The myth of “buy whole life insurance vs buy term and invest the difference”

Let’s switch gears a bit.

I’ve been yammering on and on and on for the past couple weeks about my awesome new budgeting methods….

I want to tackle a a multi-headed hydra that just won’t die.

There is this idea floating out there that there are two basic ways of saving money… you either buy whole life insurance or… you buy term and invest the difference.

News flash: Whole life insurance IS buy term invest the difference.

It is comprised of an embedded one-year renewable term policy plus a savings fund. The way we know this is… whole life can be reverse-engineered and deconstructed very easily.

So… we can see its internal costs.

The “magic”, if you want to call it that, is those costs decrease over time compared to a DIY yard-sale-Barbie-buy-term-and-invest-the-difference-in-mutual-funds plan.

Whereas… the separate renewable term plan always gets more expensive, which is why EVERYONE drops the term coverage at some point.

It’s not because “I don’t need term insurance anymore.”

I guarantee if I gave those A.L. Williams fanboys free term insurance for the rest of their life, they would take it.

Moving on.

If you want to discuss the pros and cons of both strategies and get an entirely new perspective on how to save money for the long term that involves whole life, term, AND possibly some investments, then hop on the email list and I’ll show you how.


David Lewis, AKA The Rogue Agent, has been a life insurance agent since 2004, and has worked with some of the oldest and most respected mutual life insurance companies in the U.S. during that time. To learn more about him and his business, go here.