I am 30 yrs old. My whole life policy is less that five years old and I feel it is breaking my bank to pay monthly. It is 50k and I also have term for 500k. Why cant I drop that expensive WL policy and invest that monthly cost into a Roth. I could pay funeral expenses out of that if my term insurance ran out by then. Does this sound like I am on the right track?

A lot depends on why you have life insurance. It is not usually a good investment to make money. When you are younger and need to leave a substantial amount to a spouse to take care of the family and pay off the home, term insurance can be bought cheaper in a higher amount. When you retire, all you really need to use insurance for is to pay for a funeral and that can be prepaid out of your savings. You would be better to put your money at that point into other savings or investments that will be earning a good return rate.

Well, you're on the track that I'm on. That's what *I* would do. But I'm not much of a whole life person. I'm biased, I'll tell you that right now. There is NO WAY I'd buy whole life coverage. I'd invest - even outside of a Roth - and use those savings in later life.

What is whole life insurance? A whole life insurance policy covers you for your entire life, not just for a specific period such as term insurance. Your death benefit and premium in most cases will remain the same. Whole life insurance also builds cash value, which is a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you can borrow against it. Are there choices within whole life insurance? Yes, the most common choices include traditional, interest-sensitive, and single-premium whole life insurance policies. A traditional whole life insurance policy gives you a guaranteed minimum rate of return on your cash value portion. An interest-sensitive whole life insurance policy gives a variable rate on your cash value portion, similar to an adjustable rate mortgage.With interest-sensitive whole life insurance you can have more flexibility with your life insurance policy such as increasing your death benefit without raising your premiums depending on the economy and the rate of return on your cash value portion. Single-premium is for someone who has a large sum of money and would like to purchase a policy up front. Like other whole life insurance options, single-premium whole life insurance accrues cash value and has the same tax shelter on returns. What are the benefits of choosing a whole life insurance policy over other types of life insurance policies? Unlike term life insurance, a portion of your premium money goes toward your cash value which in turn could pay off your entire policy only after a few years. Also, your premium will remain constant during the time you are covered unless you choose otherwise. And, unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams. Whole life is also a good choice because of the tax savings. Should I purchase a whole life policy for an investment? The rate of return on a whole life insurance policy is very low compared to other investments, even with the tax savings factored in. Most investment professionals would agree that life insurance should not be used solely as an investment tool and you should judge your policy choices on the protection and not the rate of return. But, if you are in need of life insurance, the tax benefits and cash value is an added bonus when purchasing protection for your loved ones.

This is a complicated a question to answer.At age 60 will you have any existing debts - like a mortgage on a house you don't even own yet? Will you have future debts like medical expenses not covered by insurance (Medicare)? Will you have a pension that disappear when you die so your spouse gets no further benefits? Will you have people dependent on you - like medically dependent children or a spouse or parents? What will be your health? What will be the costs of a funeral? What other expenses will you face in the future?Perhaps a WL policy is not the best. Did you check into OTHER types of permanent policies like a Universal Life policy?Go talk to a financial planner to develop a game plan for your entire life. Review it frequently and make adjustments.Good Luck.^

Frankly, I would drop the whole life policy and smack the agent that sold a 25 year old a 50K insurance policy. Think about how much $50K will be after inflation in 40 years.... Suggestion: 1. Take money being wasted in the Whole Life plan and start a Roth. 2. Buy index funds, QQQQ, Janus etc... 3. Keep the 500K term life. Use long term (Fixed 20-30 years) termporary insurance "Term 500K" policy to protect you while you accumulate assets. When you have aquired enough assets you wont have to worry about whole life insurance. Even a 4% treasury bond will outpace the cash values of a whole life policy.

Whether or not you need that WL policy depends on your current financial position. Different people have different needs, so there's no general answer to your question.If you are a singaporean, you can email me your contact number and I can arrange a time to share with you more on this matter. I'm in the business of investment risk management planning, helping people to develop strategies and portfolio to achieve their desired goals.Email: Jagspor75@gmail.comEnjoy your Life!

Get rid of the whole life policy agents love to sell because of much higher commissions. Is it really worth paying up to 9 times as much as term, and for your whole life yet? It's a marketing gimmick.If you keep your term, and invest as much of the savings from dropping the whole life, you'll have a healthier retirement later. Yes, place it in an IRA account. You are now on the right track.

Right track indeed. Whole Life Insurance is way too expensive. The only way to go is Term.

You can cancel your whole life insurance at anytime. No one is stopping you. If the agent who sold it to you is pressuring you to keep it, report him/her to your state's insurance department.I don't know if you read your life insurance policy, but here is the truth about whole life insurance:1) They are expensive (as you already experienced).2) They have a negative rate of return initially, but in the long run, a very low rate of return of 1-3%.3) If you wanted to use the cash value, you have to borrow it and pay loan interest of 6-8%.4) If you die someday, the insurance company keeps your cash value.Now you know the truth, is there any reason why you want to still keep your whole life insurance? You should invest the difference into mutual funds that are inside a Roth IRA.Reason why people buy life insurance is so that it can replace their income in case they die. Unfortunately, many people don't know anything about life insurance and buy whatever the agent sells them on. People should get term insurance so that they can build enough wealth in the long run.As for your term insurance, you should read the policy. Hopefully its a 20 year or 30 year level term insurance. If its a 10 year or shorter term policy, you may want to get a longer term policy since its going to take awhile.If you invest $300/month for the next 30 years and you have an average rate of return of 12%, you would have about $1.1 million. In 30 years, do you think you still need life insurance?If you can't afford $300/month, then start something small such as $50/month or $100/month. As your income grows, you should invest more. Many companies require you to put in initial $1000 deposit to open a Roth IRA. I open my Roth IRA through Primerica Financial Services and their only minimum was $25/month per mutual fund or $250 per mutual fund.