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Investing - Theory, News & General • Well well written critique/analysis of Whole Life by the FTC from 45 years ago

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Hi all, I was doing some reading/research on a new term I came across related to whole life plans ("surrender cost index") and stumbled across a report by the FTC from 1979. I found it to be a VERY nicely written summary of the problems with whole life, which apparently are the same problems such insurance polices have had since the 1800s!

Here's the link: https://www.ftc.gov/sites/default/files ... cecost.pdf

I figured I'd share it, because it may be a great document to point people to when such discussion arise. The main points are well known to BH regulars who discuss/advise on whole life. But there some additional data I thought was interesting. For example, an analysis at that time of how many whole life policies are surrendered early, and the very wide variance on the cost of similar policies, where the advice was to SHOP AROUND. I also found the graph (below) a nice way to summarize how whole life policies work (or rather, don't) as a long term investment.
What is important is that in far too many instances consumers who use cash value insurance as a way to save receive a rate of return which is substantially below what is readily available in the marketplace
And
Our study of this industry discloses that American consumers are losing billions of dollars yearly as a result of-ill informed and inappropriate life insurance purchase decisions.
Has much changed in the past 50 years?

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Statistics: Posted by neurosphere — Mon May 27, 2024 12:07 pm — Replies 1 — Views 253



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