Quote:
Originally Posted by MoneyGuy
I sell insurance and make a lot more money if I sell whole-life or UL, but I've never sold a WL policy and have only ever sold one UL policy (the client insisted). I've had this argument with commission-hungry colleagues. Buy term and invest the difference is almost always the best strategy. There are exceptions, as there are to every rule, of course.
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I don't disagree with what everyone else is saying, but there is a problem with term insurance in two ways: (1) that the coverage increases as you're more likely to need it (assuming that you keep it long enough to see those renewals), and (2) it expires at 80. If you need/want coverage through that period then obviously you need something to cover you for your whole life. You can buy term-life coverage though and that is just pure insurance (no savings/dividends/investments) and that goes for your whole life, as the name would imply.
I also rarely sell these other types of policies, but I have had clients insist because they don't want to pay forever, not die and have nothing to show for it. I would also note that I have both; some term to cover off the shorter term issues if I were to die and some whole life because I will have tax/estate issues that are there long after I cancel my term policies. Its true that you can convert those term policies to whole life coverage, but its based on your age and frankly the cost never goes down!
As far as the actual investments in the policy I agree with what everyone else is saying; you can do it cheaper on your own. The advantage with insurance though is that its tax-sheltered. so if you have maximized your TFSA/RRSP, and are looking for another vehicle, this is one way (IMO there are still better ways, but its an option).