本文发表在 rolia.net 枫下论坛cash-value insurance is generally a poor investment.
It is a very costly way to invest.
1) the cost of the insurance protection itself - which is usually more expensive than what you would pay for a regular term insurance policy.
2) the marketing and sales commissions.
3) "surrender charge" that may be levied if you decide to drop your policy within the first 10 years or so. The amount of a surrender charge varies by insurer and type of policy, but it is not uncommon for it to exceed the total amount of your first-year premium.
4) on top of all that, there are annual investment fees. Those are not broken out in all policies, so it's often hard to determine how much you're paying. In policies where they are disclosed (typically variable life or variable universal life policies), however, they can be substantial: 3% or more, year end and year out.
The heavy fees involved with cash-value life insurance can really drag down your returns. Especially when you consider that index mutual funds often have annual expenses under 0.5%, and many actively managed mutual funds charge 1% or so. That's a lot less than the 3% or more you'll pay for the investment component on a cash-value policy.
The lesson: If you need life insurance, get term insurance. If you want to invest for retirement, invest in retirement plans.更多精彩文章及讨论，请光临枫下论坛 rolia.net
It is a very costly way to invest.
1) the cost of the insurance protection itself - which is usually more expensive than what you would pay for a regular term insurance policy.
2) the marketing and sales commissions.
3) "surrender charge" that may be levied if you decide to drop your policy within the first 10 years or so. The amount of a surrender charge varies by insurer and type of policy, but it is not uncommon for it to exceed the total amount of your first-year premium.
4) on top of all that, there are annual investment fees. Those are not broken out in all policies, so it's often hard to determine how much you're paying. In policies where they are disclosed (typically variable life or variable universal life policies), however, they can be substantial: 3% or more, year end and year out.
The heavy fees involved with cash-value life insurance can really drag down your returns. Especially when you consider that index mutual funds often have annual expenses under 0.5%, and many actively managed mutual funds charge 1% or so. That's a lot less than the 3% or more you'll pay for the investment component on a cash-value policy.
The lesson: If you need life insurance, get term insurance. If you want to invest for retirement, invest in retirement plans.更多精彩文章及讨论，请光临枫下论坛 rolia.net
