Is life insurance a good way to save for retirement?


For most people life insurance is not the best way to save for retirement, either because of the risk or because the guaranteed return is low.

Term policies don't include a cash value or investment component, so they aren't relevant to this question. Permanent policies, however, accrue a cash value over time and include an investment component, which is why they're occasionally marketed as retirement savings products.

Of the types of permanent policy--whole, universal, variable, and variable universal--only whole guarantees a cash value, but the rate of return is conservative. The other types aren't guaranteed and can lose cash value over time.