Since nobody has said this yet, I will... whole life policies are a rip-off. They were dreamed up by insurance companies, as a way for them to give you "peace of mind" while they invest your money and keep most of the profit(*).

As was mentioned earlier, whole life policies might gain around 4% depending on the company and package you choose. That is quote low, in terms of investing goes. Almost anyone could make more than that, on a long-term investment fund. My recommendation is to buy a 20- or 30-year term policy, which will probably cost you less per month than one tank of gas. Meanwhile, take what you would have plugged into a whole life policy, but invest it in a mutual fund instead. That way you will have the insurance benefit of a payout in the case of your untimely death, while keeping a high return on your cash investment. Just my three pennies...

Hmmm. The plot thickens.

So let me see if I got this straight:

Term: More affordable, fixed length of time, premiums fixed for term but typically increase upon renewal, no accumulation of "cash value", if insured survives term then you get nothing and like it.

Whole life: Noticably more expensive, fixed premiums for life, accumilates "cash value" that can be used for borrowing, benifet paid is face value of policy but the remainder of the "value" goes into deep pockets

Close????

How does this affect the face value of the policy? Say for example I have a $100k whole life policy. At age 59 my lip begins to fall off due to chewing tobbaco. We need some cash so we withdrawl $10k for whatever. I die a year later. Is the benefit then $99k?

How about for non-medical scenarios. At 59 my lip is fine but I really want a Corvette. Can funds be withdrawn for that?


This appears to be a combination of both types of policies. When our buddy came over and whent through his spcheel, this type was not mentioned at all. I'm going to have to do some additional research on Universal Life.

I work for one of the major insurance companies (like a good neighbor) and the UL with option 2 (variable) cuz the money is rolled back over into the death benefit is a good policy for you because after the first year you can decide to pay in more or less depending on how your finances are. You can do a withdrawal of cash value or do a loan against the policy. And just for the record- on a whole life policy you would not just get the face amount of the death benefit you would get the dividends built up. You could also set up the dividends to increase coverage (called paid up additions). While you are young your premiums wouldn't cost that much.

Scalding hot. Term insurance is like a renting a mansion for almost nothing. It'* great while you have it, but the downside is that it'* gone when your "term" is up. However, that term is when you can be working on building your other investments. That is my plan anyway.