[300bps]

I'm in IT but I am also a CFA charter holder (Chartered Financial Analyst). I disagree wholeheartedly on your assertions on whole life. I have only seen whole life be an appropriate investment vehicle for very wealthy families that are doing estate planning. There may be other times where whole life is appropriate but I don't know what they are. In almost all circumstances someone would be better off buying term insurance and doing their own low-fee investing somewhere like Vanguard or Fidelity. They've made it so simple with Target Retirement funds.

[khafra]

> There may be other times where whole life is appropriate but I don't know what they are.

$80,000 for cryonic suspension, which is most likely to be successful if you die of a terminal illness; which is most likely to happen when you're old enough that term life insurance is ridiculously expensive (but could happen when you're young, which is why to go whole life instead of just investing and then paying up front for the suspension).

[300bps]

If term life insurance + self-invested funds nets more money than whole life insurance then it is better to buy term life insurance and self invest your funds.

The problem with whole life are the massive profit the company takes and the massive commission the salesperson takes. If:

A represents the value of a term life policy after costs

B represents the value of investing after costs

C represents value of a whole life policy after costs

In all circumstances I've evaluated but one, A+B comes out ahead of C. The only circumstance where C has a chance of coming out ahead from what I've seen is as part of an estate plan to minimize taxes.

[franl]

Based on your comment, I know you won't be swayed, so I won't argue :) My point was simply that allocating a small percentage of your money toward a WL policy can make some sense because it's such a flexible financial instrument (tax-deferred growth, tax-free withdrawals, policy payments made in the event of disability, a small but reasonable tax-adjusted return, permanent death benefit, etc.).

If/when I get married, my plan will look like this: majority of life insurance via term, modest WL policy, disability income insurance, some index funds, and some stock of two or three companies that I know deeply.

What happens to folks who retire after a crash like in 2000? It'd probably be better if they left their investments alone, and instead drew some money from their WL policy. You could argue that their allocation should've been well tilted from equities at that point, but what if it wasn't?

In a perfect world of automatic 10% yearly returns, and diligent saving/investment, buying term and investing the difference (from WL) would smack the performance of WL. Unfortunately it doesn't work like that. Most people don't save/invest diligently, and the market isn't automatic.

[gbhn]

Definitely unbundle your life insurance and investments. The only reason I can think of for coupling them is just shy of fraud.

-- someone who once got sold a whole life policy

[franl]

Out of curiosity, which insurance company was it? How long after getting the policy did you cancel it? What made you cancel?