At times, we read other articles written by financial advisers that talk about the need for life insurance ending at a specific age, maybe when the kids are grown up, or when retirement time comes. But by stating a lack of need really belittles all the many positive benefits various life policies bring to the table.
For example, my wife and I each own a participating whole life insurance policy that provides us a guaranteed death benefit with guaranteed cash value build up (plus upside potential) growing tax deferred and will be withdrawn tax free. We will use it to supplement our retirement income and when the cash value runs out, each policy will be ‘paid up’ (not requiring anymore premium payments) offering over 100K of tax free death benefit to our heirs. Not to mention if along the way, we encounter a terminal illness or a chronic illness, we will have the option to advance the death benefit if needed to help pay for medical expenses or anything else we want to spend it on. This one financial instrument covers a lot of bases!
And yet we still hear the chorus from securities advisers to ‘buy term life insurance and invest the rest’, as if everyone can be placed into the same bucket or scenario. Frankly, the public should be insulted. There is no denying that a good no-load set of mutual funds is a great way to invest, but diversity is the key and mutual funds/stocks/bonds offer no guarantees.
When planning your financial future, keep an open mind to a combination of both investment and insurance strategies to achieve your goals. The combination will give you peace of mind and the building blocks to tackle any financial obstacle that comes your way.
And remember, you shouldn’t ask yourself if you need life insurance, but instead you should WANT all the benefits life insurance strategies offer.