Just A Thought On Whole Life Insurance

The risk of death at two or three years old is incredibly low in our society. So why not buy a “whole life” insurance policy on your toddler now, when the premium will be ridiculously low, so that the toddler rate is locked in for the rest of your child’s life (at least until he or she hits 100 years of age)? Well hell, there really isn’t any reason at all, except for what we might call “ethical” considerations.

Two things come to mind, and I’ll be brief. First of all, your kid might get into some trouble borrowing out of the whole life plan during young adulthood. The sound financial assurance you hoped to bestow upon your child could instead become a horrible, dragging burden. Second, and more importantly, it’s much better parenting to teach your child to save money for himself or herself, and to favor financial independence over reliance on insurance companies. Or so I was told by someone who works for a company that doesn’t sell whole life insurance plans, and inculcates its new recruits to believe that they’re the product of the Devil.

At any rate, like any financial instrument, there are situations in which whole life insurance plans can make more sense, situations in which term life insurance plans make more sense, and situations in which no life insurance makes sense. It really depends on the situation, and what I can’t stand is some knucklehead telling me that a certain instrument is just impossibly flawed, when really it’s just outside of his area of expertise. Salesmen. Yeech. I advise everyone who has interests in finance (which is everyone) to level a skeptical eye on anyone who insists that one product is Crap while another product is It. Every instrument has an appropriate target market.

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