How Do I Tell Someone That Buying Whole Life Insurance is a Mistake?

How Do I Tell Someone That Buying Whole Life Insurance is a Mistake?

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[Ethernet]

I only give financial advice to people who ask for it. Some people can be defensive and in reality, it’s not everyone’s place to be looking out.

[albertgroote]

You guys helped me to stop my spending habits and invest
Now I'm nowhere near debts all thanks to you guys

[karlacastle]

Well said. I like how he pointed out near the end that he has whole life but would not recommend it to most people. I too have whole life insurance policy through NW Mutual but NEVER recommend it to anyone. Think of it like buying a semi-truck. Most people would never have a need for a semi-truck regularly and end up regretting it if they ever get one. But there is a FEW that might need it. Whole Life Insurance is honestly a money-management tool designed for the high income earners. NOT an investment as some sellers try to trick you into thinking it is. It's an expensive tool if you know how to use it but a waste of money for majority.

[kennethwers]

AL Williams slogan was " Buy term, investment the difference ".

[adam]

Great way to finish this topic of discussion! It's not for MOST people. I dump in over $100k a year into WL, but also have many other assets. The most important aspect of WL (it's not one size fits all), is how the policy is designed. Example: I put in $100k, I have $80k of CV immediately... and i am even after year 5. This design takes away MOST of the commission to the agent :)

[trevorward]

Question from a young person that was sold Whole Life. I totally agree with this, but I am curious what constitutes a high enough income or net worth to need Whole Life?
Also, if this product is more beneficial for high income earners/net worth people, then these policies would be relatively large as well. Thus making a 100, 000-200, 000 Whole Life policy essentially worthless because its way too expensive for the young/lower income person, and too small to aid the Uber wealthy? Is that fair?

[JoshJorg]

I know some companies try to sell insurance as if there's some investment, but it's better to just keep it as life insurance, and keep your investments separate.

I'm not even in life insurance, but if I was, I would help people figure out how much life insurance they would need to help cover them based on their individual family needs.

So if you have a 36 year old man, and he's worried about dying in the next 20 years, but if he made it after that, he maybe not as worried about it anymore. Or maybe he wants to at least make it past the time where he would start collecting Social Security, and we could figure that out too.

But it doesn't make a whole lot of sense to take a risk on a whole life policy that will be super expensive, when in all reality you are trying to protect yourself in your younger years.

The whole idea about life insurances that you want to protect your family if you die early, not old.

And then you want to help them figure out how much life insurance they would actually need.

And we don't just make up a number like 200, 000 and think that's going to be good cuz it sounds like a high number.

No, we're going to figure out how much money would they need to make in one lump sum that if they invested it in some kind of mutual fund or whatever that would make an average 8% interest, give or take, they could live off the interest and not just spend it away in a few years.


People have to be educated when it comes to life insurance.

And if they do it right they could replace somebody's income just living on the interest of the lump sum from the insurance payout.

Of course we all hope this never happens to any of us, but we want everybody to be protected.

[Phlegethon]

Actually they were great in the 90s cause they were so incorrectly priced

[johnristheanswer]

Good item on Portfolio Rescue - The Compound this week on same subject .

[came]

Whole life insurance is not wrong for 100% of people 100% of the time…

[cscorona]

I appreciate that you guys give a pretty fair assessment of Whole Life, and not the “it’s always a scam” advice other “gurus” give.

Whole life should only be purchased by someone who fully understand the product and exactly how it fits into their long term financial plan. Unfortunately the vast majority of time people sign up for it simply because someone told them to, without knowing the “why”.

I actually do believe that it has a good fit for healthy people who have checked the other financial boxes, and are looking for a long term bond risk/return profile product that also provides other perks.

Commissions can be minimized with a properly designed policy.

[tomn]

Can you pls talk abt long term care insurance? When to buy? Who should buy them?

[__RD]

I see SO MANY people pushing these on TikTok ads

[Breeze-gdwj]

Please tell us how to invest the rest how can i invest when i not know what products to invest in ppl say get 7% etc return for 40 yrs etc instead of whole life insurance but where? its not easy to get 7% return if u not a day trader rype r someone no longer worker at 40 yrs old disabled no assess to 402k

[ryanhamstra]

Do you guys have a video explaining the types of life insurance and how to figure out what to get? I’m 28, wife and 2 kids. I have term life that is just enough to pay off our house, our rental property, and a bit extra until my wife can find a job that pays better than hers. How do I know if that right?

[tricord]

How do you “borrow it from yourself”? From a whole life policy?

[pat-orl]

Well, could you elaborate on the scenario where permanent insurance is beneficial for that small segment of the population?

[tricord]

Do the commissions for whole life insurance come from my first year premiums?

[albertgroote]

Wow what a nice video
Really amazing 👍👍

[rockystaatz]

Actually a simple whole life, not a term, is actually simple to use but last person to ask because the only one I ever used is bankrupt now