Is an Insurance Policy a Good Investment?
Some say that buying whole life insurance, the type that you pay for dearly every month, but it also returns your premiums (and then some, if all goes right) at the end of the policy term, is a bad idea. The only reason they say it might be a good idea is if you are one of the lucky few who are maxing out all of their other savings and growth avenues, such as 401k’s at work as well as IRA’s, where the growth is going to be much better with less fees and other moneys taken out, than in the low growth of an insurance policies typically very conservative investments.
I have to admit, buying whole life insurance as opposed to term, where you pay much less premium, but do not get any sort of return on your money, did seem like a good idea to me, but upon further examination, I wasn’t so sure. The investment return does seem a bit conservative if you look at it compared to a higher yield of mutual funds and the like that you are typically investing in if you belong to an IRA or a 401k or other similar investments that usually offer some sort of tax advantages, whether it be up front of back end.
So, I would suggest you talk to a fee based counselor on this, since their interest is usually not commission based and their advice is going to be more geared toward what helps you out the most financially, instead of what they want to push or what their manager happens to be telling them to push that week.
