re: My Whole Life Ins. situation and advice request

I pay in $300/mth and on most days don’t regret it. The first 10 years of paying in and during a strong bull market it does make you question it. However, now the compounding interest and not having to pay on any gains once I decide to collect makes it a nice addition to my overall portfolio.

I also expect the annual dividend to increase now that interest rates are rising.

How long does that surrender charge stick around for?

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This thread got me looking into my own whole life policy. High earning medical professional, and someone I thought I trusted has me paying $25,000/year in a lump sum once a year into a Variable Universal Life Insurance Policy through Lincoln Financial.

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A Variable Universal Life policy and a whole life policy are two different things but they frick you just as hard as the other.

If I could name one policy worse than a whole life policy, it would be a universal life policy. In the 12 years I've been doing this, I have sold a grand total of ZERO universal life policies and the reason is because they will frick you long and hard but you won't realize it until years, maybe decades, down the road. Get out of that shite now. Seriously. Your premiums are NOT fixed and it is NOT a permanent policy. Each year you get older the cost of insuring your life increases and if you continue paying the same amount each month, you're going to have the difference come from your cash value. Eventually you'll get a notice from Lincoln Financial (which is a great company, by the way) saying that you will need to start paying way more than before if you want to keep the policy. This only gets worse with bad economies/markets.

Same advice applies to you as to the OP -- get out of it and go term then invest the rest into an actual investment product that's designed to make you money instead of the insurance company.

I am 37 by the way and married with 4 kids. 2 years into this policy and the next 25k (3rd payment) is due in one week.

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If someone wants permanent insurance, UL is exponentially better than whole life

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That would be true if UL was actually permanent. Whole life is more permanent than UL.

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If someone wants temporary insurance with a return of premium, it is exponentially better than whole life

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The only way a UL turns into a temporary insurance policy is by not continuously increasing the premium payments so that you can "keep up" with the increasing costs associated with it. Which, if they do indeed always pay the same amount of premium and it cancels (becomes a temporary policy ), there is absolutely no return of premium associated with it because all the cash value was eaten up by the difference between what the customer paid and what they should have paid.

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Whole life is if you want permanent insurance and access to the cash value without jeopardizing the permanent insurance

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If you buy a whole life policy so that you can access the cash value one day in the future, you are indeed jeopardizing the permanent nature of the policy. Only way you don't is if you actually do pay back all the loan balance and associated interest. As long as a whole life policy has a loan balance, the permanency of the policy is jeopardized.

To add to my above post, I'll reiterate that the best type of life insurance for 99% of the population out there is term. There are a few instances where a whole life policy would be appropriate (neither of them involve the use of the cash value component, though) but the vast, vast majority of the American population would be best served by purchasing a term policy and investing each month. Universal Life policies are pure shite. An agent selling a UL policy as a "permanent" policy is like a financial advisor selling an investment by saying "buy this mutual fund and only invest $25 a month. it'll always be worth something and would certainly never, ever decrease in value -- even if you decide to stop investing in it for a while. but be careful, if you always put only the $25 I'm advising you to invest each month, you may find a time when this investment won't be worth a dime so be sure to increase the amount you invest each month"

Customer: "but I thought you said I always only have to put $25 each month and I'll never lose money"

Advisor: "right, it'll always be there for you as long as you're investing $25 a month but it might not be worth anything one day if you only invest $25 a month".


It's the same damn thing. UL's are a scam - even more so than whole life - for 99% of those who buy them.

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Actual #'s after just looking again: $705/month premium, $115,000 cash value, $810,000 death benefit

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Ouch. That’s a lot. I have older WL policy and my premium is $1,000 annually.

Baw, I have a serial downvoter on all boards . There aren't many subjects that I chime in on that I'm 100% confident I know what I'm talking about but life insurance is one of them. They can downvote all they want, if they don't like the truth, oh well.

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If someone wants permanent insurance, UL is exponentially better than whole life

That would be true if UL was actually permanent. Whole life is more permanent than UL.
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Incorrect. There are UL policies with guarantees. There isn't anything more permanent than a guarantee (for whole life or UL... it is the same thing).

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If someone wants temporary insurance with a return of premium, it is exponentially better than whole life

The only way a UL turns into a temporary insurance policy is by not continuously increasing the premium payments so that you can "keep up" with the increasing costs associated with it. Which, if they do indeed always pay the same amount of premium and it cancels (becomes a temporary policy ), there is absolutely no return of premium associated with it because all the cash value was eaten up by the difference between what the customer paid and what they should have paid.

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You are way off because you evidently have never seen a decent UL (with guarantees).
The way a UL becomes temporary is when the insured cancels the policy to pull all of the cash out of it.
ULs grow cash value better than Whole Life policies. The kick in the nuts is that the UL will lapse if you use the cash value (this is what you are insinuating).
Thus... the purpose of the UL is to provide temporary life insurance until the insured wants to utilize the funds in the policy. Again... the funds in the UL grow/accumulate faster than whole life because the policy does not guarantee to be permanent when the funds are drawn. That is the tradeoff and why whole life is so much more expensive and why whole life accumulates growth slower than ULs.

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If you buy a whole life policy so that you can access the cash value one day in the future, you are indeed jeopardizing the permanent nature of the policy. Only way you don't is if you actually do pay back all the loan balance and associated interest. As long as a whole life policy has a loan balance, the permanency of the policy is jeopardized.

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This is true. But the loan does not require to ever be paid back. Interest payments can be made with no payment down on the loan and the life insurance is still permanent.
ULs use the cash value to sustain the annual renewable term nature of the universal life policy and that is why withdrawing funds is so dangerous down the road if you still need to have life insurance coverage for your family.