First, there are your regular whole life policies that are non-{articipating and then there are those that are Participating. Participating policices earn dividends which is called a “return of premium” however with that dividend it purchases more insurance and the coverage keeps going on as long as a dividend is paid, the more coverage the more dividend, the more dividend the more coverage etc. After 25-30 years a person can stop paying for the policy and take reduced paid up insurance and keep the insurance enforced for the rest of their lives without paying a single cent. This is one of the features I absolutely love about participating whole life.
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MetLife Auto & Home is a brand of Metropolitan Property and Casualty Insurance Company and its affiliates: Economy Fire & Casualty Company, Economy Premier Assurance Company, Economy Preferred Insurance Company, Metropolitan Casualty Insurance Company, Metropolitan Direct Property and Casualty Insurance Company (CA Certificate of Authority: 6730; Warwick, RI), Metropolitan General Insurance Company, Metropolitan Group Property and Casualty Insurance Company (CA COA: 6393; Warwick, RI), and Metropolitan Lloyds Insurance Company of Texas, all with administrative home offices in Warwick, RI. Coverage, rates, discounts, and policy features vary by state and product, and are available in most states to those who qualify. Policies have exclusions, limitations, and terms under which the policy may be continued in force or discontinued. For costs and complete details of coverage, contact your local MetLife Auto & Home representative or the company.  
I’m glad those policies worked out for you, and I agree that the simple act of saving money is more important than the specific investments you choose, especially at the beginning. With that said, it’s also a good idea to invest that money as efficiently as possible and I do not think that whole life insurance provides that efficiency for the vast majority of people.

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]


Hey Jordan. I was a little dismissive in my last reply, and I want to apologize for that. You’re absolutely right that the main reason for getting life insurance is often to make sure that your kids would have enough money even if you weren’t around, and it’s honestly great that you’re already thinking that far ahead. It bodes well for you and your family. 

Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.

Second, I would say that it’s debatable whether whole life insurance is actually better than a savings account or CD, in terms of a savings vehicle. You mention the guaranteed return. Well, as I mention in the post, my policy had a “4% guaranteed return”, but when I ran the numbers it only actually amounted to 0.74% event after 40 years. It was less before that. And this was from one of the top mutual life insurers in the country. Not only is that incredibly misleading (and that’s being kind), I can get a better guaranteed rate than that right now from an online savings account, even though interest rates are at an all-time low. And my online savings account doesn’t have any of the other huge drawbacks that are also mentioned in the article.
I have calculated a ~4% average annual ROR if the policy is kept for at least 20 years. This is not an IRR as an IRR gives no credit for the value of the death protection. This assumes the current dividend scale and can be defined as essentially the interest rate that accumulates the premiums, less an estimate of the value of the death protection each year, to the policy’s cash surrender value at the end of the period studied. It attempts to answer the question, “What interest rate would I have to earn on an outside investment of the extra premiums for WL to do as well as investing those extra premiums, in the WL policy?” consumerfed.org is a great resource for this analysis and other literature on this subject.
In fact, he sort of torpedoes his argument by saying policy loans are legit, with the implication being policyholders are going to get into trouble if they don’t understand how to use policy loans. …but people already get into trouble by not being financially responsible so…again…nothing new. The problem isn’t borrowing or insurance. It’s financial education.
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. 

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You do write that “some of our top clients who are in a tax bracket that you nor I will ever see” enjoy the benefits of whole life. As I say in the post, there is a small percent of the population with a very large amount of money that can benefit from whole life. That is not who I’m writing for here. For 98% of the population, it is not a useful tool.
Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary home insurance policies do not cover earthquake damage. Earthquake insurance policies generally feature a high deductible. Rates depend on location and hence the likelihood of an earthquake, as well as the construction of the home.
It depends on the type of policy and the agent’s contract level with the insurance company. A Medicare insurance broker may have different commission levels with different insurance companies as well. A large Medicare insurance broker who has been in the market for a number of years is not likely to care about small differences. Here at Boomer Benefits, we enroll our clients in the insurance plan that is right for them regardless.
From a pure insurance standpoint, whole life is generally not a useful product. It is MUCH more expensive than term (often 10-12 times as expensive), and most people don’t need coverage for their entire life. The primary purpose of life insurance is to ensure that your children have the financial resources they need to get themselves to the point where they can provide for themselves, so coverage that lasts your entire life doesn’t make a lot of sense except for a minority of cases that are the subject of another discussion.
Whole life is insurance not an investment. You buy it so the day you pass on your family will have money to ease their grieving by giving them time off, financial security, and most importantly for whole life insurance to pay the cost of your funeral, etc. It can mean a lot to people to have a nice funeral for their loved one as a proper send off. I view whole life as a product, like my house, which I also don’t view as an investment.
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It is not a valid argument to me to say that the “administrative pain in the ass” is a reason to ignore the tactic. It’s a pretty simple procedure and certainly not worth paying all the extra costs of a whole life approach just to avoid. Yes, you have to be careful if you have Traditional IRAs, but there are ways around that too. No, it’s not for everyone, but I would much rather try to make the backdoor Roth work first than immediately jump to whole life.
It’s a great point about the cost causing people to be underinsured. I have no idea if there are any statistics on that, but intuitively it would seem to make sense. It’s a shame if someone with a real need for life insurance is under-protected because a salesman could make a bigger commission off the more expensive product. But I’m sure it happens. 

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!

4The monthly rate shown is for Preferred Elite based on a Male, age 37, and a 20-year level term period. Terms and limitations will apply. Rates shown are monthly as of January 1, 2018. Allstate TrueFit® is a term life insurance to age 95 policy issued by Allstate Assurance Company, 3075 Sanders Rd., Northbrook IL 60062 and is available in most states with contract/series ICC14AC1/ AC14-1. In New York, issued by Allstate Life Insurance Company of New York, Hauppauge, NY with contract/series NYLU818. The premiums will be the same for the level term period selected. Beginning with the anniversary following the level term period, the company reserves the right to change premium rates each policy year, but rates cannot be more than the maximum guaranteed amounts stated in the policy.
To say a life insurance company is not a diversified portfolio is a hard statement to agree with. Life insurance companies own 18% of the corporate bonds issued in the United States. These a multi-billion dollar diversified portfolio’s of fixed income securities WITH NO INTEREST RATE Risk. It is true that it takes time to accumulate cash value, however, there isn’t a passive investment strategy that doesn’t take time to create wealth.
The first is that, as you say, no one invests all their money at the beginning of the period and cashes out at the end. Usually you invest some at the beginning and more at various points along the way. For example, someone who contributes part of their monthly paycheck. And since the stock market generally goes up, that means that you will inherently get lower returns than if you had invested all of your money at the beginning, simply because some of your money will not have been invested for the entire ride.
Response 1: This has to be the most common objection. I understand it, but I don’t totally agree with it, so please give it a LOT of thought and decide for yourself. Let’s begin with the idea that insurance is not an investment. That is false. It is absolutely an investment. You spend money in expectation of a financial return, the size of which is usually known but the probability of which is oftentimes unknown (because many people cancel term policies or cannot renew them before they pass away).

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A broker will help his or her clients identify their individual, family, business or organization liability risks. With this information, a client can make an informed decision about what type of insurance is necessary and how much insurance protection to purchase. A broker can guide clients on these decisions, and provide a range of quotes based on the client’s needs. This includes explaining the terms and conditions and benefits and exclusions for a number of competing insurance policies. Armed with this information, clients can find the most appropriate insurance purchase for their liability needs and budget. Some brokers may even be able to negotiate lower rates for their clients based on their history as an insured and the amount of insurance that they are purchasing. For example, a broker working with a company to obtain workers’ compensation insurance can first assess the type and level of coverage needed (which may be determined in part by state law). The broker can then provide a range of options from a number of insurers, and help the business pick the policy that provides the most coverage at the best price. Over time, the broker can gather and present information to the insurer to demonstrate that the company should be eligible for a lower rate, perhaps because the business’ workplace safety initiatives have lowered the number of workers’ compensation claims made against the policy. In this manner, a broker can help a client reduce its premium cost.
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.

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True, but what’s not accounted for is the rolling geometric average. Trailing returns only assume you invest at the beginning of a period and hold to the end. The rolling average (if done correctly) assumes you invest over time…say monthly…like almost everyone does. I remember reading several pieces by Dan Wiener (who is an advocate for index fund investing, and specifically Vanguard) mention this.
I’m honestly not 100% sure about this, but I haven’t heard of someone paying more in premiums than they get in death benefit. With a whole life policy, there will typically there will be a point at which the cash value is sufficient to pay the premiums itself, though when that might occur is a big question market. Also, in the illustrations I’ve seen the death benefit itself will also increase as the cash value increases.

Alternatively, you could purchase a whole life policy that will not only pay that policy face value if you should die before your children are through college, but would accrue a cash value that would provide additional benefits to your family or a growing fund of emergency money. You could also consider converting portions of your term life policy over to whole life insurance over time to build a cash portfolio for your retirement as you age.
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.
So let’s do a quick comparison. Let’s take that $527 annual premium and invest it instead. From 1963 to 2013, the US stock market earned a 10.22% annual return (source), but let’s assume that this person also put some money into bonds (smart) and earned a more conservative 8% annual return. Over those 50 years, at that 8% return, that money would have grown to $327,231. I don’t know about you, but I would rather have my money that way than locked inside a whole life insurance policy.
Hi, Matt. My parents are actually talking to an agent to get the whole life insurance and their premium monthly is about $1000 so which makes them to pay $120000 (since it’s the 10 yr plan) and the agent presented that the guaranteed value will be $250000. I have very little knowledge about the whole life insurance plan but wouldn’t it be easier for them to just get it and be insured with that guaranteed value if they are not the type to find where to invest and all that? or is it something that they shouldn’t relay on.. they are doing it for more their retirement and asked me for help but i am very confused about this whole life plan. Thanks!
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.
Universal life insurance addresses the perceived disadvantages of whole life—namely that premiums and death benefits are fixed. With universal life, both the premiums and death benefit are flexible. With the exception of guaranteed-death-benefit universal life policies, universal life policies trade their greater flexibility off for fewer guarantees.
Looking to buy life insurance for the first time? If so, you're probably asking yourself questions, such as "How much do I need?," "What kind of policy is best?," and "Which company should I buy from?" There's no question that buying life insurance for the first time, like any other new experience, can be more than a bit daunting. Below are six important tips that we hope will make the process smoother by eliminating frustrating false starts and unnecessary bumps in the road.
With that said, yes the interest rates are good, but it’s not really appropriate to compare the interest rate on a whole life loan to interest rates from other sources. With whole life, you’re borrowing YOUR OWN money that you already contributed after-tax. That’s very different from borrowing from a bank, where the money was never yours. It’s much more appropriate to compare the long-term, cumulative interest rate to the long-term after-tax returns you could get from other investments. That comparison looks very different and often much less beneficial for whole life.
The comparison for defined contribution vs registered accounts is easier because you are dealing with account values which you can project with a fair degree of certainty, at least within ranges to which you can apply confidence intervals, to the degree market activity can be reliably subjected to statistics (point of contention: this is debatable…otherwise we wouldn’t have return years with standard deviations of 3+). You just project the accumulation and the withdrawal and see which one runs out of money first, then consider the non-financial issues already discussed above. Comparing defined benefit plans vs registered accounts is a little bit tougher. This is where you might want to bring in your accountant or actuary to do the math. They can provide you with the information you need to make the decision.
Thanks for the insightful article. I agree with the general statement that, in a vacuum, it is better to “buy term and invest the difference.” However, I’m interested to hear your thoughts on using whole life insurance as an investment vehicle in the context of the infinite banking model (assuming you are familiar with the concept). From what I understand, it sounds like a good way to achieve predictable and guarenteed growth on a compounded basis while allowing you to borrow money from your own policy and pay yourself the interest, all while always having access to the funds. I think it might be wise for people, like myself, are looking for guaranteed growth with little risk.
I recently reviewed my mother’s life insurance policy. Someone sold her a whole life policy with a 35K death benefit for $197.00 per month. She was 71 years old when she bought it! She brought it to my attention last month after being diagnosed with lung cancer, explaining she could no longer afford the payments. She requested I review/change the policy to pay less so she would have lower payments. Of course, no one will insure her now! My mother does not have a lot of money and I think the guy that sold it to her is a jerk as she already had a term policy – which she cancelled after buying this one. Is there an ethical recourse?
You have likely come across brokerage firms when shopping for insurance. Many buyers prefer working with these firms as most have established track records with staff that offer the experiences and resources you need to make an informed decision. With a brokerage firm available to guide you and answer all of your questions, you can gain a solid understanding of what terms and rates are being offered by various insurers. Of course, not all insurance brokers offer the same level of quality. Just like shopping for insurance, it is important to shop around to find an insurance broker who you can trust.

Stranger-originated life insurance or STOLI is a life insurance policy that is held or financed by a person who has no relationship to the insured person. Generally, the purpose of life insurance is to provide peace of mind by assuring that financial loss or hardship will be alleviated in the event of the insured person's death. STOLI has often been used as an investment technique whereby investors will encourage someone (usually an elderly person) to purchase life insurance and name the investors as the beneficiary of the policy. This undermines the primary purpose of life insurance, as the investors would incur no financial loss should the insured person die. In some jurisdictions, there are laws to discourage or prevent STOLI.

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None of the below should be taken as actionable advice. You should consult someone who you know and trust before making any important financial decisions. This is just a window into how I made my decision, so you can see some things I considered. I might be wrong about some of these things, but everything I’ve written below is what I believe today based on my current understanding and the guidance of my own advisers. Please note that I do also max out my 401k and IRAs and keep a modest taxable account as well, so whole life is just one piece (albeit a fairly sizable one) of my portfolio. 
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First, there are your regular whole life policies that are non-{articipating and then there are those that are Participating. Participating policices earn dividends which is called a “return of premium” however with that dividend it purchases more insurance and the coverage keeps going on as long as a dividend is paid, the more coverage the more dividend, the more dividend the more coverage etc. After 25-30 years a person can stop paying for the policy and take reduced paid up insurance and keep the insurance enforced for the rest of their lives without paying a single cent. This is one of the features I absolutely love about participating whole life.
Analysis: When a broker says that, it means another broker has made a submission to the insurer in your name. That’s most likely the incumbent broker. In fact, the incumbent may have submitted your name to 10 insurers — often, without your approval or even your knowledge. This is a disguise. The incumbent appears to be shopping for a better deal on your behalf, while the actual motive is to freeze out competitors.
Retrospectively rated insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
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.
I wish I did my research 6 years ago before getting a $2 Million Dollar NYLIFE Whole Life policy. I was paying $1,000/month into it and 2 years ago lowered it to a 1.5M policy and was paying $500/month. In total my Cost Basis is $55K and my Cash Value is just $24k. A LOSS of over $30K! **CRINGE** And there is nothing I can do about it so I’m going to cash out and put towards my existing index funds. This $h!t should be ILLEGAL! My research shows that the insurance agent ate up 90% of my monthly premiums for the first couple years. Family/friends referred him for this ‘Investment’. He ate up all their premiums as well even though their policies were lower than mine. He passed away last year at the age of 60 due to a heart attack. Karma?
Good questions. The honest answer is that the only way to know what’s best is to do a review of your personal goals, the policy you have now, the whole life policy you would be changing it to, and the other options available to you. I would highly recommend seeking out a fee-only financial planner who can help you with this, and I would start by looking at the Garrett Planning Network. Their advisors all offer hourly services that would be perfect for this kind of project. NAPFA is another great network of fee-only planners.
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?
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

Well, first of all, I know nothing about how things work in Canada so I’m definitely not qualified to advise you on this. Given the same situation in the US though, I would say that it’s something you could consider. I would just make sure that you work with a fee-only financial planner who specializes in this kind of thing, can evaluate all of your options in the context of your specific goals, and, if this ends up being a good option, can help you find a policy specifically structured to minimize costs and maximize growth. That’s really the only way I would consider it.
Second, when it comes to investing, my experience shows that most insurance companies charge MUCH higher fees than are necessary. And since cost is quite possibly the most important factor when it comes to investing, that matters a lot. I would much rather see people using a simple, low-cost index investing strategy that’s both easy to implement and backed by all the best research we have as the most likely route to success.

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James, be very careful about blanket advice to roll your pension into an IRA. A lot of financial professionals can make money through a transaction like that and you’d likely be giving up guaranteed income for the rest of your life. To be clear, it’s certainly possible that this would be a good move, but you would only know that after a careful and detailed analysis of your specific pension, your specific goals, and the rest of your financial situation.
Progressive Home Advantage® policies are placed through Progressive Specialty Insurance Agency, Inc. with affiliated and third-party insurers who are solely responsible for claims, and pay PSIA commission for policies sold. Prices, coverages, privacy policies, and PSIA's commission vary among these insurers. How you buy (phone, online, mobile, or independent agent/broker) determines which insurers are available to you. Click here for a list of the insurers or contact us for more information about PSIA's commission. Discounts not available in all states and situations.
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.
Good question Eski. I would encourage you to look into long-term disability insurance as a potentially more effective way to provide coverage for the exact risk you’re talking about. In general you’ll get better, more comprehensive coverage from a disability insurance policy that’s specifically designed for this than from a life insurance policy that includes it as a limited add-on.
According to the section 80C of the Income Tax Act, 1961 (of Indian penal code) premiums paid towards a valid life insurance policy can be exempted from the taxable income. Along with life insurance premium, section 80C allows exemption for other financial instruments such as Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Savings Certificate (NSC), health insurance premium are some of them. The total amount that can be exempted from the taxable income for section 80C is capped at a maximum of INR 150,000.[26] The exemptions are eligible for individuals (Indian citizens) or Hindu Undivided Family (HUF).
One point I would like to counter is the idea that whole life “is insurance that CANNOT BE TAKEN AWAY”. It can be taken away if you are not able to keep up with your premium payments, which is pretty common given that people’s lives and financial situations are constantly changing. With some policies, the premium can even go up depending on the performance of the policy, forcing you to pay more than expected if you want to keep the coverage in place. So it’s not quite as simple as saying that the death benefit is a sure thing.
A corollary to the liquidity issue is the concept of flexibility of your contributions. Even with a 401(k) or IRA, where you can’t access your money without penalty, you can always choose to stop contributing for a period of time if you need that money for other purposes. In the meantime, your account stays intact, steadily earning tax-deferred returns on the money you’ve already put in.

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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.
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Evaluating a policy that’s in place, and especially one that’s been in place as long as your husband’s, is much different than deciding whether or not to purchase a new policy. It might be that at this point, with all of the money already put in, it’s actually a good investment despite the ongoing cost. It’s hard to evaluate though, so if you’re really considering what to do I would think about talking to a professional. Ideally you should be able to find a financial planner who will charge you a flat rate to help evaluate the policy, without trying to sell you anything else. A planner who belongs either to NAPFA (http://www.napfa.org/) or the Garrett Planning Network (http://garrettplanningnetwork.com/) would probably be your best bet. Good luck!
First, you compare whole life as a retirement vehicle to a savings account or CD. I’ll get to whether or not it’s actually better than those vehicles next, but regardless that’s an improper comparison. When people save for retirement, they generally do so with things like stocks, bonds and real estate. Savings accounts and CDs are not very good long-term investment tools. So whether it’s better than those things for retirement or not, the point is irrelevant.
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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 have a AARP New York life policy . I began this policy in 2000 term life. My son-in law was working in insurance and told me whole life was better. I didn’t listen for about 5 years more . I then told them I wanted to borrow a certain amount they told me I hadn’t put enough in the policy as I had just changed to whole life a few months ago.they had also told me I couldn’t borrow on the term life anyway ! So I lost over ten years on permenent life
In fact, he sort of torpedoes his argument by saying policy loans are legit, with the implication being policyholders are going to get into trouble if they don’t understand how to use policy loans. …but people already get into trouble by not being financially responsible so…again…nothing new. The problem isn’t borrowing or insurance. It’s financial education.
In the 1980s and 1990s, the SOA 1975–80 Basic Select & Ultimate tables were the typical reference points, while the 2001 VBT and 2001 CSO tables were published more recently. As well as the basic parameters of age and gender, the newer tables include separate mortality tables for smokers and non-smokers, and the CSO tables include separate tables for preferred classes.[12]
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. The first known insurance contract dates from Genoa in 1347, and in the next century maritime insurance developed widely and premiums were intuitively varied with risks.[3] These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance.
In times of need, we stand by you. We’re here to make sure you have the right coverage for your needs. And should an accident occur, our claims service will be there to help when you need it most. If you’re comparing our quote or policy to another insurer, be sure to understand the value of the coverage you’re considering. Compare apples to apples. Make sure driver and vehicle information are the same. Our auto policy is the only one backed by an On Your Side promise.
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.
If someone really does want and need permanent insurance, and that may be especially relevant for those in Canada who own corporations, there are a variety of strategies to which the Minister of Finance is taking the axe for policies issued after January 1, 2017. As it stands now, the absurd inflation of surrender charges in the early years of a policy allow for a maximum funded LCOI (level cost of insurance) Universal Life policy to sock away a small fortune, tax-sheltered. That’s on the way out. But until it’s gone, there are some great applications that take advantage of a policy’s ability to pay out the investment portion of a policy tax free to a beneficiary upon the first death on a joint-last-to-die contract. That’s just one application…this is but one way insurance companies have adapted permanent insurance products to benefit the wealthy and there are many others, but these strategies tend to be offensive to the Canada Revenue Agency and as such their existence is always under threat. Life insurance companies tend to engage in games of cat and mouse in terms of finding and exploiting holes in the Income Tax Act in Canada, such as 10/8 policies or triple back to back arrangements, then the authorities shutter them. Rinse and repeat. This is probably not a bad thing…it exposes and then closes holes in the income taxa act. Frankly, the best use of an insurance policy is as INSURANCE. The death benefit is where the juice was always supposed to be. Not in engaging in elaborate tactics to skirt the rules. This is especially true as what is legal today may not necessarily be legal tomorrow. A lot of highly beneficial strategies amount to playing with fire.
Term life is a type of life insurance policy where premiums remain level for a specified period of time —generally for 10, 20 or 30 years. After the end of the level premium period, premiums will generally increase. Coverage continues as long as the premiums are paid. Perhaps this is an option you may want to consider when you’re on a more limited budget and will have significant expenses over a shorter period of time.
In his memoir “Am I Being Too Subtle?” Sam Zell, a billionaire investor and chairman of Equity International, writes, “I’m always on the lookout for anomalies or disruptions in an industry, in a market or in a particular company…. Any event or pattern out of the ordinary is like a beacon telling me some new interesting opportunity may be emerging.”
You’re right, there is a guaranteed portion of these policies. And like I say in the post, that guaranteed portion is nowhere near the illustrated return and is much less attractive than how it’s presented (e.g. a 4% “guaranteed” return is not actually anywhere near 4%). So to say that there’s a guarantee and somehow equate that to the numbers you presented earlier is, in my mind, misleading.
Good questions. The honest answer is that the only way to know what’s best is to do a review of your personal goals, the policy you have now, the whole life policy you would be changing it to, and the other options available to you. I would highly recommend seeking out a fee-only financial planner who can help you with this, and I would start by looking at the Garrett Planning Network. Their advisors all offer hourly services that would be perfect for this kind of project. NAPFA is another great network of fee-only planners.
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.
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Holly, I just turned seventy years old and retired and constantly looking and applying for jobs because my monthly income is only 1,206.00. I am divorce for only twenty eight years and have a learning disabled adult son who has never work. I need a life insurance policy to be around $30,000 to cover funeral expenses and some money for my son to cope. What life insurance company should I chose and should I chose term or whole life? I would greatly appreciate your response. I have no savings. Thank you. Diahann Cambridge

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