Insurance Pro Blog Podcast | Life Insurance and Annuity Insights

If I had a dollar for every time someone asks me is whole life insurance a good investment, I'd have quite a few more dollars in my pocket.  But this is a seriously good question, and I know many have talked at length about it--even us.  

I believe that answering such a question comes down to two basic considerations.  

On the one hand, we have a theoretical contemplation.  This encompasses issues about whole life insurance like its tax free benefits, its versatility, and the security is provides.

Then we have the empirical review.  This is the cold hard data that either accepts or rejects the notion that whole life insurance could be a good (or bad) investment.  

There's a lot to peruse here on The Insurance Pro Blog that addresses the theoretical aspects of if whole life insurance is a good investment.  So today, I want to shift focus instead to the empirical data.  

I hold an insurance license.  That makes me an insurance agent.  This means I sell life insurance.  So yes, I can't claim I'm completely an unbiased source of information.  A disclaimer stating such was one of the first things I published on this blog way back in 2011 when it began.  But this isn't really what I'm looking to disclaim.  Instead I want to focus for just a couple of seconds on the word "investment."

There are some prevailing theories that believe it's a no-no to refer to life insurance as an investment.  Some even suggests there are regulations that explicitly prohibit it.  I'm not here to explain my legal theory on if someone can or cannot refer to life insurance as an investment in varying contexts.  I'm going to note that I'll be using the word "investment" today in a colloquial sense because that's the nomenclature most people assign to "thing-I-use-to-save-for-the-future" and as such it's much shorter and lot quicker than typing "thing-I-use-to-save-for-the-future" for the rest of this blog post.  

Many years ago, I published a blog post highlighting the historical performance of a whole life policy.  Policy details came from a voluntary disclosure found on an internet forum.  

The data on the policy showed that it performed quite well from inception to the current time frame of the discussion.  I reference this blog post often whenever asked is whole life insurance is a good investment, and I believe the numbers tell a compelling story about what can accomplish provided proper execution of a whole life policy for this purpose.  

But, this data is getting a bit aged.  I don't have contact with the individual who shared this data, so sadly I cannot update it.  As the years go by, the weight of this data declines and I'm keenly aware of that.  

So what to do.

My career as a life insurance agent spans over a decade, so I ought to have real historical data on whole life policies...and I do.  

In fact, I have data on my own whole life policies.  

A few weeks ago, I published a blog post that compared the accumulation of cash values in my own whole life policy, versus the results I would achieve if instead I invested the premiums over the same time period in an S&P 500 index ETF.  

Here again, we see that a whole life policy designed to maximize efficiency performs very well relative to a broad stock market investment.  Taking it a step further,