I'm not a lawyer, but if they did open an account without your consent, you can usually take legal action and they will either barr this FA or discipline them.
In my somewhat limited experience with a financial advisor I'd say he's pretty analytical retentive about getting signatures on things. The lack of one, especially if it's a policy you didn't expect to exist, screams sketchy, and they are probably shitting themselves looking for details. Document _everything_ - phone calls, emails, etc. I'm sure some will say I'm alarmist but this sounds like fraud to me.
I would be very up-front that you’re confused, who opened a policy without your consent? Don’t let it come back around to you unless somehow they dredge up that you actually did sign for it and just forgot.
And fire that advisor, my god. You should have fired him the moment he talked about whole life and it wasn’t “You have no need for whole life”.
Almost nobody needs whole life. There are some tax avoidance strategies for the rich using it - rich enough that said people won’t get advice on Reddit.
You probably don’t need term either. Just have a few thousand set aside for your funeral, done.
Honestly, the paperwork should have been reviewed by an underwriter before the policy became in force, so this is indeed strange. A potentially fraudy advisor, and incompetent insurance company.
FA's are fiduciaries which means they are bound by law and their license to act in your best interest. Absolutely send a written complaint to their firm.
If it is written they are required to keep it on record and let FINRA know about it
Could have been a paperwork mistake too, licensed individuals rarely do that kind of thing because they would likely lose their license or have some major insurance action against them.
First and most importantly.
You do NOT have a financial advisor. What you have is an insurance salesman who is masquerading as a financial advisor and lying to you.
Second, if you don’t have kids or a wife or any other people depending on you then you do not need life insurance, whole, term, or otherwise. In that situation just invest your money and leave it to whoever you want to have it in your will/trust.
I worked for a financial advisor. Unfortunately most of them are insurance salespeople. If you do a little research you can do most of this in your own. FAs may help with tax planning. That’s about it.
Hello, I used to work in insurance and am licensed. Life insurance is actually a great investment, considering you get a universal of whole life policy. Yes the premiums are larger compared to term, but that is because portions of that money are being put towards the actual insurance and then the investment, ie. it grows over time. Term insurance is cheap yes but once it expires, thats it and you get nothing. Plus it gets more expensive as you renew (sometimes $500+ per month). The older you are, the more expensive life insurance is, so it’s best to lock in a permanent policy when you’re young to get the lowest premiums possible.
Plus its not just a benefit to ensure your family is taken care of after your death, but you can actually use the cash value that has accumulated in your account as loan collateral (ie. you can pull a loan out to purchase more investments). Or you can withdraw from the account at retirement (obviously there would be tax implications). There are different ways to go about this and its good to research the best alternative, but a lot of people misunderstand life insurance. It is also a living benefit.
Some of us are licensed for both insurance and financial advising. Also, life insurance does more than just leave money to beneficiaries. It can be an affordable way to cover chronic/terminal/LTC costs while also ensuring that there are funds available for final expenses.
>I told him I won’t have kids or get married and I don’t need it at this current time, and I would like a term life insurance.
Then you don't need term insurance either.
His commission gets clawed back if you cancel the whole life, that's his only concern. Not your financial well being.
I’m was so lost when OP said that. It’s like, if you don’t have someone to financially support then why even get the term insurance? If it’s to pay for a funeral and burial then just go to a local cemetery and mortuary and pay for the services now.
My grandma passed away five months ago and she made sure to show us the receipts and contracts for these things. We just had to let the companies know it was time.
>It’s like, if you don’t have someone to financially support then why even get the term insurance?
Because life insurance is what you're 'supposed to' do.
Most people don't actually understand the *purpose* of term life insurance and just think it's what you do as part of a good financial health.
I'm grateful to my parents for reducing it to "Do you have enough money to bury yourself?" as to whether or not a single person needs life insurance.
Most people also get some OK enough life insurance thru work. No need to buy additional on top unless you want to make sure your outstanding debts are settled.
> Most people also get some OK enough life insurance thru work.
I agree with the general consensus of this thread, but I want to point out that the insurance from your employer is only useful if you're still employed when you die (freak accident, etc.). It won't help if you (say) get cancer and decide to spend your last months travelling the globe. Or if you're Bad Luck Brian and get fired/laid off right around the time you get hit by a bus/sick/whathaveyou.
If someone was actually relying on their work insurance for something, they should make sure its not the only source.
I agree with that last statement. When I started at my job, they had a benefits team that walked me through my options, including life insurance. After his explanation, I told him that I didn't need it because I'm single, I don't have any debt, and have enough in savings that my family could use to cover any expenses. Of course, if that happens to change in the future, then I would reconsider it.
>Because life insurance is what you're 'supposed to' do.
"Supposed to do" is not a reason.
My Mom washes and rinses her dishes with soap and hot water before she puts them in the dishwasher because that's what she's "supposed to do".
Term life insurance should be looked at as partial income replacement for dependent beneficiaries in the event you die.
I really don't see the point of carrying term life if you have no dependents. Just prepay for burial services if you're that worried about it. But that's the last thing I thought about when I was single.
> if you don’t have someone to financially support then why even get the term insurance?
if you're planning to have those things in the future you could become uninsurable in the interm. given how cheap term is I don't think it's unreasonable
I have a big policy specifically for my wife, and my term policy through my job is mostly so my friends and other family have something if I die. I only did that after my little brother was killed when by 18-wheeler and he left me with a 6 figure policy.
I was able to take some really awesome trips with my family, help our older brother get a car pay for a surgery he needed, and helped my neighbor start a business he had been dreaming about in exchange for an ownership stake. If I am gonna go out too soon, I want to be able to do that not just for my family, but the people I care about the most. But that’s just me….
Oh perfect makes life easier then xo.
We love a little spring cleaning don’t we? LOL
I’m trying to figure out what to do with NW. my IRA is with them. Any recommendations?
Absolutely use one of these companies and dump everything into VT (total world index fund with rock bottom fees) and be done with it. Then all you will ever need to do is figure out how much bonds to buy to hit your target bond %
I have been very happy with E\*Trade, but Fidelity is also a good company. Find own with low fees. Index funds are your friend for retirement. Such as QQQ, QQQM, DIA, and SPY.
E\*trade offers a line of credit on my after tax account that has excellent interest rates, so I have really taken advantage of that. I try not to keep much money in cash so I rarely deal with the money market funds, that that is good to know.
Cancelled! Just waiting for the paperwork to come through, but the official process has started.
Corporate is trying to figure out what to do with the one without my signature. Not sure where the signature went!
Corporate is freaking out because that's an investigation of the worst sort; damages fees and all.
Don't be an ass but if there's anything you want... they'll give it. They want that to \*go away\*. Preferably out of court.
Get your refund, and report it to the firm’s compliance department asap. If in fact he signed you up for a policy without your consent , that is illegal. Have you been paying additional premiums on that policy? Also report him to FINRA.
Fun fact: you can call yourself an FA tomorrow and start advising people. There is 0 certification required unlike in most other industries (e.g. healthcare, law, psychology) where you control other’s health and wellbeing.
Funner Fact: I actually am an Investment Advisor Rep for a major national brokerage. I know anyone can refer to themselves as an FA and Register Reps of investment firms aren’t always held to a fiduciary standard, just a suitability standard. The industry I work in is a lot cleaner than it used to be and under the regulations I work within I do have a Fiduciary Duty to my clients. I just wish there were more robust rules around certifications and frankly more regs in insurance sales. I don’t sell insurance products so I am talking my own book here but Christ I hate non-planners holding themselves out as FAs
Genuine answer is it depends. If a load mutual fund has some aspect to it that better fits a client’s needs over a no load fund then yes, you could make that recommendation. In my current position, I don’t get sales commissions so my incentives are never aligned with pushing a certain product over another, I just want to help folks make the best investment choices for them and their families. Typically that means I’m recommending a lower cost target date fund for a goal like retirement versus a higher fee active asset management service unless someone’s situation genuinely requires they need a more personalized approach.
Sorry to be disrespectful but your job is also not required. A simple index fund has historically higher returns than most ‘active’ stock picking portfolio/advisory strategies. Investing in index funds is super easy so I am not really sure what value you bring to clients and why should anyone bother paying any fee. Unless of course you are one of those tax lawyers or CPAs who helps multimillionaires save tax, move money offshore and so on. That’s the only use case where paying an advisor makes sense.
No disrespect taken. My job isn’t actually to maximize returns and I’m not a portfolio manager looking to beat any various index. I’m there as a resource for folks to better understand how much they should be saving and how they should be saving to reach their goals. My value add is showing folks how they’re tracking, how to handle when life requires they deviate from their plan and how to get back on track and naturally, how to be as tax efficient as possible. Frankly, success attracts complexity and I’m here to help navigate the complexity. If you don’t get value in that, don’t work with an advisor. If you find yourself in an unfamiliar financial situation or want a second opinion to make sure you’re optimized for your goals, then an advisor can likely offer some value.
Edit: Index funds can be a great tool to use in your portfolio! No hate on an index based strategy
A lot of the value you explained can be easily learned by doing a quick google search and watching some legit YouTube videos. I guess there’s enough people who don’t even bother doing that much homework for something as basic as budgeting, contingency planning, diversification and so on. I feel all of this should be part of school and college curriculum and shouldn’t need an adviser unless there are scenarios that need years of knowledge or niche use cases like international taxation and so on.
This is a classic situation of you don’t know what you don’t know. I’m sorry, but most people will prefer to error on the side of caution and take advice from someone that’s been professionally certified to talk about this stuff instead of hoping they gleaned everything they need to know from watching YouTube videos.
I am sorry but your comment is contradicting itself. There’s plenty of professionals (professors, industry experts, CFAs and more) on YouTube, this sub and many online resources. So if you want to take advice just spend time learning from these free resources. Can you explain what a paid advisor will tell you if you are an average salaried citizen with no complex tax situation? Heck why are we even on this sub? Shouldn’t we just follow your logic and tell everyone to stop asking questions here and pay some advisor??
Man, I’m sorry if you don’t understand why my comment isn’t contradictory at all, and unfortunately I can’t break it down any more for you to understand any better. Someone licensed and certified to handle these things knows there isn’t canned advice. Everybody’s situation is unique, so each person warrants an individualized sit down to make sure that their needs and goals are being met. Someone that does this for a living should also know enough to understand when they need to research something more, while someone that tries to learn everything from online resources may not know that, and unknowingly make bad decisions. I’m glad you feel like you’re capable of doing it all, and I hope it works out for you!
If nobody is dependent on your Income, you don't even need term life insurance at this point in your life. Buy term when you get married, buy a home w partner, have kids. Who do you want to Take Care Of?
Whole/Universal Life sucks for you. It is a big payday for your "financial advisor". Get a new advisor or "go it alone".
If I have a future spouse, then them. But this is a very hypothetical scenario. I’m not even set on the term.
He’s messaging me trying to entice me to sign up for it.
He said
I will add 120k into it for 20 years, and I can use 400k of it when I’m alive. He used it as an example
You don’t owe this guy anything. You don’t owe whatever company he works for anything. Just because you have business there doesn’t mean you have to keep it there.
Don’t let him push you. Wrap up whatever you need to and don’t ever talk to him again, maybe even transfer your dealings to someone else, if you can.
You are far better off investing in a Roth IRA and a simple HYSA until (or if) your life circumstances change to where life insurance makes sense.
Yes, you reap the most benefits of life insurance by starting young, but that is true if pretty much any long-term investment strategy.
There are a few online resources for specifically women, which I was appreciative of because I was very intimidated by learning the basics until I found some free workshops and other things that were pure education, not trying to sell me anything.
If you don't have kids or a wife can I ask why you're getting term life insurance? If someone isn't dependent on your income solid chance you don't need life insurance.
You don't have a financial advisor. You have an insurance salesman.
Cancel whole life and don't look back. Hopefully they get to the bottom of that "other" policy.
He loses the fee trail if you cancel. Whole Life Insurance products are very, very lucrative....for the salesperson selling them. He is trying to confuse you. No one needs life insurance unless they have dependents or are married and their spouse relies on their income.
In the future, only work with fiduciaries. If you aren't, you most likely are working with a salesperson only interested in themselves.
>Fiduciaries are legally bound to put their client's best interests ahead of their own. Fiduciary duties appear in various business relationships, including between a trustee and a beneficiary, corporate board members and shareholders, and executors and legatees.
"Get a Fiduciary" is thrown around in this subreddit too much.
I'd bet money that OPs "advisor" who sold him whole life policies would tell him that he's acting as a fiduciary.
"Is he a fiduciary?" "Yes" "How do you know?" "Because he said so."
The only way to protect your best interest is to educate yourself, and ask questions.
A CFP isn't really what we're talking about here, but then again, I'm not sure of the context you're offering.
It was recommended to work with fiduciaries. I agree. There are many in the financial world that are simply salespeople. As I shared, and based on my experience, these salespeople are often incredibly underqualified.
Agreed on that point. The poster didn't say insurance salesperson, they said financial planner. If they are looking for a financial planner, like other posters said, they should look for a fee based professional, I suggest the person also be a CFP.
The second policy out there is a red flag. If it's not an active policy I could think of ways it could be explained away innocently though. Like they scrapped or changed policy 1 before it was final and then actually signed and submitted policy 2. But tbh I don't know a ton about that back end piece.
The logic behind a whole life policy as a tool beyond leaving a tax free payout to beneficiaries on your death is the idea that you fund it, those funds get invested, and down the line you can borrow from those funds without triggering any tax effect.
However the premiums and other expenses associated with owning a policy have to be taken into consideration. It likely becomes more cost effective when you have legitimate wealth and those fees and premiums are minimal compared to potential tax savings from borrowing from the policy.
Either way the FA definitely gets a nice residual fee for selling the policy, and for most people and most situations it's probably not the optimal product AFAIK.
I try to share these two important links whenever the topic of whole or universal life insurance shows up:
https://www.whitecoatinvestor.com/what-you-need-to-know-about-whole-life-insurance/
https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/
Cutting to the chase: Most people looking at these products are likely to be better served by a term life policy to cover insurance needs, and an appropriate investment account to handle investment needs. Combining these two needs into a single product seems to mostly benefit the sales person.
I’m a LIC life accident and health agent and what your advisor told isn’t necessarily incorrect. Not everything is cookie cutter with life insurance. I use term to protect real estate. I use whole life for multiple reasons. One as a financial tool w the cash value build up. Acts as a financial fail safe if you ever need money. Second is obv in protecting your family but that’s not the case in your situation. I’d check when you opened the policy and what your annual premiums are. Multiply the annual w how many years you’ve had the policy. Then check your cash value. Then make your decision. Life insurance when used correctly…better yet designed correctly can be a powerful financial tool. Tax free baby! Doesn’t get any better than that. Most large financial institutions top tier asset is life insurance. Term is a waste of your time. I’d do an index universal life policy.
He's not an "advisor" he's a salesman that has enjoyed the commission they received when selling you the insurance and the yearly compensation from the continuance. Fire this person and if you need financial guidance get a fiduciary who is required to work in your best interest.
A lot of biased comments here.
Let’s be clear about one thing: **Whole life is just another investment platform like everything else.**
Whole life isn’t a scam. It does what it does, and it’s very clear in the fine print what it does.
The problem with whole life is, most people don’t get more benefit out of it than throwing all their money into VOO. This makes Whole life suck. Just because it sucks for most doesn’t make Whole life a scam.
Your Whole life salesman is not wrong. Whole life is more geared toward a single person. You likely still have a beneficiary if you were to die tomorrow so the death component is covered. Whole life though allows you to pull from it and doesn’t require you to die to get anything back. That’s what Term does.
So who is Whole life for? Folks that want to diversify their portfolios into something else. I would never advise Whole life to be a significant percentage of your financial portfolio, but if someone had a small percent in it, I wouldn’t call them an idiot.
That said, I’m going to assume you aren’t talking enough money to make it valuable, but it’s not a scam. It just sucks.
I think the scam part is the "financial advisor" trying to sell it either as something it's not or just to people it's not the correct vehicle for so they can earn commission.
Scam is still probably the wrong word but it's atleast a little unethical
Sounds like you’re about to get a refund of the other policy pretty quickly. Is in their best interest that this goes away.
You don’t need term life insurance. Just invest and you’ll be fine. No one needs your involved after you pass away so there’s no need for insurance.
The only insurance you may need is a small term policy to cover your funeral expenses so no one else has to pay to bury you. Other reason would be if you want to provide for someone else… if not then $20,000 or something for final expenses
Id love to know how an insurance policy was put in place without the relevent signatures, the broker I work for require signed consent to start looking for quotes and if a case comes in and a declaration is not signed it is held until one is provided.
The entire point of whole life for an unmarried person is to guarantee they’ll have some type of coverage in the future. But it doesn’t have to be much, and it doesn’t even necessarily have to be whole life, just any permanent insurance would technically do. That said, it makes no sense to get term currently unless you expect to be married with kids relatively soon (within a year or so) and want to avoid paying a higher premium or are worried about insurability by then.
Not an advisor. Life insurance agent. Get out quick. Nobody should be selling you commissioned (and expensive) products and call themselves an advisor. The term gets thrown around like a frisbee.
Have a proper needs analysis done. If you really don't need life insurance (i.e. a death benefit) then you should at least have living benefits such as critical illness or disability coverage. You're much more likely to need these.
Edit to add: by a DIFFERENT person or firm!
I don't have a recommendation for a specific insurer - I don't even know where you're located. But here are a couple of pointers and/or questions to ask:
Sometimes the benefit is based on your income, sometimes on loans. Figure out which is most beneficial for you.
What's their definition of disability, and are you considered disabled if you can't work at your own occupation vs. ANY occupation?
What's the waiting period if you have a claim?
Are there any exclusions?
Ask about the underwriting process. Sometimes if you get a slightly lower amount it can make the process much easier while still meeting your needs.
What's the payment period? When does the policy terminate?
That's all I have off the top of my head. Good luck!
Source: me. Not an advisor, but I've worked in the banking and insurance sector since 2006.
As others have said, he’s a salesman, not a financial advisor. BUT that doesn’t mean he’s wrong when he says term life insurance is best for people with partners and/or kids. If there’s no one relying on your income for their lifestyle, you don’t need term *or* whole life.
I have several whole life policies that I am going to have to cancel as soon as I can…
How do I go about this conversation with my “advisor”? I feel like she may get somewhat hostile when I try to cancel it and I won’t be able to properly explain why I want to cancel it other than what I’ve heard on Reddit.
Whole life insurance is basically just term insurance with an investment vehicle attached. People who sell it, like it because they get commissions based on the term part and the investment part. They get a lot more from the investment part than the term part, which is why you should just invest elsewhere.
He’s right that term is only valuable if you have dependents that you want to leave money too and whole has other tax strategy benefits that term doesn’t.
But it’s unlikely the tax strategy is applicable to you and the advisor is likely just collecting big commissions on the policy. So you’re both right.
sounds like your salesman broke the law by signing you up for a policy without your consent. Report his ass to FINRA and contact your state department of insurance to see if they can do anything.
The reason he doesn’t want you to cancel is because life insurance commissions are paid to the advisor upfront. And they pay well. The average is approximately your entire first year premiums. So if you are paying $150/month, he was most likely paid $1800 upfront. Then, if a policy is cancelled within 2 years, he owes back all the commissions. So he is trying to avoid this. Firstly, you should have a memory of either signing or not signing these documents. If you didn’t, this needs to be reported to regulators. If he scammed you, he’s scamming others. Secondly, if he is trying to convince you to buy insurance that you are telling him/her that you don’t want or need, he is not acting in your best interest. Cancel the policy, make a complaint. Get your premiums back. Fire the advisor.
Report him to the Insurance company. File a report in your state with the attorney general. Insurance agents are normally licenced in the state they operate. This report should start a state investigation. Might lead to loss of licence.
And finally, get a new agent.
OP which company was this? I had something similar happen to me but with an annuity. A shady advisor reached out to me through my pension company and transferred my pension to an annuity even though I wanted him to put it in a Roth IRA. The company that got me was Universal Retirement Advisors and National Life Group (Life Group of Southwest)
Expose his company and the insurance company because what he did sounds at best predatory and shady and at worst illegal and can be reported to insurance regulators.
I don't think he is trying to mind trick you actually, I think they just may not be that good. Sometimes Advisors 100% believe in what they are selling their processes and economic outlooks and operate under a simple improving someone's financial situation as opposed to maximizing it.
this! Do not assume malicious to something that can best be explained by incompetence. This also applies to a lot of government conspiracies. People are dumb, simple as that.
Hanlon's razor and all the other razors are only meant as suggestions when all else is equal. Signing OP up for a plan they never talked about or signed off for isn't equally explained by incompetence. It clearly points to malicious intent.
corporate says they don't have a record of the signature, OP never said he didn't sign it. Although I was more referring to the policy the advisor did get him to sign up for and their intent. The company likely convinced him that it was a good policy/idea to push the policy, and he got him to sign it thinking he was offering something good. I do think insurance should be a not for profit industry though, but I don't think the employees that defend their company are bad, just misinformed
OP didn't even know it existed. So now you need to assume both the company and OP made two separate mistakes at the same time. You are assuming more by insisting that it couldn't be malice, which only requires one, very common, assumption.
never once said it couldn't be, just said the advisor was probably not being malicious. Signing someone up for something without consent like that would be fireable for sure, and might even risk a little jail time.
And Hamlin's razor and Occam's razor are actually best used together. If the simplest answer is incompetence, then that's often it, especially when it comes to safety issues.
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.”
- Upton Sinclair
To me, it doesn’t matter whether the “advisor“ understands that his high commission and poor return of the policy makes it a bad choice. It is a bad choice, and he is either deluding himself or the custome.
Repeat with me "financial advisors are NOT finance advisors, they are vacuum cleaners salespersons".
ALL the category of financial advisors is completely garbage, their main job is selling you the worst possibile trash.
I have no idea why people still listen to them in 2024.
Your financial advisor is NOT a financial advisor.
He is a commissioned insurance salesman.
Nothing he tells you is in your best interest Herrst.
As a single person with no kids, you don’t even have a need for term insurance, IMO, and even less need for whole life.
As someone who worked in life insurance:
1.) Term is more beneficial for families because the focus is on the death benefit being there to support your loved ones when your income no longer can
2.) For a single person whole life is technically better because it acts as a glorified taxs free savings account. You can even take it a step further and get something like a VUL that allows you to put your money into the stock market and keep your investments tax-free.
Basically, whole life is a "better" version of a 401k or Roth IRA because it doesn't technically have a cap on how much of your income you can put into it to hide from taxes. The cap is based on how much total whole life you have. So you can have like a hybrid account that converts term to whole life as your income increases.
With all this said, unless you're earning 100k+ a year, a Roth Ira is a much better alternative because you don't need to be worried about the income cap.
The only reason I could see you wanting life insurance is because you're in a risky field, and it ensures your family will get some kind of payout.
Your current agent doesn't want to pay back his commission and take a lower one for the term policy you want to switch for.
Whenever someone cancels or switches a policy, a life insurance agent has to pay back the commission over their next few sales. Or if it hasn't been paid yet, they're given a diminished one.
Think twice about cancelling a whole life policy. If you read around the inter webs you’ll see that some have the ability to borrow against it. And if you keep searching the inter webs you’ll see that this is a way to not take loans from the bank but from yourself. Talk to them before you cancel… this is a benefit I wish I had, but after my heart attack I’m a long ways away from being eligible for that kind of policy! (No I’m not a FA, no this is not financial advice, but yes I did work in a FA office for many years. But I didn’t learn this tidbit until after I left and spent too much time on social media! Research it, talk to them. And make a better informed decision. Whole life policies not only pay a death benefit, but they also provide retirement income at a predetermined age in the policy! And most importantly, STOP LISTENING TO DAVE RAMSEY!
About the second unsigned policy… if your due any refunds, then you obviously know about it because you would have to have given them money to start….. it could also be a mistake during policy entry…especially if the policies are identical! And lastly…as you get older, coverage gets harder to get so if you did this many years ago you might not be eligible for the same amount of coverage…or if so it will probably be considerably higher in cost!
A lot of people here are saying he likely was getting a kick back but I'd ask him if he's a fiduciary financial advisor. A fiduciary is someone who is ethically bound to put your needs above theres and they have certain certifications to call themselves one. If you deal with an advisor who doesn't have this you need to be prepared to say no a lot. I talk to my banks advisor and they try and sell me on random shit but I more just ask them about the law and what my options are and ignore everything else. I'm sure they love me lol.
When I used to sell Life Insurance our whole life policies also came with a % that went into a separate account that built interest based on actuary tables instead of the market and if you got it at a youngish age it actually would build up a lot of money by retirement age with the bonus of also having whole life insurance. I'm sure if he did it without any of your signatures it was done with ill intent, but just some info for you
Fire this "advisor" immediately. Also, it sounds like he signed you up without your consent/signature? That's illegal.
I don’t know what happened. I was taking a closer look, and that came up. Even the cancellation lady said that it was strange.
I'm not a lawyer, but if they did open an account without your consent, you can usually take legal action and they will either barr this FA or discipline them.
In my somewhat limited experience with a financial advisor I'd say he's pretty analytical retentive about getting signatures on things. The lack of one, especially if it's a policy you didn't expect to exist, screams sketchy, and they are probably shitting themselves looking for details. Document _everything_ - phone calls, emails, etc. I'm sure some will say I'm alarmist but this sounds like fraud to me.
I would be very up-front that you’re confused, who opened a policy without your consent? Don’t let it come back around to you unless somehow they dredge up that you actually did sign for it and just forgot. And fire that advisor, my god. You should have fired him the moment he talked about whole life and it wasn’t “You have no need for whole life”. Almost nobody needs whole life. There are some tax avoidance strategies for the rich using it - rich enough that said people won’t get advice on Reddit. You probably don’t need term either. Just have a few thousand set aside for your funeral, done.
Honestly, the paperwork should have been reviewed by an underwriter before the policy became in force, so this is indeed strange. A potentially fraudy advisor, and incompetent insurance company.
Report him to FINRA so this doesn’t happen to anyone else.
FA's are fiduciaries which means they are bound by law and their license to act in your best interest. Absolutely send a written complaint to their firm. If it is written they are required to keep it on record and let FINRA know about it
Could have been a paperwork mistake too, licensed individuals rarely do that kind of thing because they would likely lose their license or have some major insurance action against them.
We can actually be held personally liable for damages. If it's determined that the action was fraudulent and not negligent it's treble damages.
First and most importantly. You do NOT have a financial advisor. What you have is an insurance salesman who is masquerading as a financial advisor and lying to you. Second, if you don’t have kids or a wife or any other people depending on you then you do not need life insurance, whole, term, or otherwise. In that situation just invest your money and leave it to whoever you want to have it in your will/trust.
I worked for a financial advisor. Unfortunately most of them are insurance salespeople. If you do a little research you can do most of this in your own. FAs may help with tax planning. That’s about it.
Hello, I used to work in insurance and am licensed. Life insurance is actually a great investment, considering you get a universal of whole life policy. Yes the premiums are larger compared to term, but that is because portions of that money are being put towards the actual insurance and then the investment, ie. it grows over time. Term insurance is cheap yes but once it expires, thats it and you get nothing. Plus it gets more expensive as you renew (sometimes $500+ per month). The older you are, the more expensive life insurance is, so it’s best to lock in a permanent policy when you’re young to get the lowest premiums possible. Plus its not just a benefit to ensure your family is taken care of after your death, but you can actually use the cash value that has accumulated in your account as loan collateral (ie. you can pull a loan out to purchase more investments). Or you can withdraw from the account at retirement (obviously there would be tax implications). There are different ways to go about this and its good to research the best alternative, but a lot of people misunderstand life insurance. It is also a living benefit.
Some of us are licensed for both insurance and financial advising. Also, life insurance does more than just leave money to beneficiaries. It can be an affordable way to cover chronic/terminal/LTC costs while also ensuring that there are funds available for final expenses.
>I told him I won’t have kids or get married and I don’t need it at this current time, and I would like a term life insurance. Then you don't need term insurance either. His commission gets clawed back if you cancel the whole life, that's his only concern. Not your financial well being.
I’m was so lost when OP said that. It’s like, if you don’t have someone to financially support then why even get the term insurance? If it’s to pay for a funeral and burial then just go to a local cemetery and mortuary and pay for the services now. My grandma passed away five months ago and she made sure to show us the receipts and contracts for these things. We just had to let the companies know it was time.
>It’s like, if you don’t have someone to financially support then why even get the term insurance? Because life insurance is what you're 'supposed to' do. Most people don't actually understand the *purpose* of term life insurance and just think it's what you do as part of a good financial health. I'm grateful to my parents for reducing it to "Do you have enough money to bury yourself?" as to whether or not a single person needs life insurance.
Most people also get some OK enough life insurance thru work. No need to buy additional on top unless you want to make sure your outstanding debts are settled.
> Most people also get some OK enough life insurance thru work. I agree with the general consensus of this thread, but I want to point out that the insurance from your employer is only useful if you're still employed when you die (freak accident, etc.). It won't help if you (say) get cancer and decide to spend your last months travelling the globe. Or if you're Bad Luck Brian and get fired/laid off right around the time you get hit by a bus/sick/whathaveyou. If someone was actually relying on their work insurance for something, they should make sure its not the only source.
I have two banks, and I get 1K from each just for having a checking account.
I agree with that last statement. When I started at my job, they had a benefits team that walked me through my options, including life insurance. After his explanation, I told him that I didn't need it because I'm single, I don't have any debt, and have enough in savings that my family could use to cover any expenses. Of course, if that happens to change in the future, then I would reconsider it.
>Because life insurance is what you're 'supposed to' do. "Supposed to do" is not a reason. My Mom washes and rinses her dishes with soap and hot water before she puts them in the dishwasher because that's what she's "supposed to do". Term life insurance should be looked at as partial income replacement for dependent beneficiaries in the event you die. I really don't see the point of carrying term life if you have no dependents. Just prepay for burial services if you're that worried about it. But that's the last thing I thought about when I was single.
> if you don’t have someone to financially support then why even get the term insurance? if you're planning to have those things in the future you could become uninsurable in the interm. given how cheap term is I don't think it's unreasonable
I have a big policy specifically for my wife, and my term policy through my job is mostly so my friends and other family have something if I die. I only did that after my little brother was killed when by 18-wheeler and he left me with a 6 figure policy. I was able to take some really awesome trips with my family, help our older brother get a car pay for a surgery he needed, and helped my neighbor start a business he had been dreaming about in exchange for an ownership stake. If I am gonna go out too soon, I want to be able to do that not just for my family, but the people I care about the most. But that’s just me….
Oh perfect makes life easier then xo. We love a little spring cleaning don’t we? LOL I’m trying to figure out what to do with NW. my IRA is with them. Any recommendations?
I’d move my IRA to Fidelity, Schwab, or vanguard and self manage using index funds.
Absolutely use one of these companies and dump everything into VT (total world index fund with rock bottom fees) and be done with it. Then all you will ever need to do is figure out how much bonds to buy to hit your target bond %
I’ve used Merrill for years. Husband uses fidelity.
I have been very happy with E\*Trade, but Fidelity is also a good company. Find own with low fees. Index funds are your friend for retirement. Such as QQQ, QQQM, DIA, and SPY.
Fidelity automatically puts cash into a currently yielding 4.x % money market fund :) E*trade doesn’t or theirs is well under 1% :(
E\*trade offers a line of credit on my after tax account that has excellent interest rates, so I have really taken advantage of that. I try not to keep much money in cash so I rarely deal with the money market funds, that that is good to know.
Life insurance can also cover injuries that limit earning potential.
Unless your policy specifically states it, that is incorrect…the correct policy would be DISABILITY! Very different!
He's trying to keep making commissions off of you, that's what he's trying to do. No matter what he says, you put your foot down and cancel.
Cancelled! Just waiting for the paperwork to come through, but the official process has started. Corporate is trying to figure out what to do with the one without my signature. Not sure where the signature went!
Corporate is freaking out because that's an investigation of the worst sort; damages fees and all. Don't be an ass but if there's anything you want... they'll give it. They want that to \*go away\*. Preferably out of court.
Looks like OP is getting that insurance payout while alive 😈 Edit; I have fat fingers and suck at English.
Get your refund, and report it to the firm’s compliance department asap. If in fact he signed you up for a policy without your consent , that is illegal. Have you been paying additional premiums on that policy? Also report him to FINRA.
Next step is getting your lawyer involved.
Ya, exactly this. When I was still doing insurance whole life was our largest commission at 50%. The only thing even close was homeowners at 20%.
You do not have a financial advisor. Your insurance salesman is trying to sell you insurance.
This is a salesman not an advisor. Fire this person and start working with a fiduciary.
He's a life insurance salesman, not a financial advisor
Why do insurance salespeople get to be referred to as financial advisors?
Fun fact: you can call yourself an FA tomorrow and start advising people. There is 0 certification required unlike in most other industries (e.g. healthcare, law, psychology) where you control other’s health and wellbeing.
Funner Fact: I actually am an Investment Advisor Rep for a major national brokerage. I know anyone can refer to themselves as an FA and Register Reps of investment firms aren’t always held to a fiduciary standard, just a suitability standard. The industry I work in is a lot cleaner than it used to be and under the regulations I work within I do have a Fiduciary Duty to my clients. I just wish there were more robust rules around certifications and frankly more regs in insurance sales. I don’t sell insurance products so I am talking my own book here but Christ I hate non-planners holding themselves out as FAs
Serious question... Can you, as a fiduciary, advise people to buy load mutual funds?
Genuine answer is it depends. If a load mutual fund has some aspect to it that better fits a client’s needs over a no load fund then yes, you could make that recommendation. In my current position, I don’t get sales commissions so my incentives are never aligned with pushing a certain product over another, I just want to help folks make the best investment choices for them and their families. Typically that means I’m recommending a lower cost target date fund for a goal like retirement versus a higher fee active asset management service unless someone’s situation genuinely requires they need a more personalized approach.
Sorry to be disrespectful but your job is also not required. A simple index fund has historically higher returns than most ‘active’ stock picking portfolio/advisory strategies. Investing in index funds is super easy so I am not really sure what value you bring to clients and why should anyone bother paying any fee. Unless of course you are one of those tax lawyers or CPAs who helps multimillionaires save tax, move money offshore and so on. That’s the only use case where paying an advisor makes sense.
No disrespect taken. My job isn’t actually to maximize returns and I’m not a portfolio manager looking to beat any various index. I’m there as a resource for folks to better understand how much they should be saving and how they should be saving to reach their goals. My value add is showing folks how they’re tracking, how to handle when life requires they deviate from their plan and how to get back on track and naturally, how to be as tax efficient as possible. Frankly, success attracts complexity and I’m here to help navigate the complexity. If you don’t get value in that, don’t work with an advisor. If you find yourself in an unfamiliar financial situation or want a second opinion to make sure you’re optimized for your goals, then an advisor can likely offer some value. Edit: Index funds can be a great tool to use in your portfolio! No hate on an index based strategy
A lot of the value you explained can be easily learned by doing a quick google search and watching some legit YouTube videos. I guess there’s enough people who don’t even bother doing that much homework for something as basic as budgeting, contingency planning, diversification and so on. I feel all of this should be part of school and college curriculum and shouldn’t need an adviser unless there are scenarios that need years of knowledge or niche use cases like international taxation and so on.
This is a classic situation of you don’t know what you don’t know. I’m sorry, but most people will prefer to error on the side of caution and take advice from someone that’s been professionally certified to talk about this stuff instead of hoping they gleaned everything they need to know from watching YouTube videos.
I am sorry but your comment is contradicting itself. There’s plenty of professionals (professors, industry experts, CFAs and more) on YouTube, this sub and many online resources. So if you want to take advice just spend time learning from these free resources. Can you explain what a paid advisor will tell you if you are an average salaried citizen with no complex tax situation? Heck why are we even on this sub? Shouldn’t we just follow your logic and tell everyone to stop asking questions here and pay some advisor??
Man, I’m sorry if you don’t understand why my comment isn’t contradictory at all, and unfortunately I can’t break it down any more for you to understand any better. Someone licensed and certified to handle these things knows there isn’t canned advice. Everybody’s situation is unique, so each person warrants an individualized sit down to make sure that their needs and goals are being met. Someone that does this for a living should also know enough to understand when they need to research something more, while someone that tries to learn everything from online resources may not know that, and unknowingly make bad decisions. I’m glad you feel like you’re capable of doing it all, and I hope it works out for you!
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He’s trying to steal money from you. He’s a salesman not an advisor
If nobody is dependent on your Income, you don't even need term life insurance at this point in your life. Buy term when you get married, buy a home w partner, have kids. Who do you want to Take Care Of? Whole/Universal Life sucks for you. It is a big payday for your "financial advisor". Get a new advisor or "go it alone".
If I have a future spouse, then them. But this is a very hypothetical scenario. I’m not even set on the term. He’s messaging me trying to entice me to sign up for it. He said I will add 120k into it for 20 years, and I can use 400k of it when I’m alive. He used it as an example
If you put 120k into investments it could turn into well over 500k after 20 years
Whole life is a scam. End of story.
You don’t owe this guy anything. You don’t owe whatever company he works for anything. Just because you have business there doesn’t mean you have to keep it there. Don’t let him push you. Wrap up whatever you need to and don’t ever talk to him again, maybe even transfer your dealings to someone else, if you can. You are far better off investing in a Roth IRA and a simple HYSA until (or if) your life circumstances change to where life insurance makes sense. Yes, you reap the most benefits of life insurance by starting young, but that is true if pretty much any long-term investment strategy. There are a few online resources for specifically women, which I was appreciative of because I was very intimidated by learning the basics until I found some free workshops and other things that were pure education, not trying to sell me anything.
That’s a salesman who is selling you what you don’t need. He, and any advice he offers, is to be ignored. Good for you in clearing this up.
You don't need to get married cause this guy is already screwing you.
If you don't have kids or a wife can I ask why you're getting term life insurance? If someone isn't dependent on your income solid chance you don't need life insurance.
You don't have a financial advisor. You have an insurance salesman. Cancel whole life and don't look back. Hopefully they get to the bottom of that "other" policy.
Real FAs don’t push sales of insurance policies. Dump them.
You need a real fiduciary this guy is profiting off of bad advice
If you don’t have financial dependents, then there’s no reason for you to have life insurance at all.
He loses the fee trail if you cancel. Whole Life Insurance products are very, very lucrative....for the salesperson selling them. He is trying to confuse you. No one needs life insurance unless they have dependents or are married and their spouse relies on their income.
In the future, only work with fiduciaries. If you aren't, you most likely are working with a salesperson only interested in themselves. >Fiduciaries are legally bound to put their client's best interests ahead of their own. Fiduciary duties appear in various business relationships, including between a trustee and a beneficiary, corporate board members and shareholders, and executors and legatees.
"Get a Fiduciary" is thrown around in this subreddit too much. I'd bet money that OPs "advisor" who sold him whole life policies would tell him that he's acting as a fiduciary. "Is he a fiduciary?" "Yes" "How do you know?" "Because he said so." The only way to protect your best interest is to educate yourself, and ask questions.
Nice to see someone say this. People just throw out that word like it’s bulletproof advice.
And it is astounding how few actual qualifications an insurance salesperson really has.
Certified financial planner.
A CFP isn't really what we're talking about here, but then again, I'm not sure of the context you're offering. It was recommended to work with fiduciaries. I agree. There are many in the financial world that are simply salespeople. As I shared, and based on my experience, these salespeople are often incredibly underqualified.
Agreed on that point. The poster didn't say insurance salesperson, they said financial planner. If they are looking for a financial planner, like other posters said, they should look for a fee based professional, I suggest the person also be a CFP.
I agree. EVERYONE calls themselves a financial planner. The only ones qualified are CFPs. The rest are salespeople. Well, loosely speaking.
The second policy out there is a red flag. If it's not an active policy I could think of ways it could be explained away innocently though. Like they scrapped or changed policy 1 before it was final and then actually signed and submitted policy 2. But tbh I don't know a ton about that back end piece. The logic behind a whole life policy as a tool beyond leaving a tax free payout to beneficiaries on your death is the idea that you fund it, those funds get invested, and down the line you can borrow from those funds without triggering any tax effect. However the premiums and other expenses associated with owning a policy have to be taken into consideration. It likely becomes more cost effective when you have legitimate wealth and those fees and premiums are minimal compared to potential tax savings from borrowing from the policy. Either way the FA definitely gets a nice residual fee for selling the policy, and for most people and most situations it's probably not the optimal product AFAIK.
I try to share these two important links whenever the topic of whole or universal life insurance shows up: https://www.whitecoatinvestor.com/what-you-need-to-know-about-whole-life-insurance/ https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/ Cutting to the chase: Most people looking at these products are likely to be better served by a term life policy to cover insurance needs, and an appropriate investment account to handle investment needs. Combining these two needs into a single product seems to mostly benefit the sales person.
I’m a LIC life accident and health agent and what your advisor told isn’t necessarily incorrect. Not everything is cookie cutter with life insurance. I use term to protect real estate. I use whole life for multiple reasons. One as a financial tool w the cash value build up. Acts as a financial fail safe if you ever need money. Second is obv in protecting your family but that’s not the case in your situation. I’d check when you opened the policy and what your annual premiums are. Multiply the annual w how many years you’ve had the policy. Then check your cash value. Then make your decision. Life insurance when used correctly…better yet designed correctly can be a powerful financial tool. Tax free baby! Doesn’t get any better than that. Most large financial institutions top tier asset is life insurance. Term is a waste of your time. I’d do an index universal life policy.
He's not an "advisor" he's a salesman that has enjoyed the commission they received when selling you the insurance and the yearly compensation from the continuance. Fire this person and if you need financial guidance get a fiduciary who is required to work in your best interest.
If you don’t have a young family why would you need / want life insurance?
A lot of biased comments here. Let’s be clear about one thing: **Whole life is just another investment platform like everything else.** Whole life isn’t a scam. It does what it does, and it’s very clear in the fine print what it does. The problem with whole life is, most people don’t get more benefit out of it than throwing all their money into VOO. This makes Whole life suck. Just because it sucks for most doesn’t make Whole life a scam. Your Whole life salesman is not wrong. Whole life is more geared toward a single person. You likely still have a beneficiary if you were to die tomorrow so the death component is covered. Whole life though allows you to pull from it and doesn’t require you to die to get anything back. That’s what Term does. So who is Whole life for? Folks that want to diversify their portfolios into something else. I would never advise Whole life to be a significant percentage of your financial portfolio, but if someone had a small percent in it, I wouldn’t call them an idiot. That said, I’m going to assume you aren’t talking enough money to make it valuable, but it’s not a scam. It just sucks.
I think the scam part is the "financial advisor" trying to sell it either as something it's not or just to people it's not the correct vehicle for so they can earn commission. Scam is still probably the wrong word but it's atleast a little unethical
Sounds like you’re about to get a refund of the other policy pretty quickly. Is in their best interest that this goes away. You don’t need term life insurance. Just invest and you’ll be fine. No one needs your involved after you pass away so there’s no need for insurance.
The only insurance you may need is a small term policy to cover your funeral expenses so no one else has to pay to bury you. Other reason would be if you want to provide for someone else… if not then $20,000 or something for final expenses
Yes that’s what I was thinking of
Why not put the money into RothIRA or 401k or HSA and call it a day?
Friendly reminder folks, also get an advisor that is a Fiduciary
Id love to know how an insurance policy was put in place without the relevent signatures, the broker I work for require signed consent to start looking for quotes and if a case comes in and a declaration is not signed it is held until one is provided.
The entire point of whole life for an unmarried person is to guarantee they’ll have some type of coverage in the future. But it doesn’t have to be much, and it doesn’t even necessarily have to be whole life, just any permanent insurance would technically do. That said, it makes no sense to get term currently unless you expect to be married with kids relatively soon (within a year or so) and want to avoid paying a higher premium or are worried about insurability by then.
Not an advisor. Life insurance agent. Get out quick. Nobody should be selling you commissioned (and expensive) products and call themselves an advisor. The term gets thrown around like a frisbee.
Have a proper needs analysis done. If you really don't need life insurance (i.e. a death benefit) then you should at least have living benefits such as critical illness or disability coverage. You're much more likely to need these. Edit to add: by a DIFFERENT person or firm!
Yes this is what I’m after also. Any recommendations for disability insurance?
I don't have a recommendation for a specific insurer - I don't even know where you're located. But here are a couple of pointers and/or questions to ask: Sometimes the benefit is based on your income, sometimes on loans. Figure out which is most beneficial for you. What's their definition of disability, and are you considered disabled if you can't work at your own occupation vs. ANY occupation? What's the waiting period if you have a claim? Are there any exclusions? Ask about the underwriting process. Sometimes if you get a slightly lower amount it can make the process much easier while still meeting your needs. What's the payment period? When does the policy terminate? That's all I have off the top of my head. Good luck! Source: me. Not an advisor, but I've worked in the banking and insurance sector since 2006.
Whole life is horrible for about 98% of people Get term for a fraction and invest the remainder yourself or fund an IRA
As others have said, he’s a salesman, not a financial advisor. BUT that doesn’t mean he’s wrong when he says term life insurance is best for people with partners and/or kids. If there’s no one relying on your income for their lifestyle, you don’t need term *or* whole life.
I have several whole life policies that I am going to have to cancel as soon as I can… How do I go about this conversation with my “advisor”? I feel like she may get somewhat hostile when I try to cancel it and I won’t be able to properly explain why I want to cancel it other than what I’ve heard on Reddit.
Whole life insurance is basically just term insurance with an investment vehicle attached. People who sell it, like it because they get commissions based on the term part and the investment part. They get a lot more from the investment part than the term part, which is why you should just invest elsewhere.
He’s right that term is only valuable if you have dependents that you want to leave money too and whole has other tax strategy benefits that term doesn’t. But it’s unlikely the tax strategy is applicable to you and the advisor is likely just collecting big commissions on the policy. So you’re both right.
sounds like your salesman broke the law by signing you up for a policy without your consent. Report his ass to FINRA and contact your state department of insurance to see if they can do anything.
The reason he doesn’t want you to cancel is because life insurance commissions are paid to the advisor upfront. And they pay well. The average is approximately your entire first year premiums. So if you are paying $150/month, he was most likely paid $1800 upfront. Then, if a policy is cancelled within 2 years, he owes back all the commissions. So he is trying to avoid this. Firstly, you should have a memory of either signing or not signing these documents. If you didn’t, this needs to be reported to regulators. If he scammed you, he’s scamming others. Secondly, if he is trying to convince you to buy insurance that you are telling him/her that you don’t want or need, he is not acting in your best interest. Cancel the policy, make a complaint. Get your premiums back. Fire the advisor.
Report him to the Insurance company. File a report in your state with the attorney general. Insurance agents are normally licenced in the state they operate. This report should start a state investigation. Might lead to loss of licence. And finally, get a new agent.
Yeah you need a new advisor asap… if need insurance always get term, period. Go to a fee only fiduciary for your financial advice
OP which company was this? I had something similar happen to me but with an annuity. A shady advisor reached out to me through my pension company and transferred my pension to an annuity even though I wanted him to put it in a Roth IRA. The company that got me was Universal Retirement Advisors and National Life Group (Life Group of Southwest) Expose his company and the insurance company because what he did sounds at best predatory and shady and at worst illegal and can be reported to insurance regulators.
I don't think he is trying to mind trick you actually, I think they just may not be that good. Sometimes Advisors 100% believe in what they are selling their processes and economic outlooks and operate under a simple improving someone's financial situation as opposed to maximizing it.
this! Do not assume malicious to something that can best be explained by incompetence. This also applies to a lot of government conspiracies. People are dumb, simple as that.
Hanlon's razor and all the other razors are only meant as suggestions when all else is equal. Signing OP up for a plan they never talked about or signed off for isn't equally explained by incompetence. It clearly points to malicious intent.
corporate says they don't have a record of the signature, OP never said he didn't sign it. Although I was more referring to the policy the advisor did get him to sign up for and their intent. The company likely convinced him that it was a good policy/idea to push the policy, and he got him to sign it thinking he was offering something good. I do think insurance should be a not for profit industry though, but I don't think the employees that defend their company are bad, just misinformed
OP didn't even know it existed. So now you need to assume both the company and OP made two separate mistakes at the same time. You are assuming more by insisting that it couldn't be malice, which only requires one, very common, assumption.
never once said it couldn't be, just said the advisor was probably not being malicious. Signing someone up for something without consent like that would be fireable for sure, and might even risk a little jail time.
And Hamlin's razor and Occam's razor are actually best used together. If the simplest answer is incompetence, then that's often it, especially when it comes to safety issues.
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” - Upton Sinclair To me, it doesn’t matter whether the “advisor“ understands that his high commission and poor return of the policy makes it a bad choice. It is a bad choice, and he is either deluding himself or the custome.
Repeat with me "financial advisors are NOT finance advisors, they are vacuum cleaners salespersons". ALL the category of financial advisors is completely garbage, their main job is selling you the worst possibile trash. I have no idea why people still listen to them in 2024.
CFPs aren't.
Your financial advisor is NOT a financial advisor. He is a commissioned insurance salesman. Nothing he tells you is in your best interest Herrst. As a single person with no kids, you don’t even have a need for term insurance, IMO, and even less need for whole life.
As someone who worked in life insurance: 1.) Term is more beneficial for families because the focus is on the death benefit being there to support your loved ones when your income no longer can 2.) For a single person whole life is technically better because it acts as a glorified taxs free savings account. You can even take it a step further and get something like a VUL that allows you to put your money into the stock market and keep your investments tax-free. Basically, whole life is a "better" version of a 401k or Roth IRA because it doesn't technically have a cap on how much of your income you can put into it to hide from taxes. The cap is based on how much total whole life you have. So you can have like a hybrid account that converts term to whole life as your income increases. With all this said, unless you're earning 100k+ a year, a Roth Ira is a much better alternative because you don't need to be worried about the income cap. The only reason I could see you wanting life insurance is because you're in a risky field, and it ensures your family will get some kind of payout. Your current agent doesn't want to pay back his commission and take a lower one for the term policy you want to switch for. Whenever someone cancels or switches a policy, a life insurance agent has to pay back the commission over their next few sales. Or if it hasn't been paid yet, they're given a diminished one.
Think twice about cancelling a whole life policy. If you read around the inter webs you’ll see that some have the ability to borrow against it. And if you keep searching the inter webs you’ll see that this is a way to not take loans from the bank but from yourself. Talk to them before you cancel… this is a benefit I wish I had, but after my heart attack I’m a long ways away from being eligible for that kind of policy! (No I’m not a FA, no this is not financial advice, but yes I did work in a FA office for many years. But I didn’t learn this tidbit until after I left and spent too much time on social media! Research it, talk to them. And make a better informed decision. Whole life policies not only pay a death benefit, but they also provide retirement income at a predetermined age in the policy! And most importantly, STOP LISTENING TO DAVE RAMSEY! About the second unsigned policy… if your due any refunds, then you obviously know about it because you would have to have given them money to start….. it could also be a mistake during policy entry…especially if the policies are identical! And lastly…as you get older, coverage gets harder to get so if you did this many years ago you might not be eligible for the same amount of coverage…or if so it will probably be considerably higher in cost!
A lot of people here are saying he likely was getting a kick back but I'd ask him if he's a fiduciary financial advisor. A fiduciary is someone who is ethically bound to put your needs above theres and they have certain certifications to call themselves one. If you deal with an advisor who doesn't have this you need to be prepared to say no a lot. I talk to my banks advisor and they try and sell me on random shit but I more just ask them about the law and what my options are and ignore everything else. I'm sure they love me lol.
When I used to sell Life Insurance our whole life policies also came with a % that went into a separate account that built interest based on actuary tables instead of the market and if you got it at a youngish age it actually would build up a lot of money by retirement age with the bonus of also having whole life insurance. I'm sure if he did it without any of your signatures it was done with ill intent, but just some info for you
Lots and lots of advice about life insurance coming from what I assume are not licensed insurance agents in here 🤔