Last, but not least, we come to the Whole Life policy. A Whole Life policy is exactly what it says...it is a policy that lasts for the whole of your life. Whole life policies typically do 3 things. 1) Provide a guaranteed death benefit, 2) Provide a guaranteed premium, and 3) Accumulate cash value within the policy. For larger policies, guaranteeing these three variables make these policies very expensive compared to the other alternatives that are available.

Outside of many advanced strategies that offer paid up additions, dividends, and countless other opportunities to accumulate more cash; in our experience the most common purpose for Whole Life policies is to cover final expenses...and most of these policies have a face amount of $50,000 or less. Typically these are the only policies that you can buy for these reduced face amounts.

A common practice that we see on a regular basis is an individual who is using their life insurance as an investment. More often than not, when your life insurance is tied to your investment and your investment is tied to your life insurance you negate the performance of both. If you need life insurance, buy life insurance. If you want to invest, invest. Either way, don't try to navigate these decisions without guidance from a professional.