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Why is whole life insurance so bad? I am 40 years old and have had a whole life insurance policy since I was 25 years old. I purchased the policy from the fee-only planner with whom I still work -- he works with my entire family. The coverage anmount has grown to $277,000 from the original $250,000, and last years cash value was $43,600 ( originally projected to be $32,000 ). The dividend was projected to be $1,000 on the original chart the planner gave me -- it really was $1278. My premium is $1800/year. The cash is guaranteed, and I never recieve a 1099 for the increases, which is nice last year my mutual funds tanked and I STILL got a 1099. $1800/year doesnt cost me anything -- I make more than enough money to pay for it. And if I can't work due to a disability -- the company pays the premiums for me. I have friend who is on total disability and can no longer work in his choosen occupation ( trial lawyer -- he lost his voice due to a neurological disorder ), and not only does he get disability income payments from his insurance company ( MassMutual ), but his life insurance premiums are paid, as well by his life insurance company ( Guardian ). He has a $1,000,000.00 policy ( death benefit ) and before his disability ( six years ago ) his premium was $12,000/year -- now he uses loans from his cash value to purchase real estate in his second career as a real estate investor. Seems like a good deal to me.
I like my whole life policy -- I just borrowed $30,000 from my policy to buy a car. No credit check, no finance company -- and I pay myself back. My planner tells me also even if i borrow my money still earns interest! Why is this bad?