Disclaimer: These opinions are solely my own. Ultimately, individuals must conduct their own research and decide what they believe is best for themselves and their families.
Life insurance is not a subject anyone wants to think about, but it's necessary to protect your dependents. The question then becomes, what type of life insurance is the best choice? I believe many people are misled into thinking that their dependents will receive the interest earned on a whole life insurance policy. Additionally, the extra money paid for a whole life policy, as opposed to a term life policy, could be invested elsewhere, such as in retirement accounts, index funds, or mutual funds, earning a much higher interest rate that would benefit you because you get to keep it and pass it on to your dependents. In my opinion, Dave Ramsey explains the differences the most effectively.
Now, what about those nice, affordable life insurance policies that your work offers? What happens if you get laid off from work, switch companies, or become sick or injured and have to leave your job? Typically, you either can't take those policies with you, or the premiums rise drastically—like hundreds of dollars more a month. Try paying that when you don’t have as high of an income. Another compelling reason for choosing term life insurance.
Photo credit: Dave Ramsey
Some of you might already have a whole life insurance policy. You might decide to either keep or cash it in and invest the money elsewhere. Others may be selling whole life insurance policies, while some are contemplating whether term life, whole life, or a work policy is the best fit. And that's okay; we are all here to learn from each other. At the end of the day it’s each individuals own decision.
Photo credit: Dave Ramsey
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