Wondering if Universal Life Insurance is a good investment vehicle for my young sons?

MY SONS ARE AGE 18 AND 20 . THEY WOULD LIKE TO INVEST $100/MONTH I should mention we live in Ontario Canada

Public Comments

1. I don't see why people that young need a death benefit unless they're starting families very early. Seems to me you'd save a lot on expenses by setting up an automatic investment plan with a hyperaggressive mutual fund. Many will let you in with $100 if you set up automatic deposits, at least in the US they do. Worry about death benefit only when you need to.
2. Dont use life insurance as an investment. Their money could be better spent elsewhere where the entire $100 per month gets invested rather than an insurance contract where a big chunk of the money goes towards admin charges, expenses, insurance,commissions, etc..
3. Absolutely not. Why? 1) Your investment may not be meeting your needs. 2) Your investments can be used to pay the premiums (that's why premiums are flexible). 3) If you want to use your investment for personal use, you have to BORROW the money and pay it back! 4) If you want to use your investments without having to pay it back, you would have to cancel it. 5) In the event of your death, all your investments you put into the life insurance are kept by the company (unless it is stated in the policy). Since your sons are 18 and 20, they are old enough to start their own investments. If they are working, they can start a ROTH IRA. Roth IRA are tax-deferred investments, so any capital gains and dividends are reinvested without taxes. And when they become 59 1/2 years old, anything they take out of the IRA is tax-free! Since they are young, they should invest in aggressive growth funds. So far, the best performing mutual fund in the past 25 years has been Legg Mason Partners Aggressive Growth Fund (symbol SHRAX for Class A, SAGBX for Class B). It has earned an average rate of 14%. Anyway, I would get rid of Universal Life and get term insurance. Why Term? 1) Premiums are inexpensive and you can get the maximum coverage available. 2) You can invest your money in a different investment vehicle (such as IRAs, 401k, variable annuities, mutual funds). 3) As you get older, you will have less financial obligations to pay (like mortgages and credit cards and loans), so you don't need as much coverage when its time to renew your term. 4) As your investments grow and it grows above your coverage amount, you probably don't need life insurance anymore. Anyway, I don't know your relationship with the agent who sold you your life insurance, but the main reason why he sold you Universal Life is because he/she gets paid huge commissions on it as compared to selling Term. You should ask the life agent what kind of life policy does he/she own. More likely he/she owns term (if he/she doesn't have any, then there's no reason to do business with him/her).
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