When I was 22(M), my friend (same age) started working at NWM as a “Financial Advisor”. I was young and he talked me into buying whole life insurance because it would be the cheapest when I’m young and he phrased this as “Just another savings account for when you retire that’s not tied to the stock market”. I thought that was pretty compelling at the time (I obviously didn’t know much at all) but over the last couple years, I’ve made more money and put more into my 401K and roth. I have about $40K in those accounts and he now fully manages them for me. They have performed very well and I’m glad that I don’t have to manage them myself.
I am now 26 and I contribute around $100 a month to this whole life insurance and about $700 to retirement (between all accounts, roth, 401k, brokerage, etc.)
Last year I tried to get out of this life insurance and of course, he talked me out of it. He said I already accumulated money and that number would continue to grow and that I would lose some money if I tried to stop. He said eventually I would have $200K+ in this life insurance account to be able to take out of when I retire if I kept up at this rate.
The other thing is, he is a good friend outside of all of this and I trust him. He manages other people that I know moneys as well.
I just feel like I’m stuck. I really like the idea of knowing that if I pass before 65, this is money to go to my eventual wife and kids alongside what I have invested. But reddit has made me think otherwise, that this is a total scam and i’m getting played. I’m just unsure of what to do. Am I too deep into this now?
I don’t know much at all about money but I am trying to learn more. Any advice is really appreciated.
Am I making a mistake by not canceling my life insurance?
byu/Far_Suggestion9860 inpersonalfinance
Posted by Far_Suggestion9860
32 Comments
a good friend wouldn’t sell you whole life.
He is a good friend, but NWM training has brainwashed him so that he probably genuinely believes the things he is saying are true. You should pull the plug on this as it is overpriced as an investment.
If you have no dependents, you have no need for any type of insurance. Get rid of it.
[https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/](https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/)
The following provides a great foundation to build on.
[https://www.reddit.com/r/personalfinance/wiki/commontopics/](https://www.reddit.com/r/personalfinance/wiki/commontopics/)
He wants you to keep it because he makes money off of it. Where do you think that money comes from? You! It’s a (legal) scam, cash it out ASAP.
Hes not a financial advisor. Hes an idiot with a license to sell insurance working for a shit scam company.
And hes making money off that policy. At best he’s just stupid enough to believe the bullshit they taught him about the product
Just cancel it. You could even just tell him you need the money if you do t want to deal with him hassling you about closing the account.
I wouldn’t necessarily call it a total scam, but he’s profiting from you keeping it there, and your money would have better returns elsewhere
Crunch the numbers yourself. See how much that $100/mo would grow in the stock market assuming 10% annual returns after x number of years. Then see what the whole life insurance would grow into using their assumptions. It will be lower. Then decide if that delta is big enough for you to want to reconsider.
If they discuss it is more than just retirement and also functions as life insurance. Subtract out what a 20-30 yr term life policy would cost from your cost analysis for just investing the money.
Generally speaking, whole life is not financially optimal by a wide margin and insurance exists because they take in more than they pay out, so you have to ask yourself why you want this product.
I would get rid of it. Insurance policies and investment accounts are two different things that tend to get expensive and inefficient when combined.
Also: I try to include this info when Northwestern Mutual shows up in a discussion, mostly for future readers who search this sub.
The item below was started by a new NWM salesperson here some time ago – but the discussion is revealing about how they work:
https://www.reddit.com/r/personalfinance/comments/11jz9bp/not_really_sure_whats_wrong_with_northwestern/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button
If you really read through the voluminous comments, you’ll find a section where I ask the original poster about the commission structure. **The OP admitted that the whole life policy sales commission was 50% of the first year’s premium,** then a much smaller percentage into the future. This fact alone will help you understand why they are so aggressive about trying to close a sale.
Cancel it. You don’t need whole life. And you don’t need even term life insurance if you are single and no dependents.
Whole life insurance doesn’t do anything a regular investment account does except it costs way more and returns less. If you’re worried about any dependents, get a regular life insurance policy for like 1/20 the cost and put the rest in an index fund or your 401k. Only keep it if your mental discipline is so poor that you would not save that money if it wasn’t going to a whole life policy (which is to say, throwing 1/3 or more of it in the trash).
It’s a waste of money with the assumption you instead take $20/mo and buy a $200k term life insurance and put $80/mo into your retirement account.
He honestly probably hasn’t actually done anything for your accounts which is why they are doing so well. The SP500 return since you started working with him has been about 115%.
$100/mo isn’t the worst price to pay for a friendship, but it’s certainly suboptimal.
Policy is not worth much. Dump it and invest in index funds
Not only should you cancel the insurance, but you should move all of your investments to a self-directed account at Fidelity or Schwab. Today.
Friends don’t let friends buy whole life. Ask him what his commission is and watch him squirm.
He is **not** your friend. *You are his mark and he has been feeding you a distorted series of statements that probably stay just on the legal side of lying to induce you to buy a horrible financial product that pays him fantastic commissions.*
Get out as soon as legally possible and **never trust this guy again.**
100/month in a modest investment earning 6% would give you about 200k in 40 years.
100/month for 40 years in a fund tracking s&p500? Using an average 10%/yr, about 600k.
I’m not seeing a value added with the life insurance plan.
Can I just add that if it’s 15 bucks a month – you can still get term. I had no kids but my parents were potentially facing some health issues and my sister had one kid – between all of them I was totally down leaving them each 100k if something happened to me.. but I guess it depends on your family dynamic..
You’re still in the surrender period so you will lose money on the surrender. My advice would be to ride it out until the surrender period is over (usually 10-15 years) and then either surrender the policy or do. 1035 exchange into a variable life policy if you still feel that life insurance is valuable. You do the 1035 to avoid taxes on the earnings. And you can 1035 to another life policy or an annuity. And by all means consult a CFP before you make any decisions.
Yes you should cancel. [https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/](https://www.whitecoatinvestor.com/debunking-the-myths-of-whole-life-insurance/)
>When I was 22(M), my friend (same age) started working at NWM as a “Financial Advisor”.
This is unfortunately the NWM playbook: get aspirational college grads to sell their friends shit (see: expensive) products they absolutely do not need.
If you don’t have a spouse or dependents then you don’t need life insurance *period.* If you have a family then yes you need life insurance, but *term life* not whole life. Whole life is suitable for the top 1% of earners in this county, no one else.
I know whole life is sold as an investment vehicle, but insurance is insurance. You have auto insurance in case something happens to your car. You have home insurance in case something happens to your home. You have life insurance in case something happens to your life. The way our lives end can vary, but they will all end.
My mom died of cancer in November and she refused to quit working because her life insurance was tied to her job, but her life insurance was the first benefit we had access to when she was gone. It paid out in days. I’m still trying to get access to her investment account and she’s been gone for almost three months.
I won’t join the chorus of people saying to cancel it because you never know if you will be insurable in the future. I am in my 40s, have a spouse and three kids, and am considered uninsurable due to a health issue I developed in my 30s. I could probably find coverage now, but it would be cost prohibitive. You have to figure out what makes sense for you. I would find out when/if the policy will pay its own premium before you cancel it though.
$100/month from ages 26 – 65 in the market returning 8% a year will be worth $300,000.
I could give your friend a pass for selling you a shit product at 22 when he just got out of college and didn’t understand what he was doing and this job needed him to have a client base. But it’s been four years and he actively tried to talk you out of it when you looked to change. I’m not saying he can’t be fun and a friend, but he’s taking advantage of you and it’s not someone I’d trust in a time of need.
Get rid of whole life . We learned that in our late 20s . Got inexpensive term life and invested the rest
everyone here is optimizing CAGR. whole life optimizes survivability. that’s why banks love it and reddit doesn’t
Your policy cash value *grows* tax-deferred but eventual withdrawals are fully taxable (death benefits are not).
If you compared side by side with traditional IRA contributions, your dollars will get you three to five times as much money (or more) by retirement in the IRA. Why? The policy cash value is limited to a bond-like return, and is regularly reduced to pay costs of insurance, fees, and your “friend’s” commission.
In an IRA invested in no-load, low fee ETFs and mutual funds, none of those costs apply other than the fund’s actual expense ratio.
> he is a good friend outside of all of this and I trust him
Your trust is misplaced. He’s putting his own self-interest ahead of your own.
I dont agree with Dave Ramsey a whole lot but send this brother to Ramsey Solutions and call in to say “im 22 and bought whole life insurance”.
Money manager makes money off their portfolio. For example:
Your portfolio:$100,000
Manger makes: 2%
Year 2025 gains: 4%
Total: $4,000
Manager takes:$2,000
End of the year total: $102,000
Year 2026 gains: -4%(market not doing well)
Portfolio drops to: 97,920
Manager takes: 2% of the above ($1,958)
End of the year total: $95,962
(You take a double hit)
Money manager win when you win or lose. They win in the end.
Also, think about how much those 2% adds up to. If your gains are about 5% per year(which is quite realistic), your manager takes almost 50% of the possibile gains you can have in the course of your life.
your “Friend: that sold you that Product, is Not a fiduciary financial adviser, he is a salesman, and he sold you on buying a product you didn’t need..
if he was a fiduciary he would have had to tell you how bad of a deal this is for you, and how much money you buying that product will make for him and that company. but he is Not a fiduciary, he is a salesman.
he may not even realize how bad of a deal it is for you because these companies (that he works for) really push this onto their salesmen and are willing to lie to their salesmen to convince them its a great thing when its only good for them as a company and bad for the individual.
on a side note: and money your policy has made is because the stock market is up so much over the last couple of years, not because of him selling you that product. had you put that into a vanguard fund yourself, you would have even more.
if you don’t have kids that would become homeless and starve to death if you died, then you don’t need life insurance. get out of it and don’t let your friend or any of his bosses to stop you from doing so.
If you paid into it long enough, you might as well stick with it. Else all those money you spent was for nothing.
I got one I bought as a grad student decades ago. Well for the past 15-20 years it had been paying for itself and I have paid anything. It’s still increasing in value. I looked at making it go away but the tax consequences was kinda high so I guess I’ll wait till I die and my wife can go a nice trip. Don’t really need the money now
The Guardian had a recent article on NWM, their sales practices and whole life push, definitely read it: https://www.theguardian.com/business/2025/nov/24/northwestern-mutual-insurance-jobs-hiring
1) No one is getting rich off a $100 a month. He’s not telling you to keep it because of some self interested pot of gold that he is getting. You don’t tell us what the death benefit is and what the cash value is or what sort of dividend you are getting. I have no love for NWM but the knee jerk Reddit reaction of outrage and suspicion is predictable.
2) Life insurance is an expense but it is not without value. If you are able to afford this and you are fully funding your Roth account and more, keeping this is not unreasonable. Ask for an in force illustration that will let you compare where the account currently is compared to the projection that was created (it was- you may not remember or maybe it was not emphasized but it is absolutely available) when you bought the policy. This will give you an idea about the “permanence” of this policy. In other words, is the premium I’m paying enough so that after I pay for the annual insurance expense, is there enough left over to accumulate and then allow me to someday stop paying the premium or continue the premium and my money really does accumulate with real tax advantage for me to use in the future?
3) The buy term and invest the difference guys are not “wrong” either. You will likely have a bit more at age 65 but you won’t have any life insurance and using your money comes with real and large tax bills that you avoid in the insurance world. (Just for fun, ask your friend or get an internet quote on a 10yr term policy for a 65 year old with average health- you will be average- it will be laughably expensive.) The return differential between a well organized insurance policy and the after tax return on a brokerage account plus the expense of a long term term policy is a lot smaller than the fist shakers on Reddit care to know.
Cancel it and shop around for a cheap term policy, assuming you are healthy. Some people say to wait until you have actual dependents, but life insurance will never be cheaper than when you are young and healthy. You could get a 30yr $500k policy for relative peanuts, and then supplement with an additional policy when you actually have dependents.