What are whole life insurance pros and cons?

The pros of Whole Life Insurance are:

1.  Its permenent Insurance for your entire life

2.  It is a very stable product

3.  For extremely wealthy people can be used (often with a lawyer) to help minimize income and possibly income taxes.

4.  It can successfully be used for business life insurance policies.

5.  It is a good tool for people that need to fund a "Special Needs Trust."

The Cons of Whole Life Insurance are:

1.  It is extremely expensive

2.  Its life insurance for your whole life and many people do not need that

3.  It is be quite complex and hard to understand

4.  Insurance Agents make large commissions selling it

5.  It is generally considered a poor investment

6.  It takes somewhere between 10 to 20 years for the invesmtent side of it to make any sense.

7.   In general it is an antiquated product when compared to 529s, Roth IRAs, 401Ks, UTMA accounts, HSAs, and other newer tax defferred and tax free accounts.

The pros of whole life insurance include:

1. Guaranteed lifetime life insurance protection.

2. Guaranteed level rates for the life of your life insurance policy.

3. Cash value that builds up inside your life insurance policy over time.

4. Loans which you may take from the cash value in your life insurance policy.

5. You may be able to use a whole life insurance policy as collateral.

6. Cash value grows tax deferred inside your life insurance policy.

The cons of whole life insurance include:

1. Whole life costs a lot more than term life insurance.

2. With whole life you may not be able to afford the total amount of life insurance you actually need.

Pros - 1) the price is locked in. 2) It accumulates some cash vale 3) You can borrow against that cash value 4) no taxes on the money that you borrow

Cons - 1) You are paying 3 to 4 times more than you would pay for term insurance.

Is it worth it? Maybe. I bought my 4 year old grandaughter a whole life plan and I am funding it. At 21 she can change it to term regardless of her health. Made sense to me.