What Are The Disadvantages Of Whole Life Insurance?

  1. 1313 POINTS
    Lenny Robbins
    Principal, LifeNet Insurance Solutions, Redmond, WA
    Whole life insurance is what most people think of when talking about permanent coverage, something that will last until you die. However, few carriers offer this coverage any longer because of several issues. Cash value life insurance is expensive when compared to other forms of permanent life insurance. The cash available to borrow is non-existent in the early years, and any amount borrowed reduces the death benefit by that amount. But perhaps the most negative from the owners point of view, is that the death benefit does NOT include cash value in the vast majority of cases.
    Answered on November 4, 2014
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  2. 4249 POINTS
    Gary Lane
    President, Lane Independent Agency, Southern California
    Whole Life Insurance is what started it all and it is still widely sold. However, it is also the most expensive by far. But it is totally secure and will never lose any money no matter what happens in the economy. Most people would, however, be better served with a newer product called Equity Indexed Universal Life (EIUL), which several companies now can provide. The cost is much lower, and the ability to gain a substantial increase in value is much higher. While it is tied to the market, a very few companies allow the consumer to avoid the risk of market drops completely. National Life Group, in a product they market through their largest broker, Premier Financial Alliance (PFA) has a protective floor, so that if the market goes down, your account will never go down but will stay at the amount it was at the prior year. When the market goes up, your account goes up, with a cap, so if the market goes way up, yours will just not go as high as the market might. Love to discuss this with anyone. GARY LANE, 714 422 9616. Thank you all.
    Answered on November 5, 2014
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