every year. After 20 years he will have $41,492 death benefit non guaranteed death benefit or a $32,258 guaranteed death benefit. The difference in death benefit is the non guaranteed assumes dividends. This company has been around for over 100 years and every year has declared a dividend, which is important to note despite not being guaranteed there is a high probability the person will end up better off than the guaranteed. After 30 years the death benefit will be $52,008 at this point (or any point whatsoever) the person can decide to take reduced paid up insurance,at this 30 year mark if they take RPU they can keep 45,485 of insurance for the rest of their lives, this amount will keep going up as long as the company keeps issuing a dividend. i think this is so cool. The person has paid $16,200 over those 30 years and the coverage is way more than that, a few cents on the dollar.
In 2017, within the framework of the joint project of the Bank of Russia and Yandex, a special check mark (a green circle with a tick and ‘Реестр ЦБ РФ’ (Unified state register of insurance entities) text box) appeared in the search for Yandex system, informing the consumer that the company's financial services are offered on the marked website, which has the status of an insurance company, a broker or a mutual insurance association.[50]
We were sold a whole life policy from Mass Mutual for my husband, but we also have term insurance on both of us. We are on a 10 year track to pay off the policy and have three years left. Is it still a “bad investment” once the policy is paid off? Should we be expecting those 0.74% yearly returns for a fully paid-off policy? Or does that apply only if one is paying premiums on it for the next 30+ years? Whole life insurance appealed to me because I am extremely squeamish about the stock market and don’t want to pay a financial planner on a regular basis. I’d rather have low (but not 0.74%), steady returns than high risk/high reward investments. Did we still make a mistake by buying whole life?
In Jordan’s case, assuming that all those numbers will stay consistent and that there aren’t any scenarios in which he might need to put significantly more into the policy in order to keep it active (which is possible), then it’s a relatively small price to pay for security that sounds like is important to him. I wouldn’t personally take out the policy because I would rather put that money to work elsewhere, but I could understand the appeal.
Professional liability insurance, also called professional indemnity insurance (PI), protects insured professionals such as architectural corporations and medical practitioners against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called medical malpractice insurance.
Universal life insurance is a type of permanent life insurance designed to provide lifetime coverage. Unlike whole life insurance, universal life insurance policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime. Additionally, due to its lifetime coverage, universal life typically has higher premium payments than term.

Dealing with an insurance broker as opposed to directly with an insurer is something many customers (particularly businesses) choose to do in Australia for reasons including: the ease of having the "shopping around done for them"; having the opportunity for premium funding which allows for larger insurance policies to be paid in installments rather than all at once; dealing with one broker for all policies from the car insurance to professional indemnity insurance rather than dealing directly with several insurers; and, the ease of having claims managed by the broker who deals directly with the insurer on the client's behalf.
Property insurance provides protection against risks to property, such as fire, theft or weather damage. This may include specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance. The term property insurance may, like casualty insurance, be used as a broad category of various subtypes of insurance, some of which are listed below:
After insurance has been selected and purchased, most insurance brokers will continue to provide service to their clients. This includes advising clients on technical issues that may be helpful in the event that a client has to file a claim, helping clients decide if they should change their insurance policies or coverage, and even making sure that clients comply with their policy’s requirements.
Crop insurance may be purchased by farmers to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease.[29] Index based crop insurance uses models of how climate extremes affect crop production to define certain climate triggers that if surpassed have high probabilities of causing substantial crop loss. When harvest losses occur associated with exceeding the climate trigger threshold, the index-insured farmer is entitled to a compensation payment[30].
The IRS regulation on how much can be put in over 7 year period to not cause a whole life policy to be considered a Modified Endowment Contract. Additionally, many long standing highly rated institutions will limit the amount of OPP that can be dumped into the policy over a given period. Why is that? Because people will use whole life in low interest environments with the intention of withdrawing in the event of a market change.

But here is the key: the most astute line in the article is “If you have a large amount of money, have already maxed out all of your tax-deferred savings, and you can afford to front-load your policy with large payments in the first several years, it can provide better returns than was discussed above. It is a useful product in a limited number of cases.”
4. If you end up wanting permanent life insurance when you get older, you have plenty of options other than buying whole life insurance as an investment when you’re young. You could convert a term policy. You could buy guaranteed no-lapse universal life. There are plenty of options that don’t require you lock yourself into a poorly-performing policy at a young age when that cash flow would be better used elsewhere.
They cannot provide you with any final answers. Calculators only allow you to perform "hypotheticals," recalculating and generating new results as you make and input new assumptions. Using these tools and educating yourself on the workings of life insurance and other financial products, however, can help you feel more comfortable when discussing your needs with professionals like a New York Life agent.
For term life, I’d agree that it is usually a really bad investment. Why? Because a lot of people only pay in their premiums and never get any return. If you have term, then by the time you are older and your kids are self-sufficient (hopefully), your incentive to keep renewing will be pretty low. You may indeed just stop paying in and let the insurance lapse. Or, also quite possible, you will have to renew your policy but the premiums will be way too high because you are now much older and your health is worse. In some cases, you won’t be able to renew it at all.
Additionally, this can be a great way to compliment a financial plan that is linked to the markets performance. When I am in my 60’s nearing retirement and have a good amount of cash value in my policy–I will not be terribly worried about the market performance (401(k)s/mutual funds/ IRA/ stocks). I know that flucuations in the market will occur and if a recession happens when I am 62, I will use my cash and policy cash value to hold me over until the markets recover. Again, my aim is not to buy high and sell low, it is to buy low and sell high.
7Variable universal life products are long-term investments designed to provide life insurance protection and flexibility in connection with premium payments and death benefits. You should carefully consider the investment objectives, risks, charges, and expenses of the investment alternatives before purchasing a policy. These policies have limitations and are sold by prospectus only. The prospectus contains details on the investment alternatives, policy features, the underlying portfolios, fees, charges, expenses, and other pertinent information. To obtain a prospectus or a copy of the underlying portfolio prospectuses, please contact Allstate Assurance Company. Please read the prospectuses carefully before purchasing a contract.
There have been enough people screwed over by stock insurance company agents to justify this article. However, before jumping to conclusions about Whole Life, I would recommend everyone research the business structure of a “Mutual Insurance Company” such as MassMutual or Northwest Mutual. These companies are literally owned by the policyholders and have historically paid dividends that equal the premiums of a whole life policy within 1.5 decades. They also typically perform better than the illustrations. It’s not necessarily an “Investment,” but sacrificing higher returns for security in the form of liquid cash and life insurance coverage seems like a wise decision to me.
Insurance brokers are professionals in the insurance industry who sell, solicit, and negotiate insurance for a living. They are regulated by the state and must meet certain licensing requirements to do business in their state. Insurance brokers are professional advisers, representing and working on behalf of their clients. Brokers help clients understand their risks and advise them on which assets merit insurance and which do not. Insurance brokers may have industry specializations as well. Keep in mind that insurance brokers are not actual insurers; they are the liaisons between the insurance companies and clients and work on the client’s behalf.
We don’t have enough information in these posts to make a recommendation. You should meet with a few advisors and get one you’re on the same page with. If they can’t explain why you “need” whole life (remember, there are other options for permanent insurance, including level-cost T100), dump him…you can do better. You should be requesting a few funding alternatives rather than banking on one strategy with different brokers. You need to really do your homework.

Insurance Specialist Company


Our Entertainment Specialty team focuses on protecting touring entertainers, music tours, outdoor festivals, live events, promoters and professionally managed bands. We understand that our clients, several of whom are Grammy winners and Billboard Chart Toppers, perform all over the world and need an insurance partner who is flexible, understands the risks, and offers tailored insurance solutions. We make sure you have the right protection so you can focus on what you do best.
I think that post does a good job of showing how the illustrated (non-guaranteed) return from a whole life insurance policy is comparable to one of the most conservative types of traditional investments you can make IF you end up keeping the policy for 30 years. Of course, that conservative traditional investment doesn’t have most of the other downsides discussed here AND doesn’t require you to hold it for 30 years to see a reasonable return. And, of course, you are allowed to put your money into other, less conservative investments outside of a life insurance policy, some of which may even have special tax advantages (401(k), IRA, HSA, 529, etc.).
An entity which provides insurance is known as an insurer, insurance company, insurance carrier or underwriter. A person or entity who buys insurance is known as an insured or as a policyholder. The insurance transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate the insured in the event of a covered loss. The loss may or may not be financial, but it must be reducible to financial terms, and usually involves something in which the insured has an insurable interest established by ownership, possession, or pre-existing relationship.

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Weiner was talking about rolling returns for Vanguard. So, it’s his argument, not mine. And, this is a different issue from what you’re talking about anyway regarding annual returns based on monthy savings. So I’m not sure where you’re going with this or why you think it’s misleading. I believe Weiner got his figures from Vanguard…so…that would mean Vanguard is misleading itself? Doesn’t make sense man.

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In Australia, all insurance brokers are required under the Financial Services Reform Act 2001[10] to be licensed by the federal government’s Australian Securities and Investments Commission (ASIC).[11] Reputable and experienced insurance brokers in Australia will generally also hold additional qualifications such as a certificate or diploma in financial services which requires the completion of in depth studies in a specific area, the most common being general insurance or insurance brokering.
In other words, if you put a dollar into the market, and then the market drops resulting in a panic and you pull out what you put in, you’re more than likely pulling out .65 cents as opposed to the dollar. You’ve lost money, because you pulled out in a low market. However, if you have 3 to 4 years worth of living expenses in a non-correlated asset (I.E. Whole Life) you can use that as an effective way to bridge the gap until the market comes back up again. Sure it may cost a little more, but in the end you’re making a lot more money, since you’re selling your dollar for a dollar or more, as opposed to selling it for .65 cents.
The above is meant as general information and as general policy descriptions to help you understand the different types of coverages. These descriptions do not refer to any specific contract of insurance and they do not modify any definitions, exclusions or any other provision expressly stated in any contracts of insurance. We encourage you to speak to your insurance representative and to read your policy contract to fully understand your coverages.
What you are telling people in this post is irresponsible and bad advice. You are correct that term is a lot cheaper than whole life, but you are leaving out the problems with term insurance that whole life policy can fix at any age. Did you know only 2% of term policies are ever paid a death benefit on? You can buy a 20 year term at age 30 but what happens when you turn 51? Buy more term at your current health at 51? What if you get cancer or other health problems that cause you to become uninsurable? Would you rather pay $100 a month for a $100,000 permanent policy and earn cash value, or would you rather pay $40 a month for 20 years on the same policy and then have to buy a new term policy at age 51 that will be $200-$300 a month and even then if you don’t die during that term then what do you have when your 80? Nothing, because no one is going to sale you life insurance at age 80. I don’t think buying term at a young age is a bad idea, but the longer you wait to transfer some of that to permanent insurance you are digging yourself and your family a deeper hole when you live past that term policy and have nothing to leave them with.

Also, during your life if the policy pays 4% and you take a loan against the policy (for any reason) the net effect is that you are paying yourself the 4%, and perhaps 1 or 2% to the insurance company. CSV collateral loans typically are cheaper than unsecured loans, or auto loans. Used properly the whole life insurance contract is one of the most versatile wealth building tools.
MetLife has become aware of a recent phishing attack against some of our customers. ‘Phishing’ is a fraudulent attempt to obtain an individual’s personal information, often through a misleading email, text or other online communication. Keeping your personal information secure is a top priority of MetLife. That's why we encourage you to take precautions to protect your personal data, and why we do not ask you to verify your personal or account information by email, text message or online. If you suspect you received a phishing email, please forward it to: phish@metlife.com. Delete the email after you forward it, and do not click on any links it contains. If you believe you entered information into a linked website, change your login information immediately. For helpful hints to protect your personal information, visit the following website: https://www.consumer.ftc.gov/articles/0003-phishing

1) I believe that when done correctly, it is insurance that CANNOT BE TAKEN AWAY. One of the most important things about whole life is that the annual premium is FIXED at a constant level FOREVER and the death benefit cannot be taken away if you continue paying in (these are the basics but I think worth repeating). I bought my policy at age 32. If I get heart disease, diabetes, or any of thousands of exclusionary conditions over the rest of my life, it does not matter. My insurance will not go away. If you rely on term insurance, then even if you get a 20 year policy as a 30 year old, then at age 50 there is a good chance you will either i) have to pay MUCH higher premiums to continue your coverage or ii) not be able to get coverage at all. It is just like health insurance before ACA. If you think you can keep rolling over term life, you are taking a very big gamble. This is probably fine if you are only insuring to protect your family in your early working years. But if you want to make sure your heirs eventually get a benefit on your death, term life is a bad gamble. Which leads into #2…

An insurance broker is experienced in different types of insurance and risk management. They help individuals and companies procure insurance for themselves, their homes, their businesses or their families. Brokers may focus on one particular type of insurance or industry, or they could provide advice on many different types of insurance. They provide a service to their customers in helping them find and buy insurance — usually at no cost to their client.

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The first years premiums goes to the insurance agent who sold you the policy…and I’m sure there are plenty of other hidden fees in there. I almost went with whole life insurance as a friend was working as an insurance agent and I had just graduated college. I decided against it though. Read a book that said that I should instead buy term and invest the difference. Another problem with whole life insurance is that the premiums are much more expensive than term life insurance…if someone chooses whole life, they will likely choose a lesser coverage and might be underinsured if something unfortunate were to occurr.
It’s very true that you don’t own the cash value in anywhere near the same way that you own your other investments. You can only access it in certain circumstances, and even then there are big conditions like surrender charges and interest. And you’re also correct that you can’t get the cash value AND the insurance proceeds. It’s either/or. All good points.
Know when to cut coverage. Don’t strip away coverage just for the sake of a lower price. You’ll need full coverage car insurance to satisfy the terms of an auto loan, and you’ll want it as long as your car would be a financial burden to replace. But for older cars, you can drop comprehensive and collision coverage, which only pay out up to your car’s current value, minus the deductible.
Add to this, when a younger person owns whole life (or cash value fixed universal life) they have the life insurance coverage they need, are building a tax free bond portfolio for the future (which as most people realize is what older investors shift into as the age) but also have a accumulation vehicle that can “self complete” if they become disabled. 401k’s can’t provide this…they don’t even match the long term return of the do nothing stock markets because of the fee’s they charge. That is to say…there is no “alpha”
Back to guaranteed growth…. Whole Life policies are interest rate driven based on the economy, but your “Cash Account” will increase every year, regardless of the market. Compound, tax-free growth. The dividends paid to the policy owners are also not taxable. Dividends are not guaranteed, but take a look at the dividend history for companies like Mass Mutual, Penn Mutual and Guardian. They might as well be guaranteed.

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