Today on the Finance Flash Go! podcast, we’re going to talk about whole life insurance.
First, what is life insurance for?
Life insurance is insurance needed if you have anyone depending on your income to live. This includes spouses, partners, kids, etc.
Don’t have any dependents? Then you don’t need life insurance. Are you and your dependents financially free? Then you don’t need life insurance.
Unlike term insurance, which lasts only for the “term” that you buy it, whole life insurance is designed to pay out when you die, no matter when that is, even if that’s at age 95.
That is an upside, I guess, to whole life insurance.
But, there are downsides, too…
However, there are a whole lot of downsides that make whole life insurance really not a great or even mediocre option for 99% of physicians out there.
This is not a comprehensive list but the downsides include:
- It is wayyyy more expensive than term life insurance;
- The returns are low;
- These bad returns (often negative) are front loaded;
- Most policies are surrendered prior to death, meaning that those who bought them found they did not serve a purpose; and
- Many more!
So, don’t buy whole life insurance, especially if you are a resident.
Buy term life insurance that you can drop when you reach financial freedom!
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