Life Insurance should not be viewed as an investment. Its purpose is to insure.
It's always best to buy Term Life Insurance, not Whole Life Insurance. Term is much cheaper. By not buying Whole Life Insurance, the money you save can be invested in more appropriate and lucrative ways.
Also, remember that the cost of Life Insurance increases substantially as you get older. The intent is to retain Life Insurance during your younger years while your obligations ( i.e. protecting your wife and kids, covering your mortage, replacing your income ) are greater. As you get older and your Net worth increases and your responsibilities decrease ( i.e. mortgage payments, kids move out, etc ), you can begin moving away from Life Insurance.
Your goal should be to get your Net Worth to a point where it's significant enough to take care of what you leave behind. Hopefully, your Net Worth will be your legacy, not the Life Insurance funds.
No comments:
Post a Comment