Do i need life insurance (term, whole) at 35?

Question

Hi everyone, I recently learned about whole life insurance and its ability to accumulate cash value over time (after at least 10 years). My current situation: - I’m a healthy 35 years old.  - I don’t have kids, only mortgage debts, which are covered by renters. - The houses are under my personal trust fund. - I’m looking for ways to grow my cash. Currently, I have investments in stocks, a self-directed IRA, a 401(k), and real estate. I’m wondering if life insurance is necessary for me since I don’t have heirs or siblings

Aaron Raffaelli · Answer

Be careful of the brokers on here, Whole life has always been a scam and you will never find someone who cares more about your money than you do. Term life is the way to go if you feel like you NEED life insurance, but other than that steer clear.

Tony Wilcox · Answer

If your goal is just to grow cash and not worried about passing down debt to your family, I would say a WL policy is not what you would need. IT can gain cash value but as Jeff is stating it takes about 10 years for there to be any benefit. Better off investing in the market in my opinion.

Aaron Raffaelli · Answer

Be careful of the brokers on here, Whole life has always been a scam and you will never find someone who cares more about your money than you do. Term life is the way to go if you feel like you NEED life insurance, but other than that steer clear.

Diane Laizure · Answer

Hi Tran - There are multiple reasons why someone like yourself would want life insurance. I would be happy to discuss them with you. Best, Diane

Thomas Rutkowski · Answer

It depends on whether you want the coverage to last a lifetime or not. Term is cheap, but its covering your younger years and provides protection against an early death. Whole Life is just that: you'll have it for the rest of your life. It WILL pay a death benefit some day.

I specialize in Maximum Over-funded policies. These are policies with the lowest possible Death benefit, fees, commissions. They have the highest Cash value accumulation. Most of my clients are real estate investors that leverage their Cash values to put their money to work in two places at one time. This results in significantly greater wealth accumulation over time.

Thomas Rutkowski · Answer

It depends on whether the policy is designed for Cash value or for death benefit protection. You are probably thinking of a policy that is designed for death benefit protection (ie max Death Benefit for the premium). Policies designed for Cash value have much smaller commissions.

Max-funded policies also do not take 8-10 years "for there to be any benefit". My clients begin leveraging their policies immediately. It all depends on how much premium the client puts into the contract. Put in $100,000 and you can get a loan against the policy for about $85K immediately.

Jeff Hamann · Answer

Whole life insurance, in my experience and opinion, is not what it's often purported to be. Brokers that sell whole life often get huge huge commissions for their sales and so from my experiences brokers do tend to push them pretty hard, even when they're not a great fit for the huge majority of people.

The cash value doesn't grow fast at all, and you'd almost certainly be better served investing that cash into more of your other assets or even just into Treasury bonds.

Not investment advice, just my opinion.

Thomas Rutkowski · Answer

Only true for a normal life insurance policy. Most real estate investors use maximum over-funded policies. These have lowest possible fees and commissions. Approximately 85% of the premium goes to the Cash value. And the Cash value grows tax-free at about 6%. That's pretty respectable considering how safe and principal protected it is. Mass Mutual just announced a 6.6% dividend.

Tran Duong · Answer

@Jeff Hamann thank you Jeff 😊

Do i need life insurance (term, whole) at 35?

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