Hylland Capital
The next generation in financial planning

Ask an Advisor Archive

Your Personal Finance Questions - Answered!

“Should I buy Whole Life Insurance”

As a reminder, over these next few episodes, we’re looking at various products that are often sold to savers and investors, and helping you decide whether or not you need them. Yesterday’s episode was on annuities. If you would like to listen to previous episodes, head over to the archives at Hyllandcapital.com/ask

Today’s question is:

“Should I buy Whole Life Insurance”


Transcript - Is Whole Life Insurance Right for You?

I almost guarantee that you have been contacted by a salesman at a company like Northwester Mutual, New York Life, or Mutual of Omaha to buy a whole life policy. There is a reason for that, they are incredibly profitable. The problem is, they are profitable for the salesman!

Whole life is a permanent type of insurance. It will provide a death benefit not matter how long you live, as long as the premiums for the policy are being paid.

However, there is much more to whole life than a simple death benefit. These are often advertised for the cash value that builds up over time, which the policy holders can take a loan out from if needed later in life.

Here’s the problem with whole life. For simply the death benefit, the insurance that whole life provides is much more expensive than a long dated term policy.

So the insurance is expensive, but what about the investment aspect – the cash value buildup? Typically, the investments within whole life grow much less than a diversified investment portfolio.

In the end, we find almost everyone would be better off with cheap term life insurance and investing in IRAs, Roth IRAs, 401ks, etc.

The main reason is that most do not need permanent insurance coverage. Insurance should be for protecting your family should something happen to you earlier in life while your family is dependent on your income. Insurance should almost never be seen as a savings vehicle, and almost never as a way to pass modest amounts of money to heirs.


Like annuities, the industry is full of slimy salesmen hawking whole life policies. If you are being sold a policy, contact us at hyllandcapital.com/ask, and we’ll review that whole life insurance offer for no cost to you.

Matt Hylland