My understanding is that choosing a term life insurance policy and investing the difference between the whole and term would give me a higher rate of return. Given this, why would someone decide to invest in a whole life insurance policy?

-- Jake

It's important to understand that Life Insurance and Investments are completely different instruments and they may perform differently and are taxed differently. In many circumstances it makes sense to blend the two. Each decision should be made to custom solve a particular goal.  At the end of the day it easy to remember that Term Insurance pays out only IF you die while Permanent Insurance pays WHEN you die.

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