Fiology Lesson 32: Whole, Term, or No Life Insurance?


Fiology thanks the FI community’s Life Insurance expert Michael Dinich of Your Money Geek for shaping this lesson.

Life Insurance may seem an unlikely ally in the pursuit of Financial Independence, however adequate insurance plays a vital role in planning. In years past, workers relied on their employer for a pension as well as life and health insurance benefits.

Today, workers are increasingly unlikely to be eligible for a pension and those seeking Financial Independence likely will not have accumulated enough time with their employer to carry many traditional benefits into their post-W-2 years. Adequate life insurance protects families seeking financial independence until they have sufficient assets saved to to self-insure against premature death.

Life insurance is, at the end of the day, a precaution – a rainy day preparedness item. Every precaution can be thought of a “waste” of money. That is, of course until it is needed. The mistake commonly made is viewing insurance solely through an economic lense.

Life Insurance serves more than an economic role. Having it can provide peace of mind. In pursuing financial independence, the goal should be to optimize dollars that are spent and those that are saved. Being smart about the purchase of life insurance can save hundreds and possibly thousands of dollars a year.

Read:  All About Life Insurance: The Basics and Beyond, and Myths Debunked  by Michael Dinich of michaeldinich.net

Read:  A Reader Case Study: Whole Life Insurance  by Big Ern of earlyretirementnow.com

Listen:  Another Visit to Whole Life Insurance Land – Podcast #51  by The White Coat Investor of whitecoatinvestor.com

Read:  Whole Life Insurance – The Essential Guide How To Avoid The Salesman’s Hype And Focus On What’s Best For You  by Todd Tresidder of financialmentor.com

Take Action: Using the  Life Insurance Needs Calculator  at lifehappens.org, determine, based on your specific circumstances, the type and amount of life insurance you believe will support your FI goals. If you determine that life insurance should be a part of your plan, account for this expense in your FI calculations.

Additional Resources:

Read:  What You Need To Know About Whole Life Insurance  by Jim Dahle of www.whitecoatinvestor.com

Read:  Whole Life and the Rules of Seduction  by Doc G of diversefi.com

Quote:  “Life insurance is like walking around with coal in your pockets, and when you need it most, finding out it’s diamonds.” – Michael R. Dinich

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