Ask Jesse: What's the Deal with Whole Life Insurance?

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4.7 • 1.1K Ratings

🗓️ 11 July 2022

⏱️ 8 minutes

🔗️ Recording | iTunes | RSS

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Summary

A listener writes into the show to ask about whole life insurance and whether it's worth it for a young couple in their 30's. As always, it depends! Whole life policies typically come with big fees, which of course insurance companies and salesmen like. Jesse points out that the policies can work for some people in high marginal tax brackets, however the tax savings must be carefully weighed against the earnings you could have made by simply investing in low-cost, diversified index funds and sidestepping the high fees of whole life policies.

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Transcript

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0:00.0	Hello, Wineappers, my name is Jesse Meakin with another episode of The Wineapp Podcast where
0:08.7	we teach you four rules to help you stop them and pay attention to paycheck, get out of
0:12.1	debt, and save more money.
0:15.7	You can send in questions to askjessieatwineapp.com, askjessieat, you need a budget.
0:21.8	Dotcom, and he will say, you need a budget.
0:24.1	No, this is actually a little different from the budgeting today, and it asks, I have
0:27.3	a question about whole life insurance, currently my husband and I have term life insurance
0:30.6	and whole life insurance, as well as a matching 401k and a Roth IRA, cool, cool, cool, cool,
0:35.1	cool, cool, cool, except for one of those things.
0:36.6	I've heard a lot of controversy over whole life insurance and wanted to see what your thoughts
0:39.9	are on it.
0:40.9	Our advisor has discussed it more as diversifying our portfolio rather than for life insurance.
0:48.6	So the plan is for us to cash it out once we get 6D5, we're currently 30, you guys are
0:52.7	30 and you're killing it.
0:54.8	Awesome, and then we have stable income no matter the market, when we retire, what are
0:59.5	your thoughts on whole life insurance, there are ways to have no matter the market situations
1:04.2	when you retire.
1:05.4	You just go into a more conservative portfolio, which is what the insurance company is doing
1:09.6	with your money.
1:11.0	They're investing it, and they're getting that safe return, and they're making money
1:16.2	on the premiums that you give them, and then some of those premiums are just flat out
1:22.5	profit for them, and some of them they are actually using to invest and get used, some
	...

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