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I read a post by fellow IFA (Martin Lee of Promiseland, aka the Lion Investor). Being a personal friend, I respect him in well regard of his views on investment and personal finances.
He recently wrote a piece on Whole Life (insurance) vs Term.
Other than pointing out the opportunity cost of whole life insurance vs term insurance, I wholeheartedly agree with him that whole life insurance is, in my opinion, solely for the purpose of lifetime critical illness protection. Beyond the lifetime protection, whole life insurance offers an inflation hedge to maintain real dollar value protection. Of course, this hedge is only effective as the bonuses (reversionary & terminal) get accrued over time and provided the insurer delivers what has been projected.
Certainly, there will those who disagree and stand convinced that 'buy term (insurance), invest the (premium) difference' works to their advantage. Caveat being the ability to invest at a consistent compounded rate of return over many years.
My point here is not to take sides. Read more...