I'm looking to diversify my portfolio mainly on long term. My financial advisor's/planner's are recommending setting up and contributing to a Whole Life Policy. Looking to see if anyone has personal experiences doing so. Here's a quick backdrop without giving too much information
43 years old-all tax deferred retirement is maxed out annually with most if not all 401K contributions being kicked back to me because of ESOP pushing to and exceeding the cap. I still continue to contribute to 401K however because company matched $0.50 on the $1.00 upto 5%.
On paper with dividends-a whole life policy looks to be a solid long term but would have to remain untouched for 15-20years....Looking for ways to re-invest my kickbacks out of the 401K.

Ask him about an Indexed insurance annuity policy and the pluses and minus to it. If he doesn’t offer an index PM me and I’ll send you to someone that does. I think IUL is better for high wage earners. It’s all better deal then the back doored Roth

The problem I found with insurance annuities is the funds they let you choose from never perform like American, Vanguard and etc funds.

Whole life insurance policies are a terrible investment. You can always do better buying term and investing the difference. Whole life is a huge moneymaker for the insurance company and agent. Also, if not set up right and depending on the face value, life insurance can create an instant estate tax problem.

It’s the tax rate you are trying to avoid

I completely disagree. There is a product available built on a whole life chassis that you can use the entire face amount for Long Term Care. Facts are 1:2 people will use LTC at some point in their life. All of us will die. There could be better returns elsewhere overall but you definitely mitigate risk. Term is good if you have debt to pay for. I have seen hundreds of people in my insurance career that followed the Dave Ramsey approach and were completely dumbfounded when they found out they outlived their policy. The invest the rest virtually never happens.

Like pokerj2, I disagree. It's simply another tool. Not every tool is useful to everybody.

That's a first world issue.

Life insurance should be looked at as burial insurance, not an investment, especially when you are older and near retirement. Buy long term care separately, term insurance separately, then invest and you'll be miles ahead of what some insurance company is trying to sell you. It's pretty simple to verify if you can do basic math.

No, it's a real world issue.

That was more or less the way was presented to be. I can contribute XXXXX for the next 15 years(59yo) let it set and continue to grow until 65yo and then would be able to withdraw XXXXX for the next 20 years tax free.
Proposed numbers were 2.75X of original investment amount compounded with average 6% dividends.

As long as its in Texas it’s not much of an issue, well atleast for a year or two until Fed has is reconciliation of wealth

When I was 47 I bought a 30 year term policy with long term care benefits. Don’t know if I’ll make it to be 77, it’s all a gamble.

The insurance industry's own definition of a dividend is that it is a "partial refund of overpayment of premiums". That should tell you all you need to know.

for the most part, having an estate tax problem is better than not having one. Especially true if life insurance is creating the' "issue".

I completely disagree, it’s a vital to estate planning.

yep

Kind of my thoughts. Even then it can be used to offset some potential taxes

Universal Life with Last To Die payout.

You really really need to compare to an indexed universal policy to a whole life.

Higher returns(potentially).
More flexibility
No SS impact
Tax free gains
Still has death benefits also

Most Whole Life policies are expensive for the cost of insurance when you get middle age or older.......based on what your trying to accomplish you should consider investing the money in low cost ETFs for growth in an individual investment account. Don't fall into the tax trap of deferring tax dollars to retirement.......participate in your work place plan contributing POST TAX contributions, not Pre Tax.........If you look at this arrangement of stuffing tax dollars into your retirement account, your doing nothing more than growing a debt liability without any clear picture of what the cost is your going to pay on that debt.......as matter of fact, your are guaranteeing to grow your debt liability if your grow your 401(k).......When you buy things in life besides groceries, when do you get an option to put the taxes on your IOU account? Especially if they said to you the tax debt could double or triple before you paid it back? You also take away the ability to ever use a loss to offset a capital gain......And you are penalized potentially with higher taxes and Medicare costs the more fully taxable income you spend on retirement.......which is the type of income that distributes from IRAs and 401(k)s.......the only people who benefit from you stuffing all that tax in your retirement accounts are the brokers, insurance agents and financial advisors that sell you investment products for these retirement accounts.......they get paid on the tax money you stuff in those accounts......

Whole and universal life are not for everybody, but they do have their place.

I agree.....it's using the right tool for the task...

The estate tax exemption is 12 million per person - so a couple can have 24 million without estate taxes. So unless you are buying life insurance policies for 12 million your estate is not taxable. Even if it was you can put it into a life insurance trust that buy passes the death benefit being in your estate. So for the vast majority of people life insurance does NOT create an instant estate tax problem

https://alterraadvisors.com/federal...making-the-most-of-historys-largest-cap/

I know there are situations where Roth is the right choice especially for younger investors. I also know now days of the push by planners to get older investors to change their traditional IRA/401k into Roths.

What I always fail to hear from the folks promoting this is the calculation on what the loss of earnings amounts to on the tax money they paid to the IRS before they had to?? Once a dollar goes to Uncle Sam it will never be seen again nor will it ever earn another penny of interest.