Forbes: Why Investing and Insurance Shouldn’t Mix (Despite What TikTok Says)

Published in Forbes on July 6, 2022

Meager Investment Returns

According to financial planner David A. Fowler of High Mountain Financial Coaching, life insurance products just won’t give the same returns over time as a disciplined well-built investment portfolio will.

For example, the S&P 500 has averaged about 10.5% give or take over the last 50 years, he says, yet insurance products that are designed as protection vehicles don’t offer returns anywhere near that range. Fowler adds that whole life and universal life policies can have you paying premiums for 15 to 20 years just to break even in terms of the value of the policy.

Fowler also says that many insurance products are tied to the returns of financial markets, such as variable universal life insurance. However, these policies still have mortality and expense risk charges, as well as additional layers of fees from the underlying funds.

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