retire48in2008, Whole Life is includable in a complete financial plan. Breifly, as a begining to your question, here are 16 reason which WL provides, and NO other vehilce completely provides; (some are obvious) Premature Death Benefit, Disabilty Payout, Protection from Creditors, Increasing Death Benefit, Builds Net Worth, Generates a Conservative Rate of Return, Minimal Risk, Liquidity, Tax Advantage accumulation, Alternate Credit Source, Tax Advantage Withdrawals, Income Tax Free at Death, Form of Saving, Systematic, Flexible Funding Options, Flexible Distribution Options. Make NO mistake, I am not stating to use WL as your only planning tool. It is used to provide peace of mind, while contributing to your entire portfolio on a limited percentage of your entire portfolio, while avoiding an irrevocable transfer of wealth, which Term insurance clearly can not accomplish.
Let's see here. Can I do that thing?
Premature Death Benefit - Somebody Else's Problem
Disabilty Payout - Compensation for inability to earn wages; I already earn no wages...
Protection from Creditors - What creditors?
Increasing Death Benefit - Somebody Else's Problem
Builds Net Worth - I can already do that; with lower expenses and a higher return rate.
Generates a Conservative Rate of Return - I can already do that; with lower expenses and a higher return rate.
Minimal Risk - I can already do that; Diversified portfolio across a broad range of investments with low correlation. (E-Z fix, Wellington/Wellesley...)
Liquidity - Yup, not a problem.
Tax Advantage accumulation - Yup.
Alternate Credit Source - Yup
Tax Advantage Withdrawals - Yup; Long term capital gains rate for taxable/Roth IRA
Income Tax Free at Death - Somebody Else's Problem, but proper estate planning addresses this. Taxable accounts get that nice basis step-up. Roth IRAs have additional nice behaviors.
Form of Saving - *Snort* So is a passbook savings account, with lower fees and better real world returns.
Systematic - As am I...
Flexible Funding Options - Check...
Flexible Distribution Options - Oh, yeah...
It's good to be a Boglehead... I believe I'm covered pretty well here.
Peace of mind? Check.
Avoid irrevocable transfer of wealth? Check (until death anyway. That'll give ya an irrevocable transfer of wealth...)
In general there are only three kinds of insurance I can see for a Financially Independant Retired Early person:
Medical - Individual medical insurance is pretty much a necessity, unless the FIREd person is lucky enough to be under some sort of lifetime plan courtesy of their last employer. Either way, they need coverage until Medicare eligible, and will probably want a supplement then.
Long Term Care - The FIREd person should consider this one carefully. Unless their financial independence is so solid that they can self-insure, that is, cough up years of long term care cash without endangering retirement funding for themselves or others.
Term Insurance - MIGHT be a good idea if a significant slice of retirement income is coming from a pension or similar cash stream that ends at death with a poor to no survivor benefit. Figure enough to open a single payment fixed annuity to replace the lost income. (See, you could sell an annuity! Not a very profitable one, but it's an annuity!)