For years a debate has raged in the life insurance industry.  Insure with Cash Value Life insurance policies (whole, universal, variable or variable universal life) or Term Life policies.  Many career insurance agents perpetuate a myth that over a longer period of time cash value policies are better deals for most people versus buying low-cost term life and investing the difference.  What a close examination of the numbers demonstrates is that only a small percentage of people- other than the selling agents- benefit from using cash value life insurance.  What pioneering books like How Your Life Insurance Policies Rob You and What’s Wrong With Your Life Insuance clearly and convincingly depict is that most people ought to primarily buy low-cost (convertible) term life insurance to cover their risks and invest the premium savings.  Under today's tax rules, if you qualify for the ROTH IRA, it is a virtual certainty that you should buy a term life policy and invest the difference within a ROTH IRA.  So why is it true that "term life" is usually the right answer?  It’s the math.  What I have found in over 90% of cases, is that people will end up with more money buying term and investing, rather than buying a cash value policy.  Only for clients in the higher tax brackets (couples with household income over $160,000, individuals with income over $110,000) does this relationship fade.  This has been the case for about two decades now, despite the constant attempts of many agents to sell high commission cash value life insurance to almost everybody.  Unfortunately, in a sales situation, trying to explain mathematical principles is next to impossible. That’s why career "cash value" life insurance salesmen still make money. They pitch nice ideas and feel good concepts.  Too bad that for most Americans, and everyone else in the world now, insurance doesn’t really work based on feel-goodisms. Too boot, many agents don’t understand how to make cash value life insurance work most effectively even when that type of policy is appropriate. Most attempt to compete on price in an apples versus oranges enviroment rather than educate a client about the tax and financial issues involved.  As a result, very few agents structure cash value policies correctly even when those policies are appropriate. In most cases, today’s career "cash value" agent either has to completely avoid the math and various financial explanations or has to lie to sell a policy.  There are very few exceptions to the buy term and invest the difference rule. Below, I cover the exceptions, because for those who can use cash value insurance, it is a tremendous tool.   Here are some of the common instances "cash value" life insurance can make a lot of sense.  For:   People who don’t qualify for the ROTH IRA (individual income over $100,00/year; couples over $160,000/year) People with Pensions. People without pre-tax retirement plans (401k, 403b, 457...) at work. People over 54 years of age.  Families with Estate Planning issues.  Couples seeking an alternative to Long-term care insurance.  Businesses with Key-Man issues or Buy-Sell arrangements. Business Owners seeking tax-advantaged savings and compensation. Business Owners creating/funding a business succession plan.  Self-Employed.  In individual cases where some permanent protection is desired there are ways of combining term and permanent coverage to create a very advantageous plan, but, it is more complex than most agents acknowledge or understand.  For expert knowledge and service, please contact me for free consultation.  Here is a simplified example to consider: A man age 30 qualifies for preferred non-smoker underwriting for $500,000 of coverage.  He can: Buy a cash value life insurance policy. -OR- Buy a 30 year term life policy to get him through his mortgage and child raising years, and invest some money into a Roth IRA.  Let's look at the real numbers: The cash value policy with company A (I won't mention company names, but I love the little cartoon doggy in their commercials) policy funded at the guideline premium of $1923 per year will have a cash value of $87,567 in year 30 at a gross interest rate of 8%. A 30 year term policy with company B would cost only $545 per year.  If a person takes the $1378 per year premium difference and invests into a Roth IRA with a gross interest rate of 8% / net interest rate of 6% (presuming broker expenses of 1% per year, and investment management expenses of 1%), would have $108,942 in the Roth IRA in year 30. As you can see there is a fairly large difference in cash value of the life insurance and the Roth IRA.