what do yo uguys think

[CBRChick]

Originally Posted by BrianR6

this is obviously a whole life policy, the premiums are much higher, dont know when he first was issued the policy, u also dont know what kind of riders he has on it. dont see how you can judge if the premium is too high or not.

Well.. if I'm getting more coverage... for less money.. that I would think that his premiums are too high... and if it is a whole life policy, then he is in one of the worst financial insurance products available. It's never a good idea to to invest money in life insurance because the returns are horrible and none of the policies perform as projected.

Want an example?

If a 30-year-old man has $100 per month to spend on life insurance and shops the top 5 cash value (which includes whole life) companies, he will find he can purchase an average of $125,000 in insurance for his family. The pitch is to get a policy that will build up savings for retirement, which is what a cash value/whole life policy does. However, if this same guy purchases 20-year-level term insurance with coverage of $125,000, the cost will be only $7 per month, not $100. So... you would think the other $93 of his cash value policy is going toward savings... nope!

All of the $93 per month disappears in commissions and expenses for the first 3 years. After that, the return will average 2.6% per year for whole life, 4.2% for universal life, and 7.4% for the new-and-improved variable life policy that includes mutual funds, according to Consumer Federation of America, Kiplinger's Personal Finance, and Fortune magazines. The same mutual funds outside of the policy average 12%.

Worse yet, with whole life and universal life, the savings you finally build up after being ripped off for years don't go to your family upon your death. The only benefit paid to your family is the face value of the policy, the $125,000 in the above example.

The truth is that you would be better off to get the $7 term policy and and put the extra $93 in a cookie jar! At least after 3 years you would have $3,000, and when you died your family would get your savings.

But ... you're right... I have no idea how I would think the premiums are too high.