Is this a good investment strategy?
Answers: Insurance is NEVER a virtuous investment strategy. If you wanted a excise deduction, a qualified retirement narrative would have be a better idea.
The brass surrender value (they other forget the surrender part) you may never get depending on if you own an option a or substitute b UL policy. Even then, it just goes to the beneficiary. Depending on your age, currency it out, get a possession policy, and invest the rest in something that will procure you better returns.
Life insurance premiums are not tax deductible to individuals. It is possible that they are deductible if the premiums are rewarded to insure key member of a business. No, life insurance premiums are not deductible.
Universal and Whole Life policies are deeply legal scam that prey on people who don't get the message compounding by marketing them as a way to build "lolly value". Life insurance is a tool to provide for your family if you die, not a instrument to save money.
If you invested your monthly premiums contained by a mutual fund instead, they would grow at 8-12% a year long-term, and return you FAR more money than a "cash value" policy.
To protect your relations, you can buy Term Life insurance for about 10% of the cost of "Whole Life"
Do the math: let's right to be heard you bought Whole Life for $300/month for the next thirty years; assuming you don't die, you will reward in (30 x 12 x $300)= $108,000, and find back conceivably $120,000 at the end. Woohoo! You made money, right?
But if you remunerated $30/month for a Term Life policy instead (and invested the other $270 in a growth mutual fund instead of contained by premiums), at the end of 30 years if you didn't die, you'd win NOTHING from the insurance (oh well!), and own about $450,000 contained by the mutual fund. And your family would still hold the death benefit lump sum within the event the unthinkable did happen.
Whole and Universal Life insurance newly pay terrific commissions to those who SELL them, that's what make them popular!
To those that answered buy Term and Invest the rest are clueless. Insurance is a vital piece of planning. First of all they use poor examples (ie $300/month for the adjectives life and $30 for the Term). You should not buy Insurance for the Cash Value it is in the main a Death Benefit. OH by the way it is also salaried to the beneficiary TAX FREE. Premiums are not tax deductible.
Life insurance is NEVER a perfect "investment" product. It's for people who are doomed to failure at math.
Run the numbers. You'll ALWAYS do better on your own. Life insurance - any kind - is a appropriate tool to plan for DEATH. Mutual funds, stocks, bonds, etc, are the tools to plan for LIFE, aka, investing.
Answers: Insurance is NEVER a virtuous investment strategy. If you wanted a excise deduction, a qualified retirement narrative would have be a better idea.
The brass surrender value (they other forget the surrender part) you may never get depending on if you own an option a or substitute b UL policy. Even then, it just goes to the beneficiary. Depending on your age, currency it out, get a possession policy, and invest the rest in something that will procure you better returns.
Life insurance premiums are not tax deductible to individuals. It is possible that they are deductible if the premiums are rewarded to insure key member of a business. No, life insurance premiums are not deductible.
Universal and Whole Life policies are deeply legal scam that prey on people who don't get the message compounding by marketing them as a way to build "lolly value". Life insurance is a tool to provide for your family if you die, not a instrument to save money.
If you invested your monthly premiums contained by a mutual fund instead, they would grow at 8-12% a year long-term, and return you FAR more money than a "cash value" policy.
To protect your relations, you can buy Term Life insurance for about 10% of the cost of "Whole Life"
Do the math: let's right to be heard you bought Whole Life for $300/month for the next thirty years; assuming you don't die, you will reward in (30 x 12 x $300)= $108,000, and find back conceivably $120,000 at the end. Woohoo! You made money, right?
But if you remunerated $30/month for a Term Life policy instead (and invested the other $270 in a growth mutual fund instead of contained by premiums), at the end of 30 years if you didn't die, you'd win NOTHING from the insurance (oh well!), and own about $450,000 contained by the mutual fund. And your family would still hold the death benefit lump sum within the event the unthinkable did happen.
Whole and Universal Life insurance newly pay terrific commissions to those who SELL them, that's what make them popular!
To those that answered buy Term and Invest the rest are clueless. Insurance is a vital piece of planning. First of all they use poor examples (ie $300/month for the adjectives life and $30 for the Term). You should not buy Insurance for the Cash Value it is in the main a Death Benefit. OH by the way it is also salaried to the beneficiary TAX FREE. Premiums are not tax deductible.
Life insurance is NEVER a perfect "investment" product. It's for people who are doomed to failure at math.
Run the numbers. You'll ALWAYS do better on your own. Life insurance - any kind - is a appropriate tool to plan for DEATH. Mutual funds, stocks, bonds, etc, are the tools to plan for LIFE, aka, investing.