An insurance agent approached me and tried to sell me a whole life policy stating that there are several features that may have positive tax advantages!

Can you please provide me with an overview as to what the real facts are, ie tax advantages of a whole life from your point of view, and if you have any issues in general that are negative in terms of buying a whole life policy. In fact, and advice from your point of view is appreciated!

Tks a lot!!! Your site was tremendously helpful to me during my tax preparation!

I bought Whole life/Permanent policy because I was told that it was a great way to save a bit of money, and obtain permanent life insurance. I choose Whole life over term because term though it is cheaper, runs out after 10 or 15 yrs!

I bought when I was 30 years and maximum term policy I could buy at the time was for 30 year out! What would happen if you lived longer than 60 years, who is going to give you insurance at Age 60 with preferred rating with all potential health problems at that age!

Think about insurability at Age 60!

I bought term insurance I thought at the time, I did not need to be covered at Age 70. I mean who needs life insurance at Age 70? I have paid off my debts at that time, have no liability, no mortgage and kids have completed college at that time.

The point here is that the difference in premium between whole life and term is invested directly into mututal funds by me. I have had the discipline to do that for 10 years.

I think Whole life is very expensive and the Insurance Co's make a killing along with the pushy Insurance agents.

I bought whole life insurance for permanent life protection. The issue was do I know when I am going to die? Of course not, so I needed life insurance, and I wanted to be permanently protected, so I naturally went for whole life.

I know a lot of people who got caught with the A L Williams method of approach, ie buy Term Insurance and invest the difference in Mutual Funds etc. But, most people do not have the discipline to follow through with maintaining consistent investment plans.

So, in my case, I bought whole life about 10 years ago, and invested the funds in aggressive portfolio, the result is a very nice build up of cash value in my life insurance policy!

The Cash value is also very important as it can be used to fund the policy as well.

I think Life Insurance is a must for everybody especially if you are in business. I recently filed out an application for a business loan, and one of the questions asked was what was cash value of the Life Insurance policy.

This is considered an Asset! Wow! So, banks like it I guess, it increases your net worth. So, business folks, I think it is a great asset as well.

I think the Whole life or permanent policies are very expensive and the Agents make the maximum commission from these policies. Usually, these commissions are very close to 45% of the 1st years annualized premium.

Hence, be careful when buying these polices, sometimes, in fact most often, these policies are cancelled within the first 10 years and the policy holder usually losses all his cash value, due to surrender charges.

The Term policy can be cancelled without surrender charges.

If you buy this policy you should keep it for at least 10-12 years miminum!

I think you guys have missed some salient points regarding whole life vs term insurance. The most important point is to leave a legacy for your loved ones, or to leave property whose mortgage debt is paid up from the proceeds of the life insurance.

The advantage of whole life is that in this case, the insured has guaranteed a legacy, whereas in the case of term life, if the insured outlives the term coverage period, there is no scope of any legacy.

Furthermore, the whole life policy has the potential of being paid up within 15-20 years. Although, I guess this is a controversial subject and I would let Taxguru discuss this when he gets round to giving his opinion on this subject.

Isnt it true that Whole life Insurance generates maximum profits for Insurance Co's and its agent?

I mean why is it being tauted as much better than term insurance? It seems that my money through higher premiums are going into the pockets of the Life insurance companies!

I am yet to see a convincing argument to buy whole insurance.

Hey Taxguru, lets hear your esteemed opinion on this subject? I guess you are waiting to hear other peoples opinion!

I always thought it was better to own than to rent. Hence, I have a similar analogy for Life insurance. Term is like renting, whereas Whole Life is like owning. I always try to own and avoid renting. Its like creating wealth!

Life insurance has many features of which some of them have been discussed in this tread! Remember, the main issue here is that one must has to consistently maintain the policy for a minimum of 12-15 years in order to get maximum benefit!

Majority of people simply stop paying the premium after a few years, getting frustrated with cash value being very small or neglible in the first few years. The cash value builds up significantly after 3-4 years and then based on market conditions/portfolio performance, this cash value tends to accelerate very rapidly in years 7 through 11 years.

Ok, folks lets assume that the Whole Life is better than the Term insurance in the case of somebody who can comfortably afford the premiums.

The next question I have is how do you select the Insurance Company? Which are the better companies to select?

I am your average Joe, how can I make the determination as to which company is better suited for my needs?