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The life insurance retirement plan isn't necessarily a specific “plan” that accomplishes a specific goal related to retirement planning. Instead, it's a “tip of the hat” to the fact that life insurance will accommodate strategies that focus on retirement income.

It does this because of the versatility that cash value life insurance provides.

The idea of a life insurance retirement plan gains popularity with each passing day as people seek out alternatives to hedge more traditional approaches to retirement planning.  That's not to say that the more traditional ideas are wrong.

I certainly do not mean to suggest such. Instead, the use of life insurance for retirement preparedness works as a complement to absorb the vulnerabilities investment strategies like passive index investing possess.

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The decision to cancel whole life insurance is not always an easy one.  We understand this.  We've discussed this subject with numerous people.  The biggest concern is still the money already paid to a whole life insurance policy.  The gist of the conversation goes something like “I already paid the premium and if I cancel I won't get that money back, so perhaps I should wait until I at least break even on my bad whole life policy before I cancel it.”

I completely understand the emotional pain tied to exiting when the money received equals some number less than the premiums paid.  It's a loss and not one you can claim on your taxes.  But perhaps focusing on this loss is precisely what the insurance company wants you to do. Possibly focusing on this loss creates more significant losses you never thought about.

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A life insurance illustration is a tool that agents use to detail the various features of a proposed life insurance policy.  These rather lengthy documents contain a lot of information and sometimes delineate information with multiple ledgers that differ slightly from one another.  Today we are going to discuss why these different ledgers exist and what the insurance company is trying to tell you with them.

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Should I buy whole life insurance if I'm young and have no dependents?  This is a question that we field more often than you might think, so today we want to address this question for those who might be thinking the same thing.

It'll come as little surprise that we are more open to answering this question with a yes than pretty much any other website that focuses on personal finance related information.  Our view on whole life insurance comes from experience as things actually happen in the real world, for real people.  Also, I'm going to use “whole life insurance” a lot throughout this blog post but the same theory applies to universal life insurance.

We simply find more people ask us this question framed through the lens of whole life insurance and I'm trying to keep things as simple as possible for this discussion.

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If you spend any time looking around this site, you'll find plenty of content detailing the various features of whole life insurance.  We've detailed at length the use of whole life insurance specifically for its ability to accumulate cash value that the policyholder can use while he/she is alive.

But we do not refer to whole life insurance as an investment.  This causes some confusion among people (both professionals and consumers) so today I want to take some time to explain why we don't often refer to whole life insurance as such, but you can choose to think of it in whatever way works for you.

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What drives annuity buyers?  I mean with all the negative press about the evils of annuities, what on earth possesses these people to actually pull the trigger and purchase an annuity?

Let's not forget all of the other options available to Americans.  It seems despite the negativity and the plethora of alternatives, people still opt to open up annuities or continue flexible premium payments to the contracts that allow them.

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Whole life insurance dividends are a fun subject we discuss quite regularly.  But a more obscure and advanced topic on this subject is the way life insurer adjust dividends (if at all) whenever a policyholder takes a loan out against a whole life insurance policy.

We refer to this concept as dividend recognition–it's a reference to how insurers “recognize” loans and treat dividends accordingly.  There are entire sales systems dedicated to one of the two dividend recognition styles and for years much debate took place trying to establish one as superior to the other.  Today I'll detail everything you need to know and give you the background you need to figure out how–if at all–this matters.

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Buy term and invest the difference is an academic argument that suggests you should skip the “expensive” whole life insurance et. al. and instead by “cheap” term insurance.  You should do this because it will free up financial resources to then invest in the stock market, which will produce more money for you than the cash value build-up of a whole life or universal life insurance policy.

The idea originated several decades ago around the time mutual funds (as we now know them) first arrived on scene and were available to the public at large (keep in mind that at that time the public at large meant mostly wealthy people).

Despite being picked up by a host of financial bloggers and media types, cash value life insurance continues to maintain a strong position in the financial lives of many Americans.  Additionally, we showed data years ago that invalidates a key buy term and invest the difference claim that most people don't need life insurance when they get older.

We recently revisited this subject reviewing new data on the subject.  Spoiler alert: BTID still can't substantiate with empirical evidence.

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We've all seen articles chronicling the woes faced by policyholders who own universal life insurance.  The names change, but the theme tends to remain the same.  Joe insurance purchaser bought a universal life insurance policy years ago and recently learned that the premium he paid for all these years wasn't enough to keep the policy in force.  Now Joe must make significant increases to his premium or else forfeit the policy leaving him with zero death benefit despite years of premium payments.

This unfortunate circumstance has hit all too many past purchasers of universal life insurance, and I suspect many more are awaiting a reality similar as they sit on policies purchased years ago with low-balled premiums used mostly to compete on price against some other product such as whole life insurance.

But recently we saw a shift on this discussion.  For years it was the niche financial media and us squawking about this problem and trying to offer up insight on how it happened and how you–if you own universal life insurance–can shield yourself from this cruel reality.  Now, we've gained an ally in the way of a regulatory body, the New York Department of Financial Services (i.e. the Department of Insurance).   

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Buying whole life insurance or universal life insurance as a cash accumulation tool or even because you want a permanent death benefit requires you to make a long term commitment to the life insurer.  Even buying term life insurance commits a rather lengthy attachment to a life insurer.  It's understandable that anyone would want to ensure as much as possible that the company he/she chooses will be around and able to uphold its end of the bargain.

So with this in mind, should you skip past the little guys and head straight to the larger life insurers out there?  Or does the size of the life insurer matter with respect to longevity and delivering on promises?

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