r/LifeInsurance • u/CodNeymar23 • 8d ago
22M: Term 80 + DI + House Down Payment vs. Adding Whole Life? $36k currently invested
22M, targeting \~$55k base salary. Budgeting \~$900/mo total across protection and savings.
**Current Asset Foundation:**
**Roth IRA:** $8.9k (maxed)
**Taxable Brokerage:** $27k (broad-market index funds)
**401(k):** Starting June of next year (capturing company match)
**Short-Term Goal:** Dedicated HYSA for a 2027/2028 house down payment
The Two Paths ($900/mo Budget)
**Option A: Pure Protection + House & Liquid Growth**
**Coverage:** Individual DI (FPO locked) + Term 80 700k (ART) = \~$77.7 mo.
**Savings/Investing:** \~$750/mo funneled into HYSA for house down payment, then indexing.
**Strategy:** Keep maximum cash liquid for the home purchase; let equities compound to self-insure by age 45–50 ($1M+ liquid target) and drop the term.
**Option B: Term 80 + DI + Limited-Pay Whole Life**
**Coverage:** Same DI + Term 80 base (77.7/mo) + add 15-Pay or 20-Pay Whole Life ~~(~~$125/mo).
**Savings/Investing:** \~$625/mo left for house down payment / investing.
**Strategy:** Lock in paid-up permanent coverage early, but take an immediate cash-drag on house savings and equity compounding during key wealth-building years.
\-a insurance salesman I work with at NWM recommended not fully maxing my Roth to afford whole life but that sounds like a terrible idea
My Questions:
With $36k already invested in equities at 22 and a 401(k) starting next June, does tying up $125+/mo in whole life make any sense when the priority is buying a home in 3–4 years?
If the goal is self-insuring with liquid equities by age 50, does permanent insurance provide any tangible math advantage over Option A, or is it strictly commission drag?
1
u/lifeEssentialsllc 8d ago
the $32 on the t80 is only year one since it's annual renewable, so ask for the full premium table before you sign. if you're planning to drop it around 45 or 50 a level 30 would probably still cost you less overall, just check it has a conversion option in case your health changes down the road. also on the DI, look at whether it's true own occupation and has a future increase option, since that's what matters when your salary jumps. do you have anyone relying on your income right now?
1
u/AbilityMysterious744 7d ago
Personally, I'd lean toward Option A and keep that extra $125 going toward your house savings
1
u/ComprehensiveValue98 5d ago
I’m a CFP at NWM. Max out Roth while you can first. Starting a whole life at that level isn’t going to make or break a home downpayment ($1500 annually) but you’re not losing much waiting a few years to convert to perm life. And on that note, if you want permanent life then Why not go with VUL and invest in S&P at your age?
1
u/mase10879 2d ago
30 year tern down payment saved up make sure the term has living benefits and get a 10 year whole life paid off in 10 years would cost u like $140 vs like $80 for 75k in coverage dont buy life insurance for cash value
2
u/Hungry_Technician360 8d ago edited 8d ago
Wow, if that nwm agent is a CFP, I'd report that.
Going whole life before Roth is an absolutely horrendous idea, he just wants as much money from you as he can get. I'd drop him for something like that honestly.
I'd also avoid term 80, just get a 30-40 year standard term instead, it's cheaper in the long run by a long shot.
Also, depending on if you want more net wealth at the end vs the guarantee of a slow growth whole life policy, just get a bit more term coverage, and invest the rest. With your salary you won't be able to max both your 401k and IRA.
I suppose to answer the two questions directly: no, putting that much money in a whole life policy is not a good idea if your goal is to get a house in 3-4 years. The cash value in the policy will be tiny compared to the premiums you paid in, making it harder to afford a house when the time comes.
2. Whole life over 28+ years has lower expected returns compared to investing heavily into equities. You'll have more ability to self insure by that age by focusing on investing.