I'm a big fan of whole life policies, my first investment (and still to this day my best investment) was the whole life policy I bought when I was 21 years old.
It was sold to me by a financial adviser as a "reverse IRA", basically a $2,000 a year premium with a death benefit and compounding tax free cash value. I have no doubts I can retire comfortably just by borrowing from the cash value of it alone if needed. Remember we have no kids and basically no debt, so term life has never been on our radar, this was strictly an investment vehicle.
That said, as you get older they are harder and harder to get to make financial sense. I've tried several times as I got older to buy more of them and the cost of the insurance is just too high to make them work. My policy's cash value crossed the invested amount between years 7 and 8. Every time I tried to buy them after that it was 9-10 years before your cash value crossed past the invested amount and the growth rate was much slower after that as well.
So the trick to cash value policies is...buy them early...and keep them forever. I smile every year when I write that premium check and see how much the cash value of the policy rises...tax free. My only regret is I didn't buy more of them earlier.
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Lance
1985 Monte Carlo SS Street Car
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