Social and Behavioral Sciences Commons^™

Competing Life Insurance Purchasing Strategies: Whole Life Versus Buy Term Invest The Differences, Jordon Hastings

Honors Theses

Financial experts have been conflicted for decades in regards to the most effective strategy for purchasing life insurance. Specifically, is buying an expensive whole life insurance policy the most appropriate solution, or is purchasing cheap term insurance and investing the rest of the money in a side fund more effective? These strategies were compared side by side across a variety of scenarios with varying account allocations, time horizons and tax treatments. Based on our results, buying term and investing the difference is the most appropriate solution across the majority of the scenarios that were tested. This was due mainly to …