Hey, looks like you're new here! I blog about money. Saving, investing, insuring, getting, and using it! See my "about me" page for more info! To keep up to date, you may want to subscribe to my RSS feed or get the blog in your email! Thanks for stopping by!

I have a $500,000 whole life insurance policy with Hartford Mutual that I pay $200/month to keep up. $8.50 goes to the administrative fee, $100 for the actual coverage itself and the remaining $90.00 goes into the mutual fund. I’ve had it for about 4 years now and I have almost $8,000 in the mutual fund ITHAX which, by my recent inquiry wasn’t directly based on that number, but didn’t have an exact number as to how that $ was being divided; another one of the reasons I’m starting to follow up on my investments!

But based on my first payment to them in 2004, I have paid $7380 to them and the balance is at $8103 today meaning I have made $723 from them in the 4 years there, a measly $181 per year!

I wanted to get into saving when I was younger and it sounds like I may have been roped into the Whole Life insurance that I don’t need. 80% of that $ goes to the Advisor that sells it to you in the first year and maybe 2 years. So really I have only been making money the last 2 years. The expense ratio is 1.18% so that knocks it down even more - Dear God, what have I done!

But I HAVE read that it isn’t a bad investment if you get into it young - I have $100,000 policies out for my 2 kids and that only costs me $25/month. The pros are that the premium is never going to change, so the kids will have those policies forever and they’ll do nothing but grow (unless the world ends) - similarly, my $200/month policy won’t change either, and it is approaching 500k. In 30 years, I imagine it’s going to be around a million+ - so IS it really a bad investment? I’ve stumbled through the first 4 years (which are supposed to be the “bad” years of the Whole Life Insurance phase, so what now? Is it worth it?

I’ve read pros and cons to the situation all over, mostly cons unfortunately. One of the best cases are from CNN Money which says on: http://money.cnn.com/magazines/moneymag/money101/lesson20 plenty on it - and how to shop for what you need. I highly recommend anyone take a look at it -

So the next question is what do I do about my policy now? Do I stick with it? It IS making me $ on my investment, which is good, but people say that I can put it elsewhere. It costs me money to cancel the policy and I can bet my bottom dollar that I’m going to take a chunk off that amount if I cancel the policy. Is that worth it?

I can afford the insurance at $200, and it will never go up on me, but my policy DOES increase in value. I orignally bought a 450k policy on it, and it is pushing 500k. What’s a guy to do?

Another interesting article is: http://www.jsonline.com/story/index.aspx?id=354597, which says:

“In sales presentations you tend to put everything in the best light,” Zickert said. “The idea of buying life insurance to gain wealth can work very well, but you have to make sure (the money for the premiums) is excess money you don’t really need.”

and that makes sense as well - where does that leave a person? Does anyone reading this invest in any life insurance, any ideas/suggestions?

Popularity: 3% [?]