CNBC recommending WHOLE LIFE INSURANCE?
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Cash in an interest bearing account is not a security. A t-bill is.
What happens if you have $10,000 of cash and interest rates very quickly skyrocket? Your cash won't be worth less than $10,000. If your T-bills are valued at $10,000 before this interest rate change, they will lose value. Securities go up and down in value. T-bills are a security. Cash in a savings account is not.Deekay - agree that by definition a Whole Life Policy can not be defined as an Investment but does qualify as an Asset. The Demutualization issue adds a " bonus " for the Policy Holders and off course for the Company the ability to access the markets.
In other times and markets as you may recall a number of Insurance Companies became very active in demutualizing and in most cases the company and the shareholders were rewarded fairly well in the process. In the long term, demutualization hurts all involved except the top executives who make a mint. I don't think that it's any coincidence that the most highly rated insurance companies are the mutual companies. Once a company demutualizes, their priorities are to the stockholders and not the policyholders. Why do you think that mutual companies primarily sell participating whole life policies and stock companies primarily sell universal life. (Participating WL primarily benefits policy holders. UL primarily benefits stock holders.)Security in the form of Instrument ie. T-Bill is that what you are referencing? If you deposit $10,000.00 in the Interest Bearing Account and your receive xx percent in Interest at the end of the month you will have $ 10,000.00 Plus the Interest of xx dollars - how does that equate to less than 10K plus the Interest Payment?
Anonymous , I absolutely agree that the Value is much more than the personal CSV to the Whole Life Policy. As to the tax matters since we are dealing with two different situations in terms of Canada versus the U.S.A. , I will leave that to the accountants. As to the issue of T-Bills and Cash ( Interest Bearing Account ) the loss could be the defined as lost opportunity.