An Aldeer brother texted me asking me to post this. His computer acts crazy at times and won't let him log in but he can read the posts. He's trying to decide on term versus whole life insurance. He's asking for pros and cons. Here was my response.
I have 30 year term with Alfa. Term is the way to go. Even insurance people will tell you, if they are honest, that whole life only lines the pockets of the agent. It's sold as a "savings account" type of policy but it ultimately only pays a very small interest rate and is a terrible investment. If you took the amount you pay for whole over term and invest it consistently, you'll have a whole lot more money than you will off of the whole life "investment". I have a whole life policy also that I have had from probably close to 10 years. When I finally figured out how bad of an investment it really was, I tried to cancel it and get my money that was "saved" for me. They wouldn't let me. You have to let it sit for so many years before you can pull money out of it. That way they can make interest off of it rather than you. So, I just quit paying the premium and let the money saved pay it. The money has been paying the premium for about three years now. It will eventually run out and they will cancel the policy. I'll just have double coverage until that happens.
You really don't need to give advice about something you obviously know nothing about.
Wasn't giving advice to him. Just telling him what I have and three close friends of mine, that all sell whole life and term life insurance have told me about how the policies are set up and who really benefits. There are only two types of financial advisors that will tell you whole life is a good deal. 1) those that recognize the person they are talking to doesn't have the discipline to invest on their own, and 2) those that sell whole life. If you have it/own it and are happy with an average of 3% return, more power to you. I'll keep paying a fraction of the premium and investing the difference, get an average of 12% return.
