Question from a neighbor:
"I bought a whole life insurance policy as an investment two years ago, someone explained to me that WL is rip off & that you can achieve a much better result with combination of a term policy & IRA's, & this person said I should cancel my whole life immediately."
Answer:
It is true that to accumulate money for retirement, one would probably do much better with retirement accounts then WL, but that doesn't mean that whole life is a bad product or doesn't serve a purpose. A few points to consider:
WL give you protection past the 10-30 years a term policy would give, & at that point it would probably be impossible to insure at a reasonable rate.
The IRA may not reach the face value of the insurance policy for a long time, & would be subject to volatility, additionally there are limits on IRA contributions.
Dividends & withdraws form WL are tax free up to contributions, death benefits are tax free and loans can be tax free.
Since you paid already the first two years you already absorbed most of the cost, the return on additional money is higher.
An individual's needs, goals, risk tolerance &tax status would dedicate the right mix of financial assets that would help them achieve those goals.