Is family banking risky?
Whole life cash values are not tied directly to the stock market, and guarantees are backed by the claims-paying ability of the insurer. The main risks are funding a policy you can't sustain or surrendering it early, when surrender values can be lower than the premiums paid.
Key takeaways
- ✓Cash value isn't directly exposed to market swings.
- ✓Guarantees depend on the insurer's financial strength.
- ✓Early surrender can mean getting back less than you paid in.
Managing the real risks
Choose a financially strong mutual insurer, design the policy for your actual cash flow, and commit to the long term. We explain the guaranteed and non-guaranteed elements of any illustration before you decide.
What isn't guaranteed
Dividends are not guaranteed, though many mutual insurers have long histories of paying them. Policy loan interest rates can also change depending on the contract.
For educational purposes only. This is not tax, legal, or investment advice. Policy performance, dividends, and loan terms vary by insurer and are not guaranteed except as stated in the contract.