At the outset I should confess that I am a whole life freak and have been one for more than 50 years. However, I believe my own experience with this product, coupled with the experience of others, will more than justify my conviction.
I will start with my own personal experience. When I retired at age 69 I converted all of my policy cash values except one policy to joint and survivor annuities, which are now and have been for 16 years, providing us with a steady and comfortable income. At a time when others are seeing their 401(k)s and other investments going into the tank, we are unaffected. Our cash flow continues steady.
The one policy we kept also has an interesting history. It was originally taken out to assure our son’s college education. Our reasoning was that the cash values could be used if we needed help, but if I had died, the $100,000 face value would have provided the full amount needed to put him through college. But neither of those events occurred and the policy remains in force. The dividends currently pretty much equal the premium so there is no cost to maintain it. The cash value is now over $80,000 and we regard it as a reserve for long term care if we ever need it. Oh yes, I know I could take that fund and invest it elsewhere and maybe do better. Or, on the other hand, if I had done that, today it might be worth less than $40,000. At my age guarantees mean a lot.
Let’s go back to the beginning of my career. The New York Life training program required new agents, as one of their first projects, to interview two prominent citizens to get their views on the value of life insurance. The first one I interviewed was H.R. Askins, head of a very successful chain of auto parts stores in Arizona. Additionally, he had served as the national president of the Auto Parts Dealers Association and as Under Secretary of the Navy during President Truman’s administration. He told me that his extensive life insurance portfolio was one of his most valued possessions. He said that because of it, he was able to take risks he would otherwise never have considered. He said some of these risks made millions while a few were flops, but it was his back-up insurance portfolio that made his success possible.
My second contact was Dr. Charles Kendall, minister of the oldest and largest Methodist church in Arizona. He too extolled the virtues of life insurance, especially in keeping families together in time of need and when death called. He cited a number of specific examples where he had been involved.
After talking with these two gentlemen my conviction began to grow.
One of the most successful merchants in Arizona and a place where my mother-in-law worked for 44 years was Switzers, a ladies ready-to-wear company. Switzers over time grew to have stores in Arizona, New Mexico, Texas and Nevada. But according to a report on TV it all started in the 1920s with a $1,500 policy loan by the founder. I have often wondered what the return on that $1,500 was.