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Is Whole Life Insurance a Good Investment Tool?

You can read many different opinions on whether Whole Life Insurance is a good investment strategy and the conflicting response can be confusing.  It is good to remember that individual situations make different investment vehicles better for some and not others.

For example, a whole life policy can make sense for care of a dependent or disabled child, liquidity for a closely held business, or for estate tax issues.  But many investment advisors agree that for most, whole life insurance can be part of a retirement savings strategy.

Photo by Oleg Magni from Pexels

While 401K and IRAs offer higher returns, usually for lower fees, you are getting additional coverage and protections in a whole life insurance policy.  If you are already maximizing out your 401K or IRA contributions, it makes sense to use an additional investment tool like a whole life policy to increase retirement investments and diversify in one step.  The cash value is protected from creditors in most states.  Unlike term insurance, whole life insurance is permanent life insurance, with stable, if moderate, returns.  For some customers, this gives the peace of mind term life insurance cannot deliver.