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WHOLE LIFE SUCKS!

Is a Whole Life Insurance Policy a Good Investment? nope!  and it pays me so much more!





There’s a lot of conflicting information on life insurance. here's One of the most frequent questions agents encounter , "is a whole life policy a good investment?" The answer may surprise you and leave you just as confused.



The first thing insurance buyers need to understand is, “What is whole life?”



Life insurance markets used to be fairly simply. Today, however, insurance companies offer a wide range of products and policies tailored to individual needs and financial goals. Term life is a traditional life insurance product that has a defined period of validity — or term — during which a death benefit may be paid.

On the other hand, whole life policies generally refer to a group of products that pay a permanent death benefit, but also accrue cash value over time.

Whole life policies may earn interest, be diversified in portfolios, and have loan and early withdrawal options. They are often considered an investment product and a life insurance policy in one. Typically, they cost more than common term insurance and owners may choose to pay in additional funds up to a certain cap. But, is a whole life policy a good investment?  Based on the internal costs of these policies and the ultr-low investment returns assumed--NO, NEVER!

Whole Life vs. Savings Accounts or Certificates of Deposit

Some financial planners compare whole life policies to traditional savings accounts with restrictions on withdrawals, money markets, or long-term CDs. While whole life policies earn interest, they do so at much lower rates than true investment products.

If you’re looking for a high rate of return, then a whole life policy would not be the best investment option. However, if you prefer long-term stability with a minimal return plus the added protection of a secure death benefit, then your whole life insurance policy may be a good choice.

If your primary concern is passing the investment on to beneficiaries, then a whole life policy has several advantages over savings accounts:

  • Growth is non-taxable
  • Interest generally accrues more quickly
  • Tax liabilities are reduced

Whether you’re starting a policy on payments, or have a sum to invest with beneficiaries in mind, then whole life can provide a moderate investment option against traditional savings and CDs. Again, is a whole life insurance policy a good investment? NO!  it's GREAT investment if you need the life insurance for LONG Time, but even then you need to look at your overall financial plan.

I Want to Use Whole Life as a Retirement Tool-But,is a whole life policy a good investment? only if you want to pay me a fat commission!


Again, your primary goal will decide whether whole life can provide an effective investment for your financial needs. Many experts decry whole life as a true investment because of the high costs and lack of liquidity. However, if you’re young and have a steady career income, leveraging a whole life policy for retirement can be an effective strategy that pays off.

It can take twenty years for returns in a whole life policy to offset the front-end costs, so a person purchasing a policy at 35 could potentially reap the benefits during early retirement years. In such a circumstance, the policy could be considered a successful investment vehicle.

Whole life may also provide an option when the owner is already making maximum contributions to other retirement investments like an IRA or 401(k). On the down side, however, life insurance can have tax pitfalls and be costly without permanent income.

Make Whole Life Part of a Well-developed Investment Plan-- as an investment, whole life sucks!

Most financial planners and experts agree on one thing in relation to whole life plans: They can be a good investment when combined with other financial products.

Solid financial planning begins with incorporating a wide range of products and investments in your portfolio. When whole life policies are added to stocks, retirement accounts, savings, and other investments, they account for the strongest long-term strategy and still provide a reliable death benefit.

If you’re considering a whole life policy as an investment strategy, do your research and speak to an agent. Like any financial product, there is no simple answer and whether it turns out to be a good investment depends on your individual needs and situation. In the end, only you can answer this question--"is a whole life policy a good investment?".  Don't let the agent convince you it is until you've done extensive research and understand your own reasons why you would consider this type of life insurance policy!  Also, make sure you know how much life insurance you actually need.  Start there and the numbers will surprise you!



is whole life a good investment
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If you need an insurance professional who knows the industry, listens to your needs and works hard for you, Chris is your man.

If you need an insurance professional who knows the industry, listens to your needs and works hard for you, Chris is your man.

We have trusted Chris with all our insurance needs for several years. He always listens and understands our needs completely and then works hard to design a policy that best fits our needs. He is very personable and easy to work with.

Sanjeev Dharap Architect, Entrepreneur, Technical Advisor
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Expert Advice and Honesty

Chris brings expert advice and honesty to every project we work on. He gets things done in a timely manner and does an excellent job following up.

Brad Branson Partner/Investment Adviser- Cornerstone Capital, Inc
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Didn't Try To Upsell Me!

I found Chris when looking for life insurance brokers. I knew exactly what I wanted and told Chris and he was able to deliver without trying to upsell me on something else. It was very straightforward and exactly how I hoped it would be. I would definitely recommend him for anyone in a similar scenario.

Nathan Netravali Associate Director of Clinical Applications at Think Surgical
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CB Acker Associates Is Extremely Responsive

Chris provided (and continues to provide) excellent service and support for our insurance needs. He is very responsive, knowledgeable and provides specific and efficient solutions to our insurance needs. I highly recommend Chris!

Antonio Altamirano Founder, CEO at Tangelo

Cheap Term Insurance

So, Your Cheap Term Life Insurance Premium Is About To Go Up 10x At Your Renewal.  Now What? 

 

Level premium term life insurance policies ideally last as long as principal financial obligations, such as a mortgage or the costs of raising children remain. But sometimes things don’t work out that way.

 

If your term life insurance policy is ending, you may still need life insurance protection if you:

  • Have house payments
  • Owe other major debts
  • Have children who are still dependent on you
  • Have a partner who depends on your income
  • Want to leave money to your heirs through life insurance.

If you fit one or more of these categories, there are a few options to consider.

Buy Another Term Life Insurance Policy

 

 

If you still have obligations like mortgage payments or dependents, the best option for most reasonably healthy people is to buy another term life policy. You might have to pay a higher price now that you’re older, but buying a shorter term — such as 5 or 10 years rather than 20 — will help lower the cost.

Shopping around can also pay off. Even if your former insurer offered the best deal when you were searching for your previous policy, another carrier could have the better price this time.

Keep in mind that you’ll probably have to answer health questions and take a life insurance medical exam during the application process. 

 

Take Your Term Life Policy Year By Year 

 

Rather than buying a new term life policy for five or more years, you could opt for annual renewable term life insurance, where you decide each year whether to continue coverage. This may be a good choice if you anticipate only a few more years of major financial obligations. The main drawback is that rates can jump quite a bit each year, making a “level term” policy a better choice for needs that last at least five years, although the most common policy term period is 20 years.  Very few companies these days offer five year term life policies.  Even fewer companies offer annually renewable term insurance policies these days.

As an alternative, ask your agent if you can extend your current term policy one year at a time. This would let you avoid a new medical exam, but the price jump will be HUGE! It's not uncommon for the next premium after the level period expires to be more than 5X the current premium.  Most people can't afford those premiums, however, this could also be an option for people with terminal medical conditions who need life insurance at any cost and plan to maintain coverage for only a couple more years.

Convert Your Term Policy To Permanent Life Insurance

Although term life insurance is best for most people, permanent life insurance has certain advantages. Permanent life insurance, as the name implies, lasts the rest of your life. But it also costs much more than term life. Types of permanent policies include whole life and various forms of universal life, including variable life and indexed universal life.

If you still need coverage after your term life policy expires, your carrier may offer the option to convert it to a permanent life insurance policy — without taking a new medical exam or answering health questions again. You may be able to convert only a portion of the death benefit, however, meaning you’d have a lower benefit once the term policy ended.

If your term life policy allows conversion, there will be a deadline for conversion that’s before the end of the policy. There’s also typically an age cutoff for converting, usually age 70, depending on the insurance company. The new permanent life premiums get higher every year you wait to convert. Converting only a portion of the coverage amount to a permanent policy can save some money.

Buy A New Permanent Life Insurance Policy

If you decide you want to buy permanent life insurance, converting your term policy may seem like the most convenient way to do it. But if you’re still in good health, it might not be the cheapest route. Be sure to get quotes for a new permanent life insurance policy, too.

Most people who still need life insurance coverage are best off buying a new term life insurance policy. If you’re one of the exceptions, you may want to consult a financial advisor.

 

level premium term insurance increases premium
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If you need an insurance professional who knows the industry, listens to your needs and works hard for you, Chris is your man.

If you need an insurance professional who knows the industry, listens to your needs and works hard for you, Chris is your man.

We have trusted Chris with all our insurance needs for several years. He always listens and understands our needs completely and then works hard to design a policy that best fits our needs. He is very personable and easy to work with.

Sanjeev Dharap Architect, Entrepreneur, Technical Advisor
profile-pic

Expert Advice and Honesty

Chris brings expert advice and honesty to every project we work on. He gets things done in a timely manner and does an excellent job following up.

Brad Branson Partner/Investment Adviser- Cornerstone Capital, Inc
profile-pic

Didn't Try To Upsell Me!

I found Chris when looking for life insurance brokers. I knew exactly what I wanted and told Chris and he was able to deliver without trying to upsell me on something else. It was very straightforward and exactly how I hoped it would be. I would definitely recommend him for anyone in a similar scenario.

Nathan Netravali Associate Director of Clinical Applications at Think Surgical
profile-pic

CB Acker Associates Is Extremely Responsive

Chris provided (and continues to provide) excellent service and support for our insurance needs. He is very responsive, knowledgeable and provides specific and efficient solutions to our insurance needs. I highly recommend Chris!

Antonio Altamirano Founder, CEO at Tangelo

if you've worked with us we encourage you to share your thoughts on our process.  what went well for you?  please take a moment to share your thoughts so we can improve our service!

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