@Unclewaffl3s
It’s supposed to grow to $500,000 by the time I’m 55.
As a life insurance agent and financial advisor, here’s my take. There are many types of life insurance with different goals besides just a death benefit. If you’re mainly trying to cover big expenses like mortgages or large loans, I’d suggest a term policy for those specific needs. But I also usually recommend having some permanent insurance too, since funeral costs are rising fast and it can make a big difference for your beneficiaries.
For bigger policies, I don’t recommend anything over $400,000 unless the client is specifically after tax advantages or has business needs. In your case, it might help to get another opinion from a different agent.
As a life insurance broker, I’ll point out that $900,000 is a lot of coverage if you’re looking for cash value growth. It sounds like your policy is a level policy, where most of the premiums are going toward the cost of the insurance and not cash value growth. Many agents set up policies like this either due to inexperience or because it affects their commission. In the long run, you might not be getting what you need from this policy. I’d seriously consider reviewing your goals for retirement and seeing if this policy aligns with them. If you have questions, feel free to ask.
It’s hard to give advice without knowing all the details, but $900k does seem high if you were mainly looking for cash value growth. Whole life insurance isn’t an investment in the same way stocks or bonds are. It’s more like a bond in your portfolio, something stable and not tied to the market. You don’t want it to be your only or biggest asset, but it can be useful as part of a balanced approach to savings and investments.
Cash value life insurance is great for accessing money with tax advantages. You can borrow against the cash value for things like cars or vacations at low interest rates. I used mine to buy a car, and the loan was 2.9%, while the cash value earned 2%, so I was really only paying 0.9% on $50,000.
I also set up policies for my kids to either use for retirement income or long-term care. When they hit 65, one of the policies will give them $200k a year tax-free until they’re 90. It’s a great way to transfer wealth.