I went with term life insurance because it’s all that I could afford.  Considering I had goals of paying my mortgage off early, contributing to my 401k, funding my kids 529 plans and investing in my Roth IRA and regular brokerage accounts, I just didn’t have any money left for a whole life insurance policy.

In fact, even with extra money now available, I still only have a term life insurance plan.  You see, I still cannot afford to have a whole life insurance plan or other versions of insurance plans other than term, because of the cheaper cost and benefits that a Term Life Insurance plan provides.  For me, a term life insurance plan offers the most bang for my buck, shop around for term life insurance quotes instead of jump on the first insurance company you think of!  Of course, I’m investing a large degree of my extra income into investments so that makes it worth it.

I just check 20 year term life insurance rates for a 35 year old that wants to receive $500,000 and the rates are around $65 a month.  While more expensive today than when I got my insurance, it’s still relatively cheap.

Other forms of life insurance (whole, universal and variable) include an investment part of the life insurance, but the fees associated with those plans don’t make it worth it unless you are one of the top earners.  Since I’m less than the top 10% of income earners, term life insurance is the best deal for me.

To be honest, I actually like that fact that my term life insurance is just plain insurance and not an investment vehicle.  I would much rather control my destiny via mutual funds, ETFs or individual stocks than trust my money with some company that sells insurance.

What do you think of the various types of life insurance?

MR