Life Insurance/ Investment

K2

I was approached by my agent about life insuance again today. I know most of you guys know this but for some of the younger guys.

I'm talking about the insurance that is tied with investments. In my llifetime I've heard them called "Whole Life", Universal Life", "Director's Life"

These policies are heavily loaded/commissioned up front making your first years "investements" practically worthless. There is no other investment mechanism with a garanteed worse return in the first year.

Ex. You pay: in $2000 the first year. You have: a term policy worth about $350 and a cash or surrender value of $0. The second year your money starts working for you but you are $1650 behind.

In my opinion it is better to buy a "term life" policy and do your investing elsewhere.

Not that I'm so smart. I bought a Universal Life policy back in 1983 and still have it. Once you have the policy and paid the upfront commissions they are not too bad.

R&S Exteriors

I couldn't agree more. Term is much cheaper for large amounts of coverage. Take that extra money and put it a retirement account don't give it to the insurance company.