does it make sense for me to invest in a policy now or wait?

[katmack]

hi i’m a 22 y/o recent college graduate who has been in the workforce for a couple months ths now, and i’m thinking about investing in a Whole Life policy for the cash value.

I’m going back and forth between starting this policy now or waiting a couple years for a few reasons

1) I’m planning on going to grad school in a max of 2 years, and the money I would use to pay for it would go into my policy leaving me to take out student loans w/ high interest + worrying about living costs as I’m planning to go full time.

2) I am not currently maxing out my 401k, Roth IRA, or ESPP, and don’t have investments into mutual/index funds.

My policy would be Whole Life 95 with $1500 premium, allowing PUA till 10k for 25 years, death benefit of $1.2m.

I am thinking it would be best to wait a couple years, finish grad school with minimal debt and then start my policy when I’m 26/27 with a higher earning job as well.

I was hoping if someone could share their thoughts on my situation, and what you would do. Thank you!

 

[williamfrawley1887]

@katmack

My policy would be WL95 10k for 25 years, with a premium of 1500

What is WL95

Do I have this right? Death benefits are $10k with a yearly premium of $1,500?

You could save $10k in 7 years with those premiums. Depending on what WL95 is it doesn't look like a good deal.

Having said that, it's likely the death benefit and cash value will eventually be, worth more than $10k.

If you get it, I highly recommend a rider permitting you to buy additional coverage in the future (typically key birthdays or certain life events).

 

[katmack]

@williamfrawley1887 no my apologies i explained that wrong i have whole life 95 with a premium of 1500, with PUA up to 10k. the death benefit is $1.2m.

 

[kagenonikki]

@katmack WL 95 is a guardian contract, right?

 

[katmack]

@kagenonikki yes

 

[kagenonikki]

@katmack I'm a guardian agent and licensed fiduciary. I own two WL 95 contracts myself. Hard to answer your questions with out knowing more specifics on your cashflow and goals.

Who did you purchase the policy through?

 

[saywhat1]

@katmack It sounds like you're asking if we know when you'll die (or become disabled to the point that no carrier will sell you a policy) so you can decide when you need to purchase a policy.

 

[maxyss]

@katmack No, no, no. Buy $2,000,000 of convertible term for about $100 a month and focus on your studies. And NEVER work with the either unethical or ignorant swine trying to sell you the whole life policy now. Once you are established and working with a net positive income you can start buying some participating whole life (the fully convertible term means you can trade in portions of it for the permanent policy without worrying about health or lifestyle or other qualification issues). It is a piece of the puzzle, it isn’t the only piece and your advisor should be trying to show you the big picture rather than screw you over.

 

[ka__f]

@katmack Op

1) Age is the majority factor for premiums so waiting means they will be more expensive

2) Get a policy to cover you and your current debt; then after you finish Grad School then think about investing in an IUL and overfunding it to generate cash value.

That's my $0.02.

-Andy the Insurance Dude

 

[easternpresent]

@katmack Make sure to consider that it’s going to be more expensive when you are older. You also don’t know what can happen between then and now.

 

[hannahjane]

@katmack Wait. Finish grad school minimizing debt will be a better investment - especially at lending rates today.