390: Why Your Whole Life Insurance (Probably) Won’t Ever Profit
BiggerPockets Money Podcast
Is Insurance a Bad Deal?
Bob Greene: People need to understand insurance is a bad deal. He says on average, you will always come out behind buying insurance. "I'm not saying don't buy insurance when you need it, but recognize that it's a bad deal for you"
Is whole life insurance a scam or a worthwhile investment? You may have heard us talk about whole life insurance before, but we’d bet we’re not the only ones mentioning it to you. Your financial advisor, business partner, parents, or fellow investors could have also let you in on the “amazing benefits” that only whole life insurance can provide. But how much of this is fact, and how much is fiction? And, if whole life insurance is such a bulletproof investment, why not buy a policy right now instead of investing for retirement?
We brought on Dr. Jim Dahle, better known as, The White Coat Investor, to explain the truth behind the whole life insurance system and whether or not it really is a scam. Jim started his financial education during his medical school residency after realizing that almost every financial professional was trying to take advantage of him. Whether it was a real estate agent, financial advisor, or accountant, Jim felt like he couldn’t hold his own when in casual conversation with them. So, he beefed up his knowledge of investing and finance and started The White Coat Investor to help doctors, just like him, make sense of their cents.
Early in his investing career, Jim spent over seven years paying into a high-priced whole life insurance policy, only to realize that he made a negative return. Now, he’s here to educate EVERY investor on what whole life insurance really is, who truly needs it, and the MASSIVE commissions salespeople make when selling you a policy. If you have whole life insurance, you NEED to hear this. And if you don’t, you’ll now understand why it’s pushed so hard on everyday Americans.
In This Episode We Cover
Whole life insurance explained, and the real benefit of having a policy
Term life insurance vs. whole life insurance and which is better bang for your buck
Sales commission schemes and why whole life insurance policies are so expensive
The situations when a whole life insurance policy makes sense (and when it DOES NOT)
The “infinite banking” illusion and why this capital-raising tactic isn’t as clever as it seems
Rebuttals to make next time your financial advisor pushes a policy on you
Fee-based vs. fee-only financial advisors and which have your best interest at heart
And So Much More!
Links from the Show
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Check Out Mindy’s 2022 Live Spending Tracker and Budget
Money Moment
How to Find the Best Possible Certified Financial Planner (CFP) for Your Needs with Kyle Mast
Everything You Never Wanted to Know About Life Insurance (But Absolutely Need To)
Why All Real Estate Investors Should Have Solid Life Insurance Coverage
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-390
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