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The Truth about Life Insurance

by Seth Mela

About two years ago I had the honor to attend a small financial presentation given by Dave Ramsey.  It was very informative and enjoyable up to the point where he told the audience that they “should never, ever, buy Whole Life Insurance”.

I understand why Dave said this.  He’s talking to a special niche of the public. Typically they are trying to get out of debt and every penny they earn is used to get themselves back on their feet and get to a place where they can begin saving money.  For those individuals I would suggest that buying Whole Life Insurance should be a goal to achieve a bit later when financial stability is achieved.  But under NO circumstances should a financial professional that actually understands how money truly works EVER say that Whole Life Insurance is a bad financial choice.

If I were to go into all the reasons I say this, you’d get bored, stop reading and probably begin hitting yourself in the head with a hammer. So I’ll just say this; Term Insurance is like renting an apartment.  Whole Life Insurance is like buying a home.  One is certainly cheaper than the other in the short term, but in the long run, renting is a complete waste of money and owning a home, if done right, builds an asset you can use later.  Whole Life Insurance provides SO many more options for you to use your money at a later date and can even be designed so as to not cost you ANY additional out of pocket cost. 

Many financial speakers like Dave Ramsey speak to a large audience and use large sweeping generalities.  He’s great when it comes to establishing a budget and formulating a strategy for getting out of debt. But when it comes to what to do with YOUR money, you need to talk one on one with a professional that understands the economy and how to coordinate all the financial aspects of your life to work together.

There are many out there… you just have to look carefully.

I am no longer in the business, so if you want to ask for more information on what to look for in an advisor, feel free to email me at Seth.Mela@wsau.com