In the European Union, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994, created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU (subject to permission from authority in the head office) and allowed insurance consumers to purchase insurance from any insurer in the EU.[44] As far as insurance in the United Kingdom, the Financial Services Authority took over insurance regulation from the General Insurance Standards Council in 2005;[45] laws passed include the Insurance Companies Act 1973 and another in 1982,[46] and reforms to warranty and other aspects under discussion as of 2012.[47]
The first life insurance policies were taken out in the early 18th century. The first company to offer life insurance was the Amicable Society for a Perpetual Assurance Office, founded in London in 1706 by William Talbot and Sir Thomas Allen.[7][8] Edward Rowe Mores established the Society for Equitable Assurances on Lives and Survivorship in 1762.

Whole life insurance is by definition undiversified. You are investing a large amount of money with a single company and relying entirely on their goodwill to give you good returns. The insurance company will make their own investments and then decide what portion of their returns they would like to pass on to their policyholders. You are completely at their whim. If that one company goes bankrupt, has some bad years, or simply changes their outlook on paying out to customers, your return will suffer.


First, although there are no taxes, there is interest. When you borrow from your policy, interest starts accruing from day 1 and keeps accruing until you pay back the loan. If you’re using it for retirement purposes, are you going to pay back the loan? Of course not. So the interest keeps accruing. And that interest applies to all money withdrawn, including your contributions, which were already taxed.
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.

Also, you said whole life is not an investment. But by definition, it is an investment. An investment is simply where you put money into something expecting a return in the future. And whole life insurance does provide that. Plus if it is a mutual company as mine is then you become a partial owner which means you get to vote and help the business make good business decisions.

Insurance brokers perform a plethora of duties for individuals and businesses in search of the right insurance for them. When you contact an insurance broker for a quote, he will acquire some information and assess your individual needs. An insurance broker will compare the coverage of various insurers to get you the best conditions and rates. A broker will also search for opportunities to combine different types of insurances to obtain discounts or reduce premiums. As brokers do not work for the insurance companies, their recommendations are unbiased and in favor of the insurance buyer.
In the European Union, the Third Non-Life Directive and the Third Life Directive, both passed in 1992 and effective 1994, created a single insurance market in Europe and allowed insurance companies to offer insurance anywhere in the EU (subject to permission from authority in the head office) and allowed insurance consumers to purchase insurance from any insurer in the EU.[44] As far as insurance in the United Kingdom, the Financial Services Authority took over insurance regulation from the General Insurance Standards Council in 2005;[45] laws passed include the Insurance Companies Act 1973 and another in 1982,[46] and reforms to warranty and other aspects under discussion as of 2012.[47]
Insurance brokers play a significant role in helping companies and individuals procure property and casualty (liability) insurance, life insurance and annuities, and accident and health insurance. For example, research shows that brokers play a significant role in helping small employers find health insurance, particularly in more competitive markets. Average small group commissions range from two percent to eight percent of premiums. Brokers provide services beyond procuring insurance, such as providing risk assessments, insurance consulting services, insurance-related regulatory and legislative updates, claims assistance services, assisting with employee enrollment, and helping to resolve benefit issues.[3] However, some states consider the provision of services that are unrelated to the insurance procured through the broker to be an impermissible rebate or inducement.
Like any other type of insurance, you're in control of your life insurance policy. You determine how much coverage you need (from $50,000 up to a $1 million policy), how long you need it, who's covered and when you make your payments (called premiums). Usually, you can choose to pay monthly, annually or quarterly for 10, 20, 30 years or over your lifetime to maintain the coverage. When you die, if your policy is still active, the people you've listed on your policy (called your beneficiaries) get paid the death benefit. In most cases, this payment is paid in one lump sum to an individual or family.

Finally, the loan that I mentioned in my above post as interest free and tax free after the 11th year are a little more complicated than a “free loan”. First, the rate may increase in the future (at the discretion of the management) to a max 0.25% so that over time would add up if you took out a loan for retirement and had no intention of paying it back. Also, the loan balance is actually transferred to a loan reserve account where interest is charged at 2%, but at the same time the money in the loan reserve account earns interest of 2% which is credited to the Policy Value. So this is how they achieve an “interest and tax free” loan. I actually did not understand the specifics of this transaction or any IRS consequences that you could potentially have.
In the United States, the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation.

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For more than 85 years, Safeco has delivered new and better ways to protect cars and drivers with auto insurance. If you drive a sedan, hybrid, minivan, station wagon, SUV, pickup truck or anything in between, your local independent agent can provide personalized coverage that's right for you. If trouble comes along, we’ll make sure you’re taken care of every step of the way.
There are certain instances where whole life can be useful. If you have a genuine need for a permanent death benefit, such as having a disabled child, it can serve a valuable purpose. 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. So it is a useful product in a limited number of cases.

Life insurance helps you plan ahead and provide long-term financial security for your family when they would need it most. You can't put a dollar amount on your loved ones, but a term life insurance policy can help ensure their future is protected. Determine how much coverage you need and how long it's needed, and the GEICO Insurance Agency, Inc. and Life Quotes, Inc. can provide an affordable life insurance policy that is the perfect fit for you and your family. Get a life insurance quote online or call us at (888) 532-5433 and get the satisfaction of knowing your loved ones are protected.


2. My analogy to a house wasn’t intended to compare the merits of an investment. It was simply a way to explain the Cash Value of a policy, in terms that people could understand better. We many times hear the argument about Whole Life Cash value: “It’s my money. Why do I have to borrow against it?” Giving the analogy of a home (or for that matter any asset of value, be it real estate, or stocks, bonds or mutual funds held in an account that allows for margin loans) helps people understand the difference between an asset that has value, to actual cash. It also helps people understand why sometimes it is preferable to borrow against an asset, rather than liquidate the asset.
Good question Pixley. Evaluating a policy that’s been in place for 7 years, as it sounds like yours has, is very different from evaluating a new policy. The key is to ignore everything that’s happened in the past and evaluate it only based on how you expect it to perform going forward. I would suggest getting an in-force illustration and running the numbers for yourself based on both the guarantees and projections. Every policy is different, especially those that have been in place for a while, so I really can’t say what you should expect.
I have worked in the Banking Business for over 7 years. After years of working for a company/corporation, I decided to start my own business in the same business field. I am now a Financial specialist with New York Life Insurance Company for almost 2 years. I get to do the same thing as before but now I’m running my own business. Trust is everything and I make it my mission to earn my clients trust.

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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.
2. You have to borrow your own money @ 6-12% and wait up to 6 months contractually to get it. Whhich now increases your already high monthly premiums. If you don’t pay back the loan, they add interest on interest! 3.It takes 3 years to build a dollar of cash value giving you a 0% rate of return for the first 3 years. 4.Any dividends you get back is a return of the money that they over charged you. Bottom Line: Horrible Product that is good for the Whole Life Company and Agent and Bad for the Consumer!
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Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage arising from any cause (including the negligence of the insured) not otherwise expressly excluded. Builder's risk insurance is coverage that protects a person's or organization's insurable interest in materials, fixtures or equipment being used in the construction or renovation of a building or structure should those items sustain physical loss or damage from an insured peril.[28]
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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.
Large loss: The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to a buyer.
My argument is based on the fact that whole life insurance is often sold as an investment, and therefore many people buy it as an investment. I am well aware that there are other reasons people buy it, and those are explicitly acknowledged in the article. The rest of your questions have already been addressed in both the article and other comments.

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