Q: Do I Need Life Insurance For My Whole Life?
The answer to this question is an emphatic NO! The Insurance Industry has done an excellent job over the decades creating and reinforcing the concept that you need Life Insurance for your “Whole Life”. Hence the name of their most popular product. The reality is that you need Life Insurance for a period of time that your family cannot maintain their financial lifestyle due to a lack of savings or debt. By purchasing Term Life Insurance , with rates locked in for the time period that reflects the risk related to debt and savings, you are able to free up funds that can be used to pay down debt, establish your emergency fund and grow your savings long term. It makes little sense to overpay for a product now (Whole Life) so you can have protection in later years when through a proper financial strategy you won’t even need Life Insurance. You are paying higher interest rates on credit card and other types of debt than you receive on your cash value savings within a Whole Life plan which makes the extra expense even more difficult to make financial progress. Remember as you are attacking debt and increasing your savings you are on a path to reducing and eliminating your need for life insurance all together so in the future those funds can be used more effectively through other investment options. There is no financial justification of spending dollars on a product you no longer need just to get a certain rate of return. The expense of the insurance draws away from the true investment value you receive which is poor to begin with. In addition, since your savings and emergency fund are established any final or burial costs should be paid from these funds since buying Life Insurance for these known expenses is also a waste. Click here to learn more about the debate of “Term vs. Cash Value” plans.