There are also companies known as "insurance consultants". Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies. Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.
The cheapest car insurance, period, will likely be the minimum coverage required in your state. In most states this is liability insurance only, which covers property damage and medical bills for others due to accidents you cause. Some states also require uninsured and underinsured motorist coverage, which pay for your injuries or damage if an at-fault driver doesn’t have enough insurance.
You can own both whole life and term life policies at the same time. People who are looking at this option typically already have a whole life policy. However, they may find that they want additional short-term insurance coverage such as for 10 years. In this instance, buying a term policy for the amount of life insurance you need for that extra protection can be a good solution.
A few comments… You shouldn’t ever be buying whole life insurance for purely for the reason of investing, you buy any life insurance because you need life insurance, the investment component is secondary. So not sure why we are analyzing it purely as an investment (I actually do know why, because some agents try to sell it this way, and Matt is trying to help them avoid a pitfall).
Hi Matt, Enjoyed the article. I agree with a lot of what I have seen up here, both by you and other commenters. I believe that a lot of the typical Dave Ramsey advice applies to the vast majority of the population, who can’t afford to pay $500 month premiums w/$500 month overfunds. Yeah, if you’re in a position where that amount is no more than 20% of your savings, wow & congrats, and it could possibly be a good idea. But that’s like 50% of mine. As someone who is new to investing and just a year out of school, I recently sat down with a guy from one of the more respectable companies in the WLI market. I truly believe it would have been a good deal for a very select group of individuals, but for me, there were two main turn-offs. First, I simply couldn’t commit to send such a large portion of my savings for the next 10, 20, or 30 years. But secondly, I just didn’t fully understand the policy. From other comments, I think others are in the same boat. These things are confusing, I asked lots of questions but still it just didn’t make sense what was going on with every level. I’ve done my research on saving/investing, and gotten a pretty good grasp so far of my strategy, but my mind still just hasn’t fully grasped WLI. So I backed off. And I’d encourage everyone to do the same – if you don’t know exactly what it is that you’re doing and can’t understand or explain it, then don’t get in to it.
First, a term life insurance policy will cost much less than a whole life insurance policy with the same death benefit, often around 12 times less. So your example of a $30,000 whole life policy with a $20 premium compared to a $30,000 term life policy with that same $20 premium is not a valid comparison. The term life premium would be a fraction of the whole life premium.
First, a term life insurance policy will cost much less than a whole life insurance policy with the same death benefit, often around 12 times less. So your example of a $30,000 whole life policy with a $20 premium compared to a $30,000 term life policy with that same $20 premium is not a valid comparison. The term life premium would be a fraction of the whole life premium.
I have no idea how the Hiltons manage their money, so I can’t comment/fact check what you’re saying here. But in a broader sense, the right financial moves for the wealthiest 1% of Americans are often much different than the right moves for the other 99%. If you’re already incredibly wealthy, then sure, a well-designed permanent life insurance policy can make a lot of sense. If you’re trying to build wealth, then no it usually doesn’t.
So let me ask, does she have a need for life insurance? That is, what would the insurance proceeds actually be used for? It may be that she no longer has a need and could simply unload the policy. If that’s the case, I have heard of people having some luck selling these policies to a third party. It’s not something I have experience with, but I could ask around for you if you’d like.
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!
I am looking at it all from the perspective of an inheritance. In my line of work, I see pensions and IRA’s taken by healthcare and Medicaid all the time. Heirs are left with nothing and it is sad. Im researching and researching but cannot find something that is safe enough, can grow to at least $100,000 for thirty so years, and cannot be taken touched aside from….life insurance. I have elderly grandfathers who left their families w/ something because of life insurance. My veteran grandfathers
Insurance Journal Co Aurora CO 80015

Safe Auto Group Agency, Inc. will be the agent of record for any quotes issued or policies bound via this website. However, the website and domain are maintained, serviced and published by Millennial Specialty Insurance, LLC. ("MSI"). MSI collects, maintains and stores the data and information collected on and through this website and from third party vendors. Safe Auto Group Agency, Inc. is not responsible for the content or operation of this website or how MSI handles or uses your information. Please reference MSI's Privacy Policy and Terms of Use for further information.
Insurance is offered by Safeco Insurance Company of America and/or its affiliates, with their principal place of business at 175 Berkeley Street, Boston, Massachusetts, 02116. This website provides a simplified description of coverage. Nothing stated herein creates a contract. All statements made are subject to the provisions, exclusions, conditions and limitations of the applicable insurance policy. Please refer to actual policy forms for complete details regarding the coverage discussed. If the information in these materials conflicts with the policy language that it describes, the policy language prevails. Coverages and features not available in all states. Eligibility is subject to meeting applicable underwriting criteria.
Home insurance, also commonly called hazard insurance or homeowners insurance (often abbreviated in the real estate industry as HOI), provides coverage for damage or destruction of the policyholder's home. In some geographical areas, the policy may exclude certain types of risks, such as flood or earthquake, that require additional coverage. Maintenance-related issues are typically the homeowner's responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.[31]
Actually I’m satisfied with your response. Because it makes sense, people without the money shouldn’t purchase whole life. We only tell our clients if they can afford it to purchase it. That’s common sense. And if you need something that will take care of your expenses when you are gone and don’t have a lot of money, then term is the way to go. If you have the money whole life is a good tool for tax diversification. But there is too much to talk about that those of us that are in the industry and are actually licensed to help people in these areas and it would take up too much space. We’d be having this discussion for months. But you make valid points, but to say whole life is a bad investment just seems wrong, because of the percentage of people that can use it, it works perfect. I have a friend who makes $80,000 a month who recently came into oil and was discouraged by blogs like this. After I explained to her how ridiculous blogs like this are for her situation she was actually calm and more receptive. I appreciate you informing the public. And in our jobs we do that well enough, I think instead of trying to be Dave Ramsey, you should just title it, “Why Whole Life is a Bad investment for the average Joe or 98% of the population.
Each type of life insurance product has its advantages and disadvantages. You can’t say term life is the best, whole life is the best or universal life is the best. It depends on what an individual client need and his or her situation. As a client, they should know all the advantages and disadvantages but of course, they are under the supervision of a certain type of insurance agent that can be biased and try to sell what they have to offer to form their companies. Avoid an agent that focuses on selling one type of product. Talk to an agent who can provide the knowledge of each type and you can choose what best for you.
A few comments… You shouldn’t ever be buying whole life insurance for purely for the reason of investing, you buy any life insurance because you need life insurance, the investment component is secondary. So not sure why we are analyzing it purely as an investment (I actually do know why, because some agents try to sell it this way, and Matt is trying to help them avoid a pitfall). 

Hi Matt. Read your posts and comments on Whole Life and the overfunding options available. I have a different situation involving a policy with Prudential called Variable Appreciable Life. I am looking for a safe haven for some available cash with a minimum return of 4%. Agent/Financial Planner has suggested I overfund the balance of that VAL policy. Yes, I am quite conservative but have enough invested in 401k, Stocks, Funds etc. Policy is 50K and issued in 1990. Wife and I are in mid seventies and looking to have 30-40K of available liquid cash. Can add/withdraw the overfunding $ at any time. Interest guarantee is 4.0%.
Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that requires participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):
Any reputable source will report mutual fund and stock returns as “annualized” figures, which takes the sequence of returns into account. Another term for this is “geometric average”, which again accounts for the order in which returns are received. So while there are some financial “experts” out there touting average returns (cough, Dave Ramsey), for the most part what you’re talking about here is not a factor.
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.
Those who buy life insurance do so to help ensure their loved ones are taken care of financially. Life insurance is a promise by an insurance company to pay those who depend on you a sum of money upon your death. In return, you make periodic payments called premiums. Premiums can be based on factors such as age, gender, medical history and the dollar amount of the life insurance you purchase.

Hi Jim. A couple of corrections. She’s actually secured a $36,250 asset for $25,000, as that’s what she would walk away with today if she decided to stop paying the premiums. And it would not be tax-free if she surrendered the policy today. Yes she could take tax-free withdrawals from the $36,250 today, but as I discuss above they would be subject to interest which is essentially the same effect as taxation.
Any personal information gathered by SelectQuote is used only for the process of qualifying you for insurance products. Where permitted by law, your information may be used to request credit, medical and/or driving records from a third party. This information is used for underwriting the application in accordance with the disclosures and releases that you must review and sign. These authorizations are included with your application.
Agents and brokers act as intermediaries between you (the insurance buyer) and your insurers. Each has a legal duty to help you obtain appropriate coverage at a reasonable price. Each must have a license to distribute the type of insurance he or she is selling. An agent or broker must also adhere to the regulations enforced by your state insurance department.
Interesting read, I certainly agreed with the lack of transparency and fees associated with some policies. I would disagree though that it is undiversified. Take Northwestern Mutual, an almost 300 billion dollar general portfolio that you participate in as a policy owner. Most is bonds, like all other companies, but the remaining investments are private equity deals that as individual investors, we would have no access to. Also keep in mind that the equity in policies are extremely safe. Look at any market crash, and compare what dividends we’re paid out by the top companies. The equity in the policies do not go backwards which makes it very attractive when you’re retired because you’ll have no other sources of money so well protected and still growing at 4%.

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.

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.
There is no right or wrong answer. Buying term insurance is as stated a pure play, cheap when young, expensive when old or with medical issues. Whole life from a bad insurance company is bad. However, one of the best ways to invest money is to diversify. Often, customers buy “Universal” whole life policies that are underfunded, meaning as they get old, these policies become expensive and are often cancelled. Not good. What I have done was term policies when young along with a small (50k) whole life policy. Having a whole life policy allows forced savings and a build up of capital. With the right policy with guaranteed returns, my whole life police has doubled in value and will be inherited tax and probate free to my dependents. If I had no money, it would pay for my funeral and leave funds to my spouse. I have saved and invested money, have multiple 401K’s, and no longer need the insurance. However, 30 years ago, I could not predict the future, and if I had to do it all over again, I would still buy the same policies. However, times have changed, interest rates are low, and the future is uncertain. I still believe, a small whole life policy with a great company (constant, unchanging premium) for a young family just starting out is a good way to provide some security while forcing one to save and invest capital. Is it the best way to invest? No. But many young do not know where to start and it is a great start. Also note, that often as the cash value increases, the death benefit also increases in many policies. Hindsight is always 2020, but one cannot predict the future, that is why we buy insurance. I also found that converting a term insurance police into whole life can be very expensive. Would a whole life policy be my only investment. No. I buy stocks, bonds, CD’s, have 401K, IRA, bank deposits, etc. A whole life policy is a small slice of the pie; diversity. In summary, both policies have merit.
What will you need the life insurance for at that point? Would you be able to save $10,000 in a savings account between now and age 70 instead of paying for whole life insurance? If you take the $26.50 difference in premiums that you mention here and put it into a savings account each month, you’ll have about $7,782 by age 70, assuming 1.5% interest. If you can increase that monthly contribution to $34.25, you’ll reach just over $10,000 by age 70. And that money will be available for whatever you or your family need, any time you want.
Of course the fees are applied to your principle and interest, which drags the value of your account down to painful levels. The simulation that the salesman ran for me was based on the assumption that the value of the account would grow 8% compounded every year. The results of this simulations looked really cool at first because the salesman focused on the long term results and the steady increase in death benefit. But when I looked at the numbers more closely, it was sobering. The investment produced negative interest in the first 7 years (as high as -37.51% in the first year) after which it turned the corner and then began to return 6-8% after year 11.

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.


Redlining is the practice of denying insurance coverage in specific geographic areas, supposedly because of a high likelihood of loss, while the alleged motivation is unlawful discrimination. Racial profiling or redlining has a long history in the property insurance industry in the United States. From a review of industry underwriting and marketing materials, court documents, and research by government agencies, industry and community groups, and academics, it is clear that race has long affected and continues to affect the policies and practices of the insurance industry.[53]

Cash value increases within the policy are not subject to income taxes unless certain events occur. For this reason, insurance policies can be a legal and legitimate tax shelter wherein savings can increase without taxation until the owner withdraws the money from the policy. In flexible-premium policies, large deposits of premium could cause the contract to be considered a modified endowment contract by the Internal Revenue Service (IRS), which negates many of the tax advantages associated with life insurance. The insurance company, in most cases, will inform the policy owner of this danger before deciding their premium.
Matt, may I ask you a question? I have a 25-year old $100K whole life policy with a surrender value of $43K, of which $21K is taxable. I’m 43 years old. Dividends now more than cover the $900/yr premium. Does it make sense to hold on to this? I am torn! I could surrender it and pay off a second mortgage which is at 7.6%… Thank you in advance. Love your site!
Medicare Brokers like Boomer Benefits also often provide simple and easy education to you about how Medicare works. Every year, thousands of Medicare beneficiaries feel frustrated after trying to read the Medicare handbook. At Boomer Benefits, we will educate you by breaking Medicare down into pieces that are easier to understand. This is why we are so well known as the baby boomer’s favorite insurance agency.
I am an agent with one of the top companies and have been for 5 years. The “buy term and invest the rest” sounds like a great idea but here’s what I have found. People don’t actually do it. You cannot change human behavior. I try to hold my clients accountable and want them to do the same for me. If a client is a spender, they will never stop being a spender. For those people we design a savings plan that let’s them spend their money guilt free, as long as they hit their monthly savings goal, they can spend what they wish.
As a financial planner I find this article very misleading. Whole life insurance can be an excellent way for someone to save for the long term. If you earn too much for a Roth IRA especially (180K plus for a household roughly) then whole life insurance is literally the only place to get tax free savings on growth  (tax free municipal bonds also but these have a lot of risk especially with interest rates going up). A properly designed whole life insurance policy with a good company like a New York Life,  Mass Mutual,  Northwestern etc which have always paid dividends since the mid 1800s can easily earn NET of fees and taxes 4-5% over a 25-30 year period. Which means in a taxable brokerage account for example or a bank account you would have to GROSS 6% or so to match this over that same period every year on average? On a virtually guaranteed basis this is tough to do. This doesn’t even speak to the point that you have a tax free permanent death benefit. When a client’s 20 year term runs up they almost always still want and need some life insurance,  and what if they aren’t insurable anymore? Getting some whole life when young and healthy,  savings/cash value aside,  assures them they’ll always have coverage which can someday go to kids,  grandkids etc which is a nice option. Whatever cash you pull out reduces the death benefit dollar for dollar, but if set up properly there will always be more than enough death benefit even after most of cash is taken out tax free in retirement, when the stock market is down (this is especially when you appreciate having a non correlated asset like whole life for when the market crashes and you can tap into your whole life cash so you don’t have to touch your investments in that downturn OR take advantage of the opportunity and but stocks when things are down with cars value). Interest does accrue on policy loan which is why the tax is cash free and the loop hole exists. But often the dividend more than offsets the policy loan interest which doesn’t have to be repaid and just comes off of the death benefit which is often just a bonus anyways. A client should make sure they have enough coverage of course which is why people often get a large term life insurance which is “cheap”  in addition to a smaller whole life which is a dual savings,  dual coverage to be in place when the term expires.
By clicking the "FINISH" button above and submitting your online term life insurance quote request to SelectQuote, you are agreeing by your electronic signature to give SelectQuote and Inside Response, Allied Insurance Partners and LiveOps, Inc., your prior express written consent and continuing established business relationship permission to call you at each cell and residential phone number you provided in your online quote request, and any other subscriber or user of these phone numbers, using an automatic dialing system and pre-recorded and artificial voice messages any time from and after your inquiry to SelectQuote for purposes of all federal and state telemarketing and Do-Not-Call laws and your prior affirmative written consent to email you at the email address(s) you provided in your online quote request, in each case to market our products and services to you and for all other purposes. Your consent is not required to get a quote or purchase anything from SelectQuote, and you may instead reach us by phone at 1-800-670-3213.
I see what you mean, but it also varies from insurer to insurer. From a purely investment standpoint whole life doesn’t make any sense. Someone’s insurance needs also differ. I’ve been with All state and NYL. With each there were major differences with not just price, but how the cash value accrual and withdrawing worked. I ultimately stuck with NYL as the rate of return had the biggest impact on premium payments. It reached a point where the cash value being added out-weighed the yearly premium. I haven’t had to pay for insurance for a few years but am still insured. My reason for going about it this way is because I don’t want to pay for it for the rest of my life. Plus the death benefit increases over time and the premiums stay the same. I’m running into people outliving the retirement benefits they got at work. You need to think for the future, but not just from one perspective. Are you interested in a rate of return? Than go for investment accounts. If you want something you eventually don’t have to keep paying for, whole life can be a great option but REMEMBER! Not all companies are the same and avoid universal indexed whole life. Those have increasing premiums. I know Dave Ramsey wants us to buy term and invest the difference, but you’re talking about renewing even some of the longest terms available 2 – 3 times before you’re of retirement age resulting in massive premiums to stay insured before you can dip into your investment accounts, unless you want to deal with early withdrawal penalties and huge surrender charges
Full Circle, one time I thought whole life insurance was great. Then I cashed it in, bought at least 5 new automobiles, a house, a couple motorcycles and more bullshit. Then I learned how to properly use life insurance as a bank, instead of borrowing money from a bank, I borrow the money from myself and pay myself back what I would have paid banks. I get to collect all the interest I would have paid the banks. I get to grow my money tax free. I get to pass my hard earned money on to my family tax free. The key is understanding Whole life vs creating your own banking system.
If you are just starting to consider life insurance at the age of 60, your children are most likely grown up and on their own, and your needs are very different. You might want a small term life insurance policy that could cover your final expenses, or you might be looking for a term life or whole life policy that could provide for your spouse’s needs if he or she lives on after your passing.
Matt, may I ask you a question? I have a 25-year old $100K whole life policy with a surrender value of $43K, of which $21K is taxable. I’m 43 years old. Dividends now more than cover the $900/yr premium. Does it make sense to hold on to this? I am torn! I could surrender it and pay off a second mortgage which is at 7.6%… Thank you in advance. Love your site! 

Insurance Rates Company


1. Cash Value. Yes, you can borrow it. Bad Idea. But did you know that if you die, you do not get your cash value, only the Face Amount of the Policy? If you live to age 100, your cash value is paid up and the policy is matured. If you die, again, your heirs do not get the cash value. It disappears magically. You cannot get both the cash value and the face amount of the policy. If you borrow it and don’t pay it back, it is subtracted from the amount paid to heirs at death.
And I agree with you Matt. People that just try to make a buck on someone else’s loss or something they truly can’t afford is despicable to me. And I apologize for my “are you licensed?” Comment. Your actually doing a noble thing as a father and informing people that need to hold on to what they can or invest it correctly in this economy. I have a lot of business owners and high end clients and I sell them whole life for a ton of reasons. But for my blue collar average joe or even white collar for that matter, I just wanna take care of them and their families. They’re not my customers their my clients. And that’s drilled into us by New York Life, I hope you have continued success in your Financial Planning career. God bless you.

A more detailed method is to add up the monthly expenses your family will incur after your death. Remember to include the one-time expenses at death and the ongoing expenses, such as a mortgage or school bills. Take the ongoing expenses and divide by .07. That indicates you'll want a lump sum of money earning approximately 7% each year to pay those ongoing expenses. Add to that amount any money you'll need to cover one-time expenses, and you'll have a rough estimate of the amount of life insurance you need.
Nice write up. I personally have been able to save with an independent agent. A big concern of mine was finding an agent that worked with more reputable insurance carriers. There seems to be alot of agents who will use non-standard insurance carriers to provide cheaper coverage. I've heard some horror stories about customer service, sub-par adjustments, and claims services. I'd definitely do alot of research into the insurance companies the independent agent is appointed with.

Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies, are regulated as insurance, and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.
I am looking at it all from the perspective of an inheritance. In my line of work, I see pensions and IRA’s taken by healthcare and Medicaid all the time. Heirs are left with nothing and it is sad. Im researching and researching but cannot find something that is safe enough, can grow to at least $100,000 for thirty so years, and cannot be taken touched aside from….life insurance. I have elderly grandfathers who left their families w/ something because of life insurance. My veteran grandfathers
Insurance Journal Co Aurora CO 80015

"Flexible death benefit" means the policy owner can choose to decrease the death benefit. The death benefit can also be increased by the policy owner, usually requiring new underwriting. Another feature of flexible death benefit is the ability to choose option A or option B death benefits and to change those options over the course of the life of the insured. Option A is often referred to as a "level death benefit"; death benefits remain level for the life of the insured, and premiums are lower than policies with Option B death benefits, which pay the policy's cash value—i.e., a face amount plus earnings/interest. If the cash value grows over time, the death benefits do too. If the cash value declines, the death benefit also declines. Option B policies normally feature higher premiums than option A policies.
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.
Did someone say convenient? Life can be complicated, which is why we make insurance so easy. Our customer service is accessible and personal. You can choose from different payment options, and you’re able to manage your account online for anytime, anywhere access. Just in case you want to view your policy at 2 a.m. while on vacation. Not that you would, but you could.

Insurance Rider Co Aurora 80015


Virtually every state mandates that insurance agents and brokers meet licensing requirements, which normally entails the successful completion of a written examination. Prelicensing educational requirements may also apply, which can vary depending on the state and license type. Separate licenses are necessary for each line of insurance, including Life and Health and Property and Casualty. In addition, agents and brokers may have to meet ongoing continuing education requirements to maintain their licenses.

With whole life insurance, you can’t just decide to stop paying premiums. Well, you can, but if you do then the policy lapses and you’re forced to withdraw the cash value, which will subject you to taxes and possibly a surrender charge. And if you haven’t had the policy in place for multiple decades, you will also be left with meager, and possibly negative, returns.
Maximum-funding a corporate owned UL policy only long enough that it can go on premium offset, where the policy returns are enough to pay the premium indefinitely, can be attractive as well. The internal rate of return on such policies inside corporations can make a corporate UL an alternative to fixed income in an era where yield is sparse. Again, not for everyone, but there are applications out there for those with significant estates.
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.
Premiums paid by the policy owner are normally not deductible for federal and state income tax purposes, and proceeds paid by the insurer upon the death of the insured are not included in gross income for federal and state income tax purposes.[28] However, if the proceeds are included in the "estate" of the deceased, it is likely they will be subject to federal and state estate and inheritance tax.
My parents had been paying into a whole life policy for many years and did not pay much attention to the cash balance over that time. When they finally had evaluated what they had in the policy, they discovered the ‘cost of insurance’ on the now older policy had increased so much that the premium they had been paying no longer covered the costs of the policy and the balance needed was being withdrawn FROM THEIR CASH VALUE. Needless to say, the insurance company or their agent did not notify them of this, so a policy that they had paid $75,000 into had a cash value of just $12,000 and was actually decreasing in value. Whole life policies are advertised as you paying the same premium amount for the entire life of the policy, but in the small print they are apparently allowed to adjust for the ‘cost of insurance’. It’s a brilliant scam. Pay attention to the policies you have.
Brokers are licensed by the state or states in which they operate, and they are required to represent their clients’ best interests. This duty helps to ensure that a broker will steer clients to the best insurance for them, rather than to a particular company or to a specific policy. Brokers rely on repeat business from their clients, which also motivates them to make sure that their clients have the best possible coverage. In many cases, brokers may receive an additional commission if you renew your insurance plan — giving brokers an extra incentive to make sure that you have optimal coverage and that you are satisfied with your policies.
You can access all your personally identifiable information that we collect and maintain online by calling us at 1.800.670.3213 or emailing us at customercare@selectquote.com. This will give you the opportunity to review your personally identifiable information or update us on a correction that needs to be made. To protect your privacy and security, we will also take reasonable steps to verify your identity before granting access or making corrections. We use this procedure to better safeguard your information.
Unlike GEICO, Esurance, and other “direct writers”, independent agents are a part of your community and are there to help whenever you need it. Unlike American Family Insurance, Farmers Insurance, State Farm Insurance, and other “captive” agents, an independent insurance agent works with many different insurance companies. Atlas agents automatically compare quotes from up to 50, which saves you time & money.
I read the comments about the topic of my article and I see that some responses touch on the "middleman" in ways that suggest some things about those who reside "in the middle." One plus for us "middle" people is that we get to hear things from carriers that those on the retail buying end may not ever hear. Sometimes, when dealing with us "middle" people, you get a behind the scenes look at things that may have a bearing on your coverage. With life insurance through a broker vs an agent, you get to know that impaired risk underwriting (for unhealthy applicants) has a particular kind of nuance. For instance, carriers may decline your application because they take on a set number of impaired risk clients, and then they decline those coming after that. You might think, after being declined, that what they are telling you is "you are done, no life insurance for you." But, what I know from experience is that another carrier or two have not hit the limit yet on declines - and that might be the avenue of approach to get you approved. As a broker, I know things that apply across a broad spectrum of carriers, not just the playbook of one carrier. As a result, the market intelligence of this "middleman" can improve the experience of buyers by finding a way forward for them that is outside the boundary of what a retail buyer might ever know. One thing that I did not mention in the article is that I have been both a captive and a broker, and the experience allows me to see the pluses and minuses in both. Thank you for your responses, and if you have a question about insurance of any type (my specialties are life, Health, Disability, and Annuities) you may post it at MoneyTips.com and let the professional community respond to it. It's free, harmless, informative, relatively instant, and a bunch of other good things, too.
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.

Like most small business owners, you probably purchase your insurance policies through an insurance agent or broker. The functions performed by insurance agents are similar, but not identical, to those performed by brokers. This article will explain how they differ. It will also explain how agents and brokers make money from the premiums you pay your insurers. Except where noted, the following discussion applies to agents and brokers selling property/casualty insurance.
Nice write up. I personally have been able to save with an independent agent. A big concern of mine was finding an agent that worked with more reputable insurance carriers. There seems to be alot of agents who will use non-standard insurance carriers to provide cheaper coverage. I've heard some horror stories about customer service, sub-par adjustments, and claims services. I'd definitely do alot of research into the insurance companies the independent agent is appointed with.
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.
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.
I only read the first couple of paragraphs here but so far what you are talking about is universal insurance, not whole life. Whole life builds cash value but the policy holder doesn’t get that money….they can take it out on a loan but they have to pay it back with a small interest rate…the cash value a whole life policy collects is what keeps the policy going and it is why they are able to pay out everything they promised you. No one anywhere ever would say hey how about you pay me ten dollars and I will give you twenty in a week….the whole life policy builds up cash value and between that and your premiums they are able to make the money to cover the whole cost. Term life is exactly what its name says…it only last for a term and will be terminated within a set period of time (usually like 20 years) so when you buy it at 20 and live till 50 you don’t get the money you just paid almost 2,000 a year for nothing….but whole life has to pay out it covers you for your whole life. The reason that the term is so much cheaper is that statistically the person will not die in that set time so they are able to make money off the people who don’t die to cover the select few that do and when you are 50 trying to buy term it is crazy expensive. Everyone has their own opinions and I understand that I am just 99% sure that you are talking about universal insurance which is a mix of term and whole and will soon be illegal because of how shady it is.
Nick this was a terrific overview. You didn’t mention the whole life rip-off, i.e., that the Client is paying for 2 things but in the end only gets 1. If the insured dies the death benefit goes to the beneficiary, the cash goes back to the company. Conversely, if the Client takes the cask the contract is terminated and the death benefit is gone. Bad, bad, bad!
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.
Thanks Jason! Your question is a good one, and the truth is that it really depends on the specifics of your situation. What are your college savings goals? What does the policy look like now? What is it expected to look like when you need the money? What other funds do you already have in place? I’m not asking you to answer those questions here, just want to give you a sense of the kinds of things I would consider.
The primary purpose of life insurance is to protect the people who are financially dependent upon you. Once those people are no longer dependent upon you (e.g. your kids grow up), you no longer have the need for that protection. Term life insurance is like having car insurance for as long as you own a car. Whole life insurance is like having car insurance forever, even when you no longer own a car.

Between 7/1/15 and 9/30/15, the average estimated savings off MSRP presented by TrueCar Certified Dealers to users of TrueCar powered websites, based on users who configured virtual vehicles and who TrueCar identified as purchasing a new vehicle of the same make and model listed on the certificate from a Certified Dealer as of 10/31/2015, was $3,279. Your actual savings may vary based on multiple factors including the vehicle you select, region, dealer, and applicable vehicle specific manufacturer incentives which are subject to change.  The Farmers Car Shopping Service website is owned and operated by TrueCar, which is not affiliated with any of the companies comprising the Farmers Insurance Group of Companies.

Insurance Comparison

×