Life or Term – that is my question

Approximately many years ago, while living in New York, I was approached by my sister’s friend. He asked whether I would be interested in obtaining life insurance from him. The company, New York Life.

I was just starting out, I had no financial obligations except rent and car payments. I had very few credit card balances and thought, I should really get life insurance just in case something happens. He offered me ‘life’ instead of ‘term’ since he said, obtaining a life insurance with a cash value would be ideal for someone young like me. I could get the insurance payable in ten years. The money will grow with dividends blah blah blah blah blah. I signed up.

After 15 years, I had accumulated approximately 17K in cash value. I could have continued but I thought that it was time to cash out. I took out the cash value and paid off a fraction of my mortgage. The thing is, I am back to zero without any life insurance at all except for the coverage offered at work. But, who cares? What am I going to do with the money after I die?

In life, we go through many stages and milestones. I was very young when I was offered the life insurance with cash value. At my age now, it wouldn’t be wise to obtain a life insurance but a term insurance. Cash value may accumulate for me but it would be wiser to invest the money somewhere else. At this stage, I have to pay house insurance , car insurance, credit insurance and so forth. The rate for ‘life’ insurance at my age would be ridiculously high, and since I am a smoker – it would be even higher.

My advice – if you’re young and able to pay for insurance at $76.80 per month with a cash value – go for it. If you are at a later time in life, term insurance is best because it is cheaper and even with no cash value, you are still protecting your family for the unexpected.

Life has many choices. Always try to pick the right one.

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