Reasons to Consider Whole Life Insurance as Part of an Overall Financial Plan

The appropriateness of whole life insurance as part of a financial plan is based on many factors including the individual's financial goals, the extent to which they value the various benefits of the policy, what other financial products they have in place, their age and health, and which insurance company they try to obtain the policy through.


Whole life insurance may be more appropriate for those who:

• Wish to have a death benefit paid upon their death, regardless of when that may be
• Such as a certain bequest to be made in cash to a family member or charity upon their death
• Anticipate having a liquidity need upon their death
• Such as for potential future estate or inheritance taxes
• Value the living benefits offered by a whole life insurance policy, which may include:
• Tax-advantaged distributions from the policy to supplement retirement income
• Taking a loan out from the insurance company using the cash value as collateral
• Tax-advantaged distributions from the policy to pay for long-term care expenses
• Are young and in excellent health at the time of acquiring the policy
• Obtain it from a reputable insurance company
• Are able to stick with a long-term plan
• Are in a high marginal tax bracket and have already fully utilized other tax-advantaged accounts such as Health Savings Accounts, 401(k), 403(b), and Individual Retirement Accounts

Conversely, whole life insurance may not be appropriate for those who:

• Have no need or desire for the permanent death benefit or living benefits of the policy
• Are older or are in poor health, and therefore may only obtain a whole life insurance policy at unfavorably high premiums, if at all
• Cannot stick to a long-term plan
• Buy it from a non-reputable insurance company
• Have not already maximized their usage of available tax-advantaged accounts

If you are a prospective client and would like to learn more about hiring us for a financial consultation, where, among other things, we would help you assess the appropriateness of various financial products such as whole life insurance to your particular situation and goals, please visit our Schedule Meeting page.



Mike McErlane, DO, MBA, CFP^®, CFA^®, RICP^®, EA, MCEP^®

Mike McErlane is the owner and founder of Comprehensive Financial Planning for Doctors, LLC based in Frisco, Texas.

Comprehensive Financial Planning for Doctors, LLC (CFPFD) is an Investment Adviser registered with the Texas State Securities Board.  Registration of an Investment Adviser does not imply any specific level of skill or training.  CFPFD only transacts business in states or jurisdictions in which it is registered or exempt from registration.  A copy of CFPFD's current disclosure brochure is available through the Securities and Exchange Commission's Investment Adviser Public Disclosure website at www.adviserinfo.sec.gov.

The opinions and analyses described are subject to change at any time without notice.  Any information is considered general and is not intended to provide any specific advice or recommendations.  Your use of the information is at your sole risk.  You should consult with your financial advisor, attorney, tax advisor, insurance agent, or other professional advisor before taking action on any information or implementing any strategy.