Should I open a whole life insurance policy or a 401k first? Question ...

Should I open a whole life insurance policy or a 401k first?

I met with a financial consultant who told me that the 401k is the last thing I should start. She says it makes more sense to open the whole life which compounds 8% return on my money yearly and pays a yearly dividend. Which is smarter to do first?

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For most people it is best to buy term life insurance and invest the money they save in a 401k. Life insurance plans that builds up a cash value like whole life, universal life, et cetera are rarely the best choice. Financial consultants who push whole life insurance are interested in lining their pockets with big commissions, not making you money. If you look at financial sites not run by insurance companies, they are almost unanimous in recommending term life insurance. Look at big name sites like Yahoo,CNN, Motley Fool SmartMoney.com and Kiplinger?s, and they all recommend term life insurance for most people. However, you will find many websites out there that promote whole life insurance and disparage term life insurance. They are almost all run by insurance companies. Insurance companies make more money from these policies and it is in their interest to push them. Whole life has the advantage of having a built-in savings program, but you lose a lot of money to high commissions. It is usually better to buy term life insurance and invest the money you save in an IRA, 401K, or mutual fund. There are, however, rare cases where whole life is better and these are discussed in the articles below.

Sources: Term vs. Whole Life Articles:

http://www.fool.com/insurancecenter/life?

http://finance.yahoo.com/insurance/artic?

http://money.cnn.com/pf/101/lessons/20/i?

http://www.smartmoney.com/insurance/life?

http://www.kiplinger.com/basics/archives?

General Information on Life Insurance:

http://www.fool.com/insurancecenter/life?

http://finance.yahoo.com/how-to-guide/in?

http://money.cnn.com/pf/101/lessons/20/i?

http://www.kiplinger.com/basics/archives?

Your financial consultant is an idiot.
A whole life insurance is one of the WORST investments there is.

I am an economics major?1 semester from MBA.

Find another consultant.

They call it whole life because you throw you money in a hole.

If you?d like a more rational plan, that is not clouded with commission motives, send me an email.
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Source: http://www.decadesilove.com/2012/07/30/should-i-open-a-whole-life-insurance-policy-or-a-401k-first-question/

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