Nickels and Dimes #5

lock-moneyThe greatest gift bestowed on man is his ability to reason. Unfortunately, we have a tendency to be unreasonable when it comes to our money. Some of us are stingily frugal while others live well beyond their means; the few lucky ones strike the balance that allows them to prosper not only monetarily, but socially and mentally as well. I don’t believe that money is or should be the center of our lives. It is a tool that we can use to better ourselves and our world and should be used as such.

But before you can use your money for good, you have to earn some and protect it. You need to do your best to insure your and your family’s financial future. The way to do that is through life insurance. That opens the age old argument as to which type of insurance is best. For our purposes I’m limiting the discussion to whole life vs. term life. That keeps us from being bogged down in the subtle differences between whole, universal, and index universal, while allowing us to focus on the primary difference–the investment component of whole life which subsequently makes it more expensive than term.

There are any number of financial advisors that will tell you to buy term and invest the difference between what you pay and what you would pay for the same amount for whole life. This is fine advice if you have the will power and the wherewithal to stick with the commitment and make those investments! If you don’t and if you are one of the many that prefer to let others manage your money (and there is nothing wrong with that), then a whole life policy may suit you well.

Regardless of which option you choose, make sure to shop around a little before buying. Take your time, look at several policies, assess the strength of the company backing the insurance and then use your ability to reason and be honest with yourself.

Then choose the product and policy that suits you best.

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