Permanent life insurance

UncleTrvlingJim said

What's your intention for getting insurance? You can get a much higher coverage for less monthly payment with term... so from a standpoint of protecting your family if you die, term is "better". Of course, if you don't die you never get any money.

However, as a savings plan, whole life insurance is terrible for a rate of return. You'd be better off, saving your money in a mutual fund.

I went the direction of getting term life insurance and saving money in a mutual fund.

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I bought half a million in term when I was 23. It cost about $87 per month and within 8 or 9 years had gotten up in value enough that I didn't need to make the payments anymore. I had it set up on automatic withdrawal and still do.

The cash value after 23 years is quite substantial and the coverage is still in place.

I think if you're young it's a good deal. If you're older, then whole life is too expensive for the insurance and the return is marginal.

Of course, I may just be rationalizing a sort of good choice as a great choice because I did it, but I will say that between my wife and I we could continue to make our premiums for another few years and then retire off that one source alone at 65.