I just saw a "financial planner" (works on commission) who recommended whole life as part of my financial package. I read the literature and it looks good. My upbringing tells me that this is not a good financial instrument but it seems to fill a need for insurance, asset protection and some growth of cash value. I just want to make sure that it's as good as it looks and what are the downsides.
Thanks

Zip Code: docscott358@pol.net

Whole Life insurance can be used to help physicians accomplish a variety of financial goals. In addition to death benefits, Whole Life can be used to accumulate wealth, provide assest protection, and allow you to unlock many estate planning and wealth distribution strategies that are simply unavailable using Term Insurance.

If you include a "waiver of premium" rider on the policy, it can also provide you with additional disability benefits. This is important as most physicians are capped at a maximum of $10,000 or $15,000 per month on their disability insurance policies (depending upon medical specialty and state of residence).

You should note that if you are considering Whole Life Insurance, you should look to buy it from a Mutual Insurance Company that is "owned" by its policyowners.

These companies are committed to the Whole Life product and their policyowners (not their shareholders in a stock company).

These companies would include New York Life, Guardian, Northwestern Mutual, and Massachusetts Mutual.

There are differences among the products that they offer and the policy should be set up to best suit your individual needs and help you accomplish your goals.

Finally, make sure that you purchase the correct amount of death benefit first - even if some of it is term. Remember, if you health changes, you might not qualify for additional life insurance at any price. If you need to purchase some term, you can always "convert" your policy down the road (regardless of your health) as your income and disposable income rises.

If you have any questions or require additional information you can always email me directly.

Hope this helps-

Larry

Zip Code: lkeller@physicianfinancialservices.com

Insurance agents get a lot more commission from selling whole life when compared to term. To me it does not seem like the best investment for you money as you will surely earn little or no interest on your investment. It has some role in asset protection, but to me FLP's and trusts are better instruments.

Zip Code: dr_ericmiller@yahoo.com

Eric-

You are correct in stating that "Insurance agents get a lot more commission from selling whole life when compared to term".

However, it is not based on the percentage of commission being higher - it is simply based on the premiums being larger. In fact, the commission that an agent earns on a term insurance sale (on a percentage basis) can be substantially higher compared to Whole Life Insurance.

While life insurance does play a role in asset protection, it should certainly not be the only reason that a policy is recommended or purchased.

As for your statement that "it does not seem like the best investment for your money as you will surely earn little or no interest on your investment", that is simply not true.

In fact, by properly coordinating and integrating whole life insurance with other assets (including those in FLPs) you can enjoy increased access, flexibility, and control over your wealth throughout your lifetime. This culminates with retirement options that may otherwise not be available.

It is for these reasons that whole life insurance should be the heart of a physician's financial plan.

Larry

Zip Code: lkeller@physicianfinancialservices.com

Larry is absolutely correct. I have said basically what he did in some other posts some time ago.

Whole life insurance is a VERY misunderstood financial tool. When laid out in an apples-to-apples comparison with other basic financial products, it compares extremely favorably. In many cases, its guarantees will outstrip those of riskier invstements.

Whole life is also many times sold for the wrong reasons by people who don't understand its power.

Don't be turned off by a commissioned product, though. ALL financial products have some sort of compensation attached to them in some way, either directly or indirectly. The insurance industry is just out there in the open for all to see rather than buried in a prospectus.

Larry seems to get it, though. You might want to send him the plan the other guy put together for a second opinion.

Jim B.

Zip Code: jboylecpa@yahoo.com