Analysis: You’ll likely get better services from outside specialists, but that’s not the overriding factor here. The real problem is that tying services to insurance products makes it disruptive for you to leave your broker. The products and services should be unbundled so that there’s real competition for the big-ticket item: the insurance itself.

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.


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.

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.
Often a commercial insured's liability insurance program consists of several layers. The first layer of insurance generally consists of primary insurance, which provides first dollar indemnity for judgments and settlements up to the limits of liability of the primary policy. Generally, primary insurance is subject to a deductible and obligates the insured to defend the insured against lawsuits, which is normally accomplished by assigning counsel to defend the insured. In many instances, a commercial insured may elect to self-insure. Above the primary insurance or self-insured retention, the insured may have one or more layers of excess insurance to provide coverage additional limits of indemnity protection. There are a variety of types of excess insurance, including "stand-alone" excess policies (policies that contain their own terms, conditions, and exclusions), "follow form" excess insurance (policies that follow the terms of the underlying policy except as specifically provided), and "umbrella" insurance policies (excess insurance that in some circumstances could provide coverage that is broader than the underlying insurance).[32]
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2. For people who have already maxed out all of their tax-deferred space and have a sizable investment portfolio built up, permanent insurance can potentially offer some diversification along with some benefits of tax-deferral. These people could invest in a permanent insurance product specifically designed to maximize the investment opportunity, which would include significant up-front contributions and a few other bells and whistles. These are not the run-of-the-mill whole life insurance policies sold by your local agent, and they are generally not right for people who don’t already have significant wealth.
Term assurance provides life insurance coverage for a specified term. The policy does not accumulate cash value. Term insurance is significantly less expensive than an equivalent permanent policy but will become higher with age. Policy holders can save to provide for increased term premiums or decrease insurance needs (by paying off debts or saving to provide for survivor needs).[25]
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.

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5The monthly rate shown is for Preferred Elite based on a Male, age 37. Whole Life Advantage® is a whole life insurance policy issued by Allstate Life Insurance Company, 3075 Sanders Rd, Northbrook IL 60062. Whole Life Advantage is available in most states with series LU11040 or form ICC12A1. In New York, issued by Allstate Life Insurance Company of New York, Hauppauge, NY, and is available with contract NYLU796.


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.

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Are you asking about people with terminal illnesses? If so, then I’ll admit that my knowledge in that particular area is limited. But my understanding is that a term policy would be very difficult if not impossible to find and there are some special kind of whole life policies you may be able to get. If that’s the situation you’re asking about, then it’s really not a whole life vs. IRA decision. It’s a decision on whether you should invest or whether you should insure. That’s a very different question than what’s being discussed in this article.

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The insurance agents at Boomer Benefits work full-time on Medicare-related insurance products. That means our agents are not distracted by trying to sell other specialty forms of insurance. Because of this, we feel confident that our staff members are among the most well-educated Medicare insurance brokers around. We are hands-down the best Medigap insurance broker that we can be.
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2)The lack of cash flow flexibility is troubling in that the largest assumption driving my analysis is that I am able to continue paying the premiums and keeping my policy current. If I want to take time off for travel (which is a near-term goal) or lose my job before this becomes self-funding, the policy can lapse and I would get only the cash surrender value at what is most likely a loss depending on timing
Defense Base Act (DBA) insurance provides coverage for civilian workers hired by the government to perform contracts outside the United States and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, foreign nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.

What you are telling people in this post is irresponsible and bad advice. You are correct that term is a lot cheaper than whole life, but you are leaving out the problems with term insurance that whole life policy can fix at any age. Did you know only 2% of term policies are ever paid a death benefit on? You can buy a 20 year term at age 30 but what happens when you turn 51? Buy more term at your current health at 51? What if you get cancer or other health problems that cause you to become uninsurable? Would you rather pay $100 a month for a $100,000 permanent policy and earn cash value, or would you rather pay $40 a month for 20 years on the same policy and then have to buy a new term policy at age 51 that will be $200-$300 a month and even then if you don’t die during that term then what do you have when your 80? Nothing, because no one is going to sale you life insurance at age 80. I don’t think buying term at a young age is a bad idea, but the longer you wait to transfer some of that to permanent insurance you are digging yourself and your family a deeper hole when you live past that term policy and have nothing to leave them with.
Universal life insurance (ULl) is a relatively new insurance product, intended to combine permanent insurance coverage with greater flexibility in premium payments, along with the potential for greater growth of cash values. There are several types of universal life insurance policies, including interest-sensitive (also known as "traditional fixed universal life insurance"), variable universal life (VUL), guaranteed death benefit, and has equity-indexed universal life insurance.
When comparing car insurance quotes, it helps to compare apples to apples; in other words, you want to be sure that the quotes you get are for identical - or at least very similar - auto insurance policies. Once you have a better idea of the type of coverage you’re looking for in a policy, this will be easy. To better understand coverage types start here
Thanks for reaching out Wanda. The answer really depends on the specifics of your policy, your personal goals, and your overall financial situation. To be completely honest, if you’re already 13 years in and continuing to pay the premiums isn’t too much of a burden, keeping the policy may actually be the best choice going forward. But the only way to know for sure is by doing a detailed review. That is something I could do for you, and if you’re interested you can email me at matt@momanddadmoney.com to get the conversation started.
Underfunded whole life insurance may have only performed 4%. However, designed with additional premiums they have actually earned closer to 7% in the 30 years from 1984-2013. Even during the period between 1977 and 1982 where interest rates shot through the roof and bond holders didn’t recapture their losses for several years, over funder whole life returned 35% after the cost of insurance is considered.
Thank you for all your articles…very insightful. My husband and I had a very similar situation as you and your wife when you first met with a “financial planner” (aka insurance salesman). Now, we look at having paid 8 years of adjustable comp life for our policies plus policies for both of our children (5 and 2). We feel like we made a mistake and, as you know, were swayed by the talk of retirement investment and “throwing money away”. So now, we wonder…should we go paid up on our policies, which would drop them both down substantially, but we no longer would have to pay into them (and get more term to cover the difference) and cancel our kids policies?
I have whole life that I’m not understanding . I’m under the understanding I pay $401 for 7 years I’m done paying on a &135,000 policy that they tell me the more I borrow from the more it grows.But I’m starting to question if the interested charged doesn’t go back to me how it’s it growing. I’m very confused suopose to sit down with agent so he can explain it better. But from talking to other insurance people like my house and car insurance agent he says this is not possible about it growing. HELP
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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5The monthly rate shown is for Preferred Elite based on a Male, age 37. Whole Life Advantage® is a whole life insurance policy issued by Allstate Life Insurance Company, 3075 Sanders Rd, Northbrook IL 60062. Whole Life Advantage is available in most states with series LU11040 or form ICC12A1. In New York, issued by Allstate Life Insurance Company of New York, Hauppauge, NY, and is available with contract NYLU796. 

The issue of diversification eludes to a level of risk. However, the history of paid dividends over 50+ years for the companies I reviewed demonstrated extremely low risk, with standard deviation on dividend of 1.5. This is extremely low risk. Of the companies I reviewed the 30 year history of dividend ranged between 5.4% (lowest) to 13.3% (highest) .
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.
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.
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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Mortgage life insurance insures a loan secured by real property and usually features a level premium amount for a declining policy face value because what is insured is the principal and interest outstanding on a mortgage that is constantly being reduced by mortgage payments. The face amount of the policy is always the amount of the principal and interest outstanding that are paid should the applicant die before the final installment is paid.
Now that you have a better picture of the difference between term and whole life policies, you probably want to compare term life versus whole life insurance costs. To do so, you will need to directly compare the short and long term costs of a whole life policy and a term policy, based on factors like your age, the face value of the policy you want to buy, and whether or not you are a smoker.

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