Whole Life Insurance
Whole life insurance has been around a long time and provided those who purchased it with life insurance coverage. But the hidden aspect of whole life is that the purchaser is also paying not only for life insurance, but also into a savings/investment account. The idea of whole life sounds great at first when you figure that if you die you can name someone to receive a benefit. But you are paying for two products rolled up into one solution. The insurance company chooses how the money is invested and manages everything leaving you with no options.
Whole life insurance’s premiums are far more expensive the term life insurance by almost 20 times more! The extra you are paying is for a cash value aspect of the policy that most often has $0 value the first three years. But most of that money is paid in commissions vs actually putting money away for you. What other product do you buy gets bundled with a savings account? Do you even want that?
On top of that if you pass away the whole life policy will pay out the agreed upon amount. But the cash value aspect the insurance company keeps. You only get the cash value or if you cash out or the policy amount if you pass away, not both!
Term Life Insurance
Term insurance is set for a specific time period (term). The principal idea for life insurance is to cover your income if your pass away. If you or a loved one passes away and has an annual income of $50,000, I would recommend a policy of 10x that amount for $500,000. Now if you or your lived one passes away, their loss of income is now supplemented by the insurance policy. You can get far more coverage in term than you can in whole life insurance because its one simple product and straight forward.
Now let’s say you choose term life insurance, and you want to invest money. Great! But instead of being wrapped up with someone else managing your money with poor returns you can choose how to invest your own money. You can open an IRA (individual retirement account), mutual funds or any other avenue to build wealth and choose a trusted advisor who helps teaches you vs telling you how your money will be used.
When should you have life insurance? The younger you are typically the cheaper the price will be. If you think about it most people die when they are older so the risk of passing away increases with age. But if you follow the baby steps you will not need life insurance for your entire life. We just want to get you through the years where your income maintains your family’s ability to survive and thrive. So, to be straight forward do this as soon as possible after you have an emergency fund of $1000. We get insurance in the hopes we never have to use it.
If you want to know more about how a term life insurance policy can help protect your family, please reach out in this link and we can have a conversation. https://livedebtfreecoach.com/
If you are ready to talk to a professional about term life insurance visit the Ramsey Solutions Endorsed Local Provider page in this link https://www.ramseysolutions.com/insurance/term-life-insurance
Investing Outside of Life Insurance
If you want to invest your money you will find no shortage of people looking to take your money. I suggest you find and interview at least three investment professionals who have a proven track record and has the heart of a teacher. You should always be the decision maker in how your money is invested and your risk tolerances at the moment. Below are three Ramsey Endorsed Local Provides financial advisors I have recommend you talk to first.
Micheal Speed with Evershore Financial Group in Maitland, Florida https://www.evershore.com/team-member/michael-e-speed
Garrett Moore with Moore Financial Management in Bradenton, Florida https://www.moorefinancialmanagement.com/
Sebastaian Banchs with Signature Financial Solutions in Coconut Grove, Florida https://www.sebastianbanchs.com/