Hey, this is Brantley Whitley and Brandon Roberts from theinsuranceproblog.com
That's Brandon waving at you right now. Today we want to talk to you about a question that we're asked probably, I don't know, at
least a couple of times, a half dozen times a month or so, through email, through our
voicemail, through comments on our blog, and that is, is whole life insurance worth it
So a lot of people have heard a lot of things about whole life insurance from all sorts
of sources that talk about using it as your own financial institution, let's call it that
and a lot of other people have heard that whole life insurance is always a bad deal
So the question that we want to address today is, is whole life insurance worth it, Brandon
Brandon is drinking coffee while he should be talking. And trying to plug predictable topics at the same time
It's backwards, it should read backwards. Oh, backwards? Hold on. I came prepared for that because I know sometimes the camera reads..
Brandon, you're a life insurance agent, you're supposed to be able to write backwards. Is it good now
How do you do that? That's magical. Well, see, I kind of knew I was going to make that joke, and I know that sometimes the camera
shows it one direction versus the other, so I came prepared. So, insuranceproblog.com slash predictable topics
Yeah, he's plugging our book. Someone's going to pay the bills. That's right
Is whole life insurance worth it? Buy the book and find out
No, we'll let you know now. So I think the big question that comes up, kept framed in this context, is there's a
lot of information out there. And life insurance is a little obtuse because it comes with its own set of words
And as a result of all that, people start to get bogged down, and they start to think
is this even worth doing? Right. Is this even worth figuring it out
Because it seems complicated, and I think I'd rather just do something simpler
So maybe whole life insurance isn't worth it. But our position on that is, oh, it's worth it, all right
And we have gone through the lengthy process of finding just what is so great about it
And not only that, but receiving validation from the people who took a chance on it, so
to speak, or who decided it was worth it, and have come to really, really love it
So in the beginning of a lot of insurance agents' careers, they talk really conceptually, right
They read the manual, they read the brochures, and they say, it sounds really great, so here
it is. But they don't have a lot of historical validation. That's not you and I anymore
We've been around the block a time or 10, and we now know from pretty, pretty strong
evidence that whole life insurance is extremely worth it. Yes, absolutely. Well, from the eight years that theinsuranceproblog.com has been around, we've worked with, I don't
know, these are statistics, I always try to quote statistics when we're doing videos and
doing podcasts without doing research beforehand, because that's just the kind of people we are
We've worked with hundreds of clients, and we've probably talked to thousands of prospects
So we've looked at many thousands of insurance illustrations, proposals, financial plans
all of the above. Years. And I can say with 100% certainty that of the eight years that you and I have worked
together, and we both have been in the industry longer than just the last eight years, but
in the eight years that you and I have worked together, and with the clients that we've worked with that have come to us through theinsuranceprogram.com, there's not been one single instance of a
person coming back to us years later and going, oh, this was a terrible idea
No, and not only that, but there's been a number of people that are not clients of ours
people we've never sold anything to, who meet us and we talk about life insurance, specifically
whole life insurance, and we run into stories of people who are just fantastically happy
with their whole life insurance policy. And... I'm sure most people run away when they find out there's whole life insurance
Oh, yes, they do. But I think that the biggest regret that people who buy whole life insurance come to have
is that they didn't get more of it. Right, right. And we have sat on boatloads of historical evidence
We published an article in the Insurance Pro Blog, oh, five years ago or so, that chronicled
the success that somebody had with a blended whole life insurance policy, but in the early 90s
And the rate of return that this individual achieved on his policy was like 7.5% year
over year. Right, right. And we even also chronicled an individual who bought a non-blended whole life policy
decades before that particular blended policy and shared his numbers in a comment to an
article written that sort of paid a lot of back when we complimented whole life insurance
And his non-blended whole life policy issued by an insurance company that would not be
on the top of the list for top whole life companies achieved a 6 plus percent rate of
return year over year. Yeah. That policy was issued by a company that's much more famous for writing car insurance
and homeowner's insurance. Yeah. They're a good neighbor. And they have Jake
Yeah, they do. They do. Jake will hook you up. And we've seen it with the policies that we have actually written
I mean, we've now got some pretty good years behind us for people who have purchased certain policies
And they've all done well. Yeah. They've all done well despite declining dividend interest rates. Right
There's many people who bought whole life insurance from you and I who have achieved
results that are a little bit less than anticipated to be from the original purchase because of
the reduction of dividend rates. That's that's been the overall trend of the industry because that is the trend of
the debt market, bond market, which is where the majority of life insurance investment
income is derived. And despite that, the reduction isn't substantial. And the one thing that these people all look at and remark on is even with that slight
reduction, it's been incredibly reliable. Yes. There's not been any sort of substantial reduction
There's never been a moment where they opened up their statement and got a really big surprise
It's it's really, really reliable. It's really, really consistent. Right. Right. Well, one of the things that I wanted to bring up in particular is and I told you this story
for the minute. Brandon and I have known each other for eight years. So there's nothing that I say that he hasn't heard at least five times and and likewise probably
But you were talking about, you know, meeting people who who will will out in public, probably
in social situations and always tell the story about going through a going through a summer barbecue
And and I met this older guy who's probably now in his if I had to guess, he's in his
mid 70s at this point. So the time I met him, he was in his early late 60s, early 70s
And and he owned a couple of what I would call sort of midsize manufacturing operations
And he had done he found out I was in the life insurance business and he was interested
which is unique because most people run away. Brandon and I always joke
Telling someone you're in the life insurance business is usually a good way to end the conversation
So you ever just meet someone you'd like in the conversation with just tell them you've
got a license. So that's that's a free tip. Anyway. So this guy, we'll call him Tom, protect his identity
But Tom proceeds to tell me about all the things that he's done with money over the years
You know, he's bought property. He bought commercial real estate. He's invested in self-storage properties
He's trying to think of some of the other things, timberland, you know, trees that could
be harvested, all sorts of various things with the money that he's taken off the table
from the businesses that he owns. But he told me he was like, you know, I bought these whole life policies from this company
years ago. The agent tried to get me to buy more at the time
This was I think he said in his early 40s. So probably about the time he was actually starting to make some money
And and he the agent tried to get him to buy more and he didn't
And he was like, of all the things I've done, really nothing has worked out as well as the
whole life. So that is like not in terms of he wasn't he wasn't talking about it in the rate of
return realm. I mean, we're not being completely unrealistic about the rate of return
You hear it here first, whole life insurance makes better returns than any other investment
option you can see. That's right. I hope so. Brandon Roberts said that, by the way
So, yeah, so it wasn't that. But he was just talking about the stability of it
And a comment that he made, and I'm paraphrasing because this was a conversation a long time
ago, so I'm probably a few words and changing things around. But he made a statement to the to the effect of I never would have put that much money
away in something that stable had I not had a premium that was due that had to be paid. Right
So I hate using the term forced savings because that's something that the life insurance industry
has been using for years. And it sounds horrible. I mean, no one likes to be forced to do anything
But there are times that we can set up. You and I talked about this before
There are times that you can set up little tricks or hacks to get yourself to do things
you wouldn't otherwise do. Well, on the subject of forced savings, because there have been people, me included, who have
criticized the forced savings idea, which is touted by the life insurance industry as
a unique benefit of whole life insurance specifically. And I would say that when I was when I was new to the industry, and even really not so
new, I I would clap on the idea of the forced savings aspect, because my view on it was
we're adults, we need to be responsible and safe. Sure. Thanks. Automation is a wonderful thing
Yes, it is. And you don't always appreciate that when you're inexperienced. Right
And you start to gain an appreciation for that as you as you sort of grow up and learn
that the world is a really big and complicated place. And mom's not around to make sure that you actually took care of the stuff you were supposed
to take care of. Right. So it's it's really nice to have things that you're sort of forced into doing
And you don't have the option. Right. They're willing to opt out of them
I always use the example of mortgage payments. I mean, no one no one when it's not optional
It's funny how you come up with the money at the on the first day
And so we can we can talk about the virtues of responsibility and and good behavior and
all of that stuff all we want. But the truth is, everybody gets busy. Right
Everybody neglects to do certain things. And and the bad part is, if there's really nothing that holds your feet to the fire
right, you sort of fall off the bandwagon. Lots of times you don't get back on it
So if you have a savings plan, but something comes up, and you suspend the savings plan
there's a wildly good chance you won't get back to it. Right
It doesn't mean you're a bad person. It doesn't mean that you have no responsibility
It just means that you have other things going on. Yeah. It means you're normal
I mean, I got a phone call the other day from the Mrs. letting me know that the electric
bill at another place that we have for some other things that we talked about was past
due and they were going to turn the power off. They were going to let her know that. Yeah
They they called the letter, know that we hadn't paid the electric bill and they were
calling to let us know that we were coming up against a date where they were going to shut the power off
So what I did, I went online and I paid the bill. Why didn't I pay it before
Because I've got a million other things going on. I forget about. Yeah
These things happen. Yeah. So if something as meaningless as the Powell bill can get skipped, it's very easy also
to forget other things that are going on in your life. Yeah
And there's a real difference between the only thing that makes the power bill absolutely
get paid is the fact that we kind of need the rights and everything else to work there
every day. So if that's going to get cut off, we're going to make sure that we bring that current
But if there are other things that are going on and you kind of neglect to put the money
away into the savings account, there's a good chance that you're going to find other things
that you need to do because others. Oh, absolutely. So as much as as some bloggers out there and I at one time wanted to poo poo on the idea
of forced savings. I'm here to tell you that that time has gone on and I have gained a little bit more perspective
on that and I no longer wish to malign that idea. Well, it's worked
Has it not worked for you in your own life insurance? Exactly
There's lots of money in there now. Exactly. Let's go back. I want to I know we need to wrap up the video, but there was something else
There was another point that I wanted to make about we called the guy who had the whole
life insurance policy, the traditional whole life insurance policy from the Good Neighbor company
We call him Jim. We don't know what the guy's real name was, but we're just calling him Jim
Over time, he achieved something like by your calculations, a little over 6 percent rate
of return. Right. So and this was a policy that was not blended
Can you explain what the difference there just real briefly? Because I think it's important for people to understand the results
I'm not saying they're going to be better with a blended policy, but let me rephrase that
I'm not saying they're going to be better than Jim's non-blended policy. Jim bought his policy at a different time and different rates for different interest
rates are much higher. That sort of thing. But buying a blended, if you're going to buy a whole life insurance policy today, that's
worth it. It's actually worth owning. Blending is going to be a crucial component of that equation
And so can you talk real briefly about policy blending and what in particular makes that
what in particular about that makes, is a feature that makes whole life insurance worth owning
Blending significantly brings down some of the costs associated with whole life insurance
and permits policy holder to exercise some flexibility with a feature called the paid
up addition slider that allows that individual to make the policy much more cash rich. Okay
Sometimes, sometimes what we refer to as over funding whole life insurance in many ways
That's a very generic term. Blending opens up the door to over fund a whole life policy like never before. Right
And that typically relies on the use of term insurance and the use of the paid up addition
slider inside of a whole life insurance policy. Not separately because a lot of people will get confused, right
Well, I got to buy a term insurance policy. No, we're talking about it all combined into one place
Copy out and tour, it's not the same at every single life insurance company
So you have to have some understanding of how to navigate those waters
You can always reach out to a well seasoned professional who understands that idea, who
has written countless articles on that subject for eight years. I don't know where exactly that would be, but you know
Maybe I'll look at the insurance pro blog dot com. There you go. And I should also mention that we recorded a podcast on this topic some while, gosh
a year or more ago, I guess at this point. And there is the written blog post that you referred to
I'll put the link down in the description here in the YouTube video so that you can
click over and read that if you want to. Yeah. There's more information about Jim's situation there and some other thoughts that we have
surrounding that. That is, sometimes going over specific numbers and numbers that are in charts is difficult
in talking. So it's better to go over and take a look at those
All right. Any other thoughts before we wrap up? I think that's probably good for today
All right. Well, I'm Brantley Whitley and that other guy is Brandon Roberts
You can find us and more of what we say and write about over at the insurance pro blog
dot com. Thanks for watching this. I don't remember which one was right, so I'm just going to hold this one up
And don't forget to head over to the insurance pro blog dot com forward slash predictable
profits or you can come over to the insurance pro blog dot com. You can type it
Predictable profits or it does our product page. It's everywhere. You won't have trouble finding it if you want to learn more about whole life insurance
And in particular, if you're an agent, you want to learn how to sell more predictable
profits can help you do that. Thanks for joining us and we'll see you again real soon