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Guides and Financial Necessities 6

This page begins with a resource for life insurance. Life insurance is considered a financial necessity by many, and until I bought a home with my partner, I didn’t necessarily realize that life insurance really was necessary so that each partner in the home buying was protected in the event that one passed away.

It didn’t occur to me that if one of us were to (God forbid) pass away, the other would be left with a mortgage that could not be paid on one salary alone, and either the home would be foreclosed on, or one of us would be forced to sell the home. Not only that, add kids to the equation, and you’ve got a potential financial disaster on your hands.

The quandry I was in was whether to purchase the much more expensive whole life insurance or the less expensive term life insurance. Whole life insurance offers a payout at the end of the policy, but term just insures you for less money, not offering any type of payout at the end of the policy term.

Some say that the amount of interest earned on your premium for whole life does not justify the amount of premium paid into the policy, but the way I was looking at it was an apples to apples comparison where I’d at least get my money back, whereas with term I would not.

There are arguments for both, which is more financially responsible and which isn’t, but I figured if you can afford it, a good whole life policy may be the way to go if you don’t have time to figure out how to invest the money you saved by going with term life insurance.