Is Whole Life Insurance A Good Investment?

"Is whole life insurance a good investment?" somebody asked me. I was fairly new in the business then and my reply did not convince the person. Life insurance is never an investment in the strictest sense. It is a tool to hedge against untimely death through life or until age 100.

Investment may make you slightly better off than when you started. But with whole life insurance, you are protecting the future well-being of your family. You spare them from paying a high price. They will get your business and assets intact.

Whole Life Insurance
Vs Mutual Fund Investment

A mutual fund is a pool of money invested mainly in stocks and bonds. Stocks represent ownership in a company listed in the stock exchange. Bonds give you the chance to lend money to the government or a company.

A mutual fund has a fund manager who invests the pooled money into stocks and bonds. Investing in a mutual fund lets you buy shares (or portions) of the mutual fund and become a shareholder of the fund.

Whole life insurance and mutual fund are two different things. One protects your family against sudden or untimely death and keeps their standard of living. The other could provide income through return on investment. Putting your money in both will address your protection and investment needs.

Is whole life insurance a good investment then? You already knew the answer to that. Protection and investment are not the same. Treating them separately depends on your needs and priorities.