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Don’t worry OP, it’s not a scam. Whole life is a real product and NWM is a real company. It’s not a scam, but simply not a great product for most people. You sent an email, that’s good, now just hang tight till Tuesday to talk to someone on the phone.
Do not worry, you haven’t lost your life savings. It’s as simple as cancelling the service, but, just as when you are trying to cancel a subscription, be prepared for a hard sell and a little more time on the phone than you’d like, but as always, you will get your cancellation in the end.
If you are truly wanting life insurance for insurance purposes (you have dependents that rely on your income) might even make sense to have them switch it to a term life, which is recommended for most people. Term life is a much lower premium than whole life.
If you bought it as an investment, do know that conventional wisdom states you should purchase term life for life insurance purposes, which has a much lower premium, and invest the difference in regular investments (such as stocks, ira/401k) because the market gives better returns than does whole life.
Chill out, enjoy the rest of the weekend and best of luck!
Whole life is a fantastic option if you can afford it. Not a scam, you’ll be glad you got it in 15 years. I have a policy…
I have a whole life policy that I’m paying $173 a month for. $500k in coverage. I did the math and if I die at 99, it’s basically a return of 3% on my money. That’s obviously less than I would return in the market over the time period (but also that assumes I live to 99) and I’ve considered whether I should cancel but honestly, $2k a year isn’t too significant for me at this stage so figure it makes sense to just keep it. I’m not even share what the cash value is but don’t think it matters in my equation bc I don’t see this as an investment vehicle
When you call to cancel, be prepared for a hard sell. They get big commissions for those whole life policies.
Unless you have multi million dollar portfolios and/or want to invest in complicated financial instruments, most people don’t need a financial advisor. You just need to invest in index funds with low expense ratio. The markets can seem volatile in the short term but that’s part of the risk in investing. In the long term you will see your investments grow over time.
https://www.policygenius.com/life-insurance/how-to-cancel-your-whole-life-insurance-policy/
This may have helpful information for you. Regardless of what happens with the policy, you need to ditch your advisor immediately. They do not have your best interest in mind if they sold you this product.
Not a scam just a terrible institution
You’re at risk of losing access to your money near term, and being required to throw money in at the risk of policy lapse. There’s also the very high opportunity cost of the policy.
Think there is a 30 day grace period for cancellation..not to worry..
Yes, Federal Law requires it.
Mentor
Op - yes you should cancel. worst case scenario you lose what your initial premium payment. It’s not going to suck anything else.
It’s a high fee, low return product that is really only valuable for people who expect to have taxable estates or need to guarantee a certain amount money upon their death with an indefinite term.
Life insurance isn’t literally for life insurance. It’s a way to borrow money tax-free against the value of your policy to buy more money-generating assets, so you can grow your wealth. Your advisor didn’t explain it to you clearly.
Well described CD1- life insurance and the ability to use the tax free for whatever reason is a valuable addition to a financial portfolio.
Just want to double check on rationale... This financial advisor is focused on setting me up to be a Big4 partner, which comes with a lot of financial restrictions. Is Whole Life Insurance appropriate in that case, and that's why he recommended it over traditional investments? Or was this just bad advice through and through?
Thanks to the advice here, through DMs, and through my own research, I am planning to cancel the WL policy on Tuesday - hoping I can get the initial premium back but even if not I don't want to dig myself further in. However, I'm still evaluating if I ought to keep my actual investment portfolio with this guy. (I did that over self managed because of our company rules about working with specific brokerages - have about half my money with him and half in an index fund on my own.)
Coach
PwC will require you to hold life insurance as a Partner anyway, and do so at a pretty good rate. I’d use that plan instead once you are a Partner.
Does anyone have thoughts on what to do with a 1.2k premium 100k whole life policy that has existed for 26 years? Dividends is about 400 a year. Benefit is approximately 135k, surrender/loan is 40k.
Roll the 40k of Net Cash Value into a VUL via 1035 exchange for permanent death benefit protection. Should be able to cut off all premiums moving forward.
Update. Spoke with my advisor today, and as expected, he tried to sell me hard on keeping it. There were some points that were clear sales pitches, but other points that seemed valid. Specifically, he cited three goals for me with this policy:
1 - Build a non-market-correlated reserve so that my retirement withdrawals aren't constrained by the market tanking at an inopportune time
2 - Tax free growth
3 - Long term care benefits, given my excellent health and relatively young age (I'm 37 and got their top rating for health)
He also emphasized that this is a "blended policy with overfunding" and that the long term care rider isn't standard... I need to do more research on my own to understand these points.
The policy did not officially start until 9/6, and I have ten days to pull out and get everything back in full. (He also said that he would extend that for me if I needed more time, though I'd rather stick with the written policy than rely on an exception.) I am breathing a HUGE sigh of relief that I have more time to assess my options.
Thoughts on these arguments? I'm also planning on taking the policy to my best friend's dad, who is a financial advisor / insurance agent. My advisor encouraged me to show it to him and said he would be shocked if my friend's dad wasn't impressed by how they built it.
Great update. I wouldn’t pay $1600 a month. But consider something in the $100 - $250 a month category. Something affordable ( more like no- browner ) and if it’s something you agree with in the future you can always buy more in the future.
Don’t do it at that price point especially if you are uncomfortable!
I just sent the advisor an email but I assume I won't hear from him till Tuesday. Is this an actual scam and I should get all my money out? Or just bad / biased advice and I'm okay, just should cancel this policy? I'm freaking out a bit...
Thanks for the update.
These are the same reasons why I selected to proceed with this type of policy. For me, the policy is a moderate monthly cost I can afford to ensure I can some day retire adequately and independent of the market (#1).