The Whole Life Insurance Scam - What Salesmen Won't Tell You

Whole life insurance is the most misleading investment or "tool" I've ever seen in my life. It's essentially a scam.

The commissions are sky-high, usually around one year of premiums.

It's absurdly complicated so as to be impossible to understand your true return on investment.

You get locked into a high payments that are hard to get out of for most or your life, and the returns are horrible.

If you do get out of the policy (most people end up cancelling) there are possibly penalties and tax consequences.

You get tricked into thinking that borrowing on your cash value is some kind of amazing benefit.

It's not.

I'll tell you why.

I talk about the benefits whole life insurance salesmen will "sell" to you, and then the truth behind each one.

If you are a whole life insurance salesmen, I hope we can still be friends.

Rich on Money

[barttfisher]

People are facing a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.

[DanielDuganaperture]

About 15 years ago, I walked away from a financial advisor when at our second meeting he brought up whole life insurance. I was not super savvy back then, but he could not explain why it was better than maxing my retirement accounts with Vanguard. Instead, I kept on maxing my 401k & IRA and today, I'm retired & the money continues to grow. Never take advice from a salesman. At the end of the day, the salesman's job is to sell.

[xhuljanelezi]

@Rich thanks for explaining these concepts for common mortals like me. You made an exemplary job simplifying things for people who do not have financial literacy and easily can be lured into there scams. Thank YOU!

[jeremsgarage]

I watched a popular whole life YT channel and tried to make it work in my mind. After hours of listening I determined that if I couldn’t understand it after all that time, it was not the product for me. Here in 11 minutes I understand why my gut was telling me that. Thank you!

[travelthis]

Wow thanks for this video! I’ve been reading a few books on whole life insurance and this video might be the counter argument I needed. Thanks!

[andreal]

I’m a 33 year old who isn’t married, doesn’t have kids/ dependents and doesn’t plan on having kids. I was being sold disability and other kinds of insurance by a financial advisor and I stood my ground and said I wasn’t interested. He then moved on to offer life insurance which caught my attention. I almost agreed to it until I did my research through videos such as these and realized this type of product does not fit my profile or my financial goals. Thank you.

[sbboy]

You’re ballsy Rich! I’m sure all the insurance salesman warriors came after you for this one! lol.

My father passed unexpectedly in 2018. The term life insurance process was one of the easier things we had to deal with.

[rthepunk]

Definitely a scam. I was just made Power of Attorney for an elder woman who paid $48 per month for 10 years on a $3, 000 whole life policy. She has paid double what the policy is worth at her death. We are cashing out of this baby. Poor lady was scammed.

[EK-lpod]

I have a very small whole life policy. I would say it was a mistake but it's been 15 years so i'm not going to get rid of it at this point. I guess I consider it as a bond at this point. I use the dividend to pay the principal as opposed to increasing the death benefit. So, I'm wondering does anyone know of anyone who is withdrawing the interest on it or is it better to just cash it out when it's paid up?

[MortalWarz]

Term life terminated at age 70 and doesn’t build cash value. Also Term life only increases as you get older. Whole life holds more value. It’s an investment that’s guaranteed for an average person.

[ApogeeQuoteAgentTraining]

Whole life insurance is not an investment. It's life insurance. It's a great life insurance policy for someone who wants a tax free death benefit when they die. Not if they die in a certain time frame. Term policies are also great policies for the right situation, not permanent solutions. Whole life insurance is not a scam, but it is not an investment tool. It is a life insurance policy, that needs to be understood.

[anthonynava]

Thanks for the informative video rich! Definitely going to cancel/change my whole life policy thanks to you. Appreciate you!

[applechili]

Rich is right, insurance is not an investment.

[theofficialgaro]

Great info, thank you for explaining so detailed. Would like you to post videos about other finance products that are scam.

[djrx]

Subscribed! This was great. I was lured into a zoom call with an IUL agent. He wanted to share “how the rich build generational wealth”.

[DBStoic]

I think this big draw with Whole Life is that most people won't do what you suggest; buy term and invest the rest. They buy term, then blow the rest putting nothing away for retirement. 100% WL is about commissions and little builds the members wealth. It is a bad deal; but most don't approach the alternative with any financial acumen.

[matthewbartke]

0:50 I'm not sure how Whole Life Insurance could be a better investment than the stock market. Usually adding another person in the middle increases costs and reduces return.

[brandirobinson]

This is very clear and straight to the point. Thanks for all the gems!

[MackswellW]

Did you have Term In addition to SGLI? I want term but am unaware of having SGLI though active service affects your ability to collect 3rd party benefits or vice versa.

[Jrodwheelz]

Sorry if this is a dumb question just trying to learn but it's a lot a month but if you can borrow against it wouldn't you be able to borrow enough for what you are buying and then also enough to pay your premiums for the year?