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Whole life insurance: needed or put that money towards 401k? Male, single, no kids, no debt. I was sold a 300k policy for $435/mo. Was I taken for a ride?

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What do you need life insurance for? This makes no sense to me.

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likesmart
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Maybe if you were actually bullet proof, your life insurance would have been cheaper

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100% taken for a ride

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likefunny
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Can I interest you in investing in a timeshare? A vacation property of all your own that you can utilize two weekends every single year - DM me for details, but hurry because this offer won’t last long!

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likefunnyuplifting
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I went to a Westin Vacations timeshare pitch (at Westin Maui Ocean Resort Villas)... $63K buy-in gets you access to reserve 1 week/yr, but you also have an add’l $3K/yr in annual HOA fees... total rip-off... but at least I got a cheap 5-night vacation in Maui for that 2 hr pitch

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Scam. Buy term and invest the rest

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Yes that sounds absurdly expensive

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If you just invested that same amount you would get 364k after 30 years with a (conservative) expected interest rate of 5%

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But while you’re here I have a foolproof investment plan that will double your money in just 1 year! DM me for details

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Nice try

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Mmm maybe. Life insurance is so that you provide for those who depend on your income if you pass away (typically spouse and kids). And even then it’s better to buy term insurance than whole life. I have something like $2M coverage for < $200 month. It’s mostly term insurance although one for one my policies, I get all cash back when it expires (no interest). You’ll get much more - so think of it as forced savings and move on. But don’t buy anything else from whomever sold you the policy.

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Yes. You can get $1 mil life insurance through your benefits for $400/month less than that

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Whole life insurance is just short of a scam. There is no reason to have it. Term life insurance if dependents/large debt otherwise avoid it all together.

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How long ago did you get the policy? You usually have 10 days to cancel without penalty

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likesmart
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A couple months ago. Spoke with a good friend and said it was a mistake. :(

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OP- don’t listen to the haters. They don’t know your financial situation. You have to think for yourself. Whole life can be a good decision if you know what it is and if it makes sense for you. Whole life is primarily a tax advantaged investment choice that might make sense as part of your portfolio. As people have said, term life is much cheaper so if you’re primarily looking for life insurance coverage, go with that. But if you’re looking to diversity your investment portfolio in a tax protected way, this could be a great addition

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likesmart
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Found the WL salesman

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Um, I pay $15/mo for $500K 15-year term Opened when I was 26 Am an only child... got just in case, for my parents

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What are good companies that sell term insurance policies? I have one currently with my employer but what happens when I leave? Is there anyway I can still hold on to that?

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Employer insurance usually cannot be kept after you leave, which is why it’s a bit risky. Depending on your medical situation, it might be cheaper to get employer coverage, but that’s the risk you run. For non-employer coverage, comparison shop here: https://www.term4sale.com

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helpfullike
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$435 a month. What a great con

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Term life insurance is a really expensive way to build wealth. Same thing with annuities. Don’t feel bad, everyone makes mistakes. In the future be wary of buying any product that has a salesperson. That usually means the product is expensive and needs a fat commission to sell that ultimately you are paying for.... If you are younger and healthy a term insurance policy will inexpensively help you insure your future earnings. Then use investment based vehicles like 401k and even taxable brokerage accounts (weighted towards equity to minimize taxable income) to build wealth with market returns while minimizing fees and commissions.

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I generally agree, but whole life does offer tax free loans on the cash value if you run out of financing options, eg starting a business down payment on a house, etc. These loans don’t need to be repaid, the amount is deducted from the death benefit. Purchasing a whole life policy depends on your personal financial situation and obligations .

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Similar stats to you and also have whole life. I would say the pricing doesn’t not seem to be out of line with expectations. What you should be considering is whether the firm you bought from can deliver consistent returns on that cash value (once it builds). This should be viewed as more of a tax free retirement vehicle / asset than a life insurance play. Having said that, the opponents of this idea would argue if you only want retirement benefits, there are typically better plays and to only use whole life when you’ve maxed out all the traditional methods. (Think 401k, 529, Roth backdoors, etc) Term life is really only to cover children from when you have them until they become stable self-supporting adults.

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The main case for a permanent life policy is if you’re quite wealthy and already maxing all other tax deferred investment options

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If you keep the policy for 15 to 20 years it’s an OK deal with the tax free investment returns. If you cancel soon it’s a bad investment

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You can sell your whole life insurance policy. They’ll basically just put their name as a beneficiary

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