I'm 25, not married, currently make $50k a year. Last year I decided I had no idea how to start being financially responsible, so I started talking with my father's financial advisor. He helped me navigate creating an actual budget, set up retirement account contributions, and be on what I still believe to be a decent path towards being financially responsible for my current and future circumstances.
I did however get talked into a $75k whole life insurance policy at $48.15/month. I've only been paying into it for 8 months, so if this is a $385 life lesson then so be it. I've read a multitude of threads on /r/pf that explain why these policies are bad, why term policies make more sense if you actually need life insurance, etc. But there are a few things I still feel hazy about.
Obviously insurance premiums rise as you get older. Does it not make sense to lock in a lower rate whole life policy when you are young? The normal argument I see is that by the time the rates increase too dramatically your kids should be grown and on their own, so you really just need to think of your spouse at that point. But does it not make sense to lock in a policy with a small amount of coverage (<$100k) and supplement the rest of the insurance you need throughout your life with term policies? That way, once the term policy ends after age 60 you would still have some coverage without having to foot a much larger premium. This was my thought process when I signed the paperwork, but you guys seem to have a true hatred for whole life ins. Can you explain why this isn't the way to go?
Submitted August 24, 2018 at 01:54PM by DerivativeDude https://ift.tt/2wcG6st
