After reading Renee Christopher-McPheeter’s message to your readers regarding her “eye opening” experience in purchasing life insurance, I agree with her.

Buying life insurance is mass confusion, and I believe it is purposely designed that way by the insurance industry so they can sell whole life insurance. As Ms. McPheeter’s stated, term insurance is designed for a certain length of time. Term insurance is much cheaper than whole life, and most policies can run until one reaches 100. That should be long enough for most for us. The cost of term insurance increases each year as one grows older. The price of the whole life policy stays the same but the cost of whole life increases each year just like term. Sounds like mass confusion doesn’t it. As I said it’s designed to be confusing. How is this possible? Please be aware the cash value, which one builds up inside a whole life insurance policy, is kept by the insurance company in the event of death and the face value of the policy is paid out. For instance, if you have a $10,000 whole life policy with $5,000 cash value in it what you really have is $5,000 of insurance and $5,000 of cash value (your money). Remember the price of the whole life policy stays the same but now you only have $5,000 worth of insurance and $5,000 of your money which the insurance will keep. The true cost for your insurance just doubled. Also remember the cash value (your money) in your policy is available to you to borrow and pay interest on until you repay it. Also remember, if one dies, the company keeps the cash value. Would you put your money in a local bank if you had to pay interest on your money to take it out and if you die they keep all your money? I don’t think so, but that’s exactly how whole life policies work.

You would be much better off to buy term insurance for a lower premium, and put the amount saved into the bank. When you “vacate for a different location,” your heirs will receive the face amount of the term insurance plus what’s in your savings account. A much better deal. I hope this clears up some of the confusion.

​Jim Otenbaker​


(3) comments

CitrusCo Citizen

What do all y'all think about policies that are a combination long-term care insurance policies/life insurance for 20 years to maturity? For example, a policy could be $100K for life insurance OR can be used for long term care at 4K a month until the insurance runs out? It's hard to tell if that's a good or bad idea. I think the premiums are about $3K a year (for 20 years). So that's $60K plus maintenance fees that you've spent on this combination life ins. and long term care. The life insurance policy is $100K after 20 years. So in that way you don't lose out on all of the long-term care insurance if you just suddenly die at home--your heirs can still get your life insurance $. How can the insurance company afford that--everybody dies sooner or later? Are people being scammed by these policies? If it sounds too good to be true, is it? Anybody know anything about this?


Buy health insurance and they hope you die ASAP so they can keep your money. But life insurance they hope you live forever so they can keep your money


I am surprised this "whole life" scam is still going on. I was selling life insurance in the early days of Term Life policies...and the chief selling point was exactly what the writer are basically self insuring yourself with the cash value of your whole life policy. I got a very threatening call from a Prudential agent who accused me of "twisting" one of his clients out of a whole life policy to go to a term policy. He was going to report me to the State Insurance Commision....I said I can't wait to testify to your fraud. Never heard from them. The purpose of "life" insurance is not to make your beneficiaries is to provide them with what you would have provided them had you not died while they were still in need of your support. When that need has been do not need life insurance...unless you want to fund an endowment or a college education for your grandchild.

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