Is "whole life", permanent life insurance a good vehicle for saving money?

Posted on Jun 02, 2008 under Insurance Information |

13 Responses to “Is "whole life", permanent life insurance a good vehicle for saving money?”

  1. No. Life insurance policies yield less than stocks and bonds.

    If someone depends on your income, get term life insurance as long as they depend on it.

    To save for college, house, retirement, etc. I believe that index funds are best.

  2. dhc_hiker Says:

    Whole life is the absolute WORST vehicle for saving money. You are paying comissions thru the "wazoo".

  3. annierose Says:

    it is never good to combine insurance with savings. it is too difficult to see what you are paying for, andseparatees clients think they will get both the insurance and the savings, but usually it is only one.
    I agree with the person who answered first, term life insurance is the best product, and keep your savings seperate.

  4. thenameisthesame Says:

    Financial expert Suze Orman says that buying a whole life insurance policy is one of the worst financial decisions you can make. So, don't do it!

  5. There are actually several different permanent life insurance plans. Whole life is one, Universal Life is another and Variable Universal Life is yet another. Term life insurance makes sense for some situations, but permanent life insurance does make sense for others. I personally have both. Anyone that tells to buy one type of policy or another without reviewing your situation is no good. That includes Suze Orman.

  6. Financial Answer Guy Says:

    Rich is right, but he is too kind to Suzy Ormon. She is a FRAUD. Anyone who tells you to only buy term insurance is at best closed minded and unobjective and at worst, just trying to make an easy sale.

    Permanent life insurance can be an effective savings vehicle for LONG TERM investing, if and only if coverage is also needed. It would be a mistake to buy a permanent policy without needing the death benefit. For those who say it is too costly or not transparent enough, you haven't had a competent advisor explain it to you.

    Finding a financial planner is critical. Avoid anyone who makes a decision on what or how much you need without a thorough understanding of your financial situation. Run away from anyone who uses a "multiple of salary" approach in determining how much coverage you need. (Suzy does this too; ridiculously suggesting that you should have 20X your salary in coverage!!) Also be very skeptical of anyone who is employed by an insurance company (a career agent) as they may be unduly influenced to sell proprietary products.

    Good Luck.

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