Suze Orman Life Insurance Advice [Top Reasons Why You Should Get a Second Opinion]

Suze Orman’s Current Views on Term vs Whole Life Insurance

Suze Orman’s views on life insurance have evolved over the course of her career in the financial industry. From selling whole life insurance policies as a financial advisor she has changed her tune and instead advises individuals to buy term and invest the difference rather than purchase permanent life insurance products such as whole life.

Suze believes that permanent life insurances such as whole life or indexed universal life (IUL) are bad investments, much like other financial entertainers such as Dave Ramsey. In her opinion, she feels you would be better off investing the money you save by buying cheaper term life, than by investing in life insurance.

Even if you don’t invest the entire difference, her claim is that you are would do better to spend it elsewhere to avoid what she sees as the high fees of whole life. While there is no doubt that there are situations where an individual is better served by purchasing term life vs whole life or other types of cash value insurance, there are a number of benefits to be gained from buying these products that Suze doesn’t address.

As a result, her position in this regard has been criticized by some insurance experts as too simplistic. Her advice to investors to fire their advisors if they recommend whole life insurance, or other types of permanent coverage, also seems extreme.

And while we agree with Suze Orman that life insurance isn’t meant to be an investment this overlooks the fact that permanent life insurance in the form of cash value life insurance has a number of features which makes them an excellent alternative savings vehicle.

The Case for Whole life and Other Types of Cash Value Life Insurance

While buying term life and investing the difference may work for some investors, for others the benefits associated with purchasing whole life and other permanent life policies make buying such policies well worth considering.

Foremost among these benefits is the ability to use a cash value policy such as participating whole life to act as your own banker by taking a policy loan from your account while still earning interest on your remaining balance.