re: Over Funding Life Insurance vs. Roth IRA

You can stuff more funds into a LI policy than a Roth.

Roth is cheaper because you don't have the cost of Insurance as a drag. Both Whole Life and variations of a Universal Life polices have cost of insurance. UL products will break these costs out. WL can be figured out by a good agent/company.

If waiver of premium for disability rider is available for either type of policy, compare cost of waiver and consider. If disabled, then premiums are made for you by the company. This could make the policy self funding at a very good time for this particular situation. There is no IRA I know of that funds itself in case of a disability. Weight the cost of the rider with the cost of a group or individual disability policy.

Variable UL polices can be VERY expensive. Separate account charges, mortality charges and so on. Know your policy. There are several lost cost or no cost Variable UL policies about there. Do your homework.

You can find decent low cost and high early cash value Whole Life polices. With a Whole Life policy, you don't get the market returns of a VUL or Roth IRA in equities. However, consider a "whole" portfolio view, where as a Whole Life cash value being the conservative allocation of your portfolio. This will allow you to be more aggressive with other investments.

Liquidity with cash value life insurance is a very nice feature.

Regardless, a $2000 Roth will put perform a $2000 life insurance premium....hands down.

Short story:

Pure investment and return driven? Roth IRA
Lots of flexibility and benefits? Cash Value LI