Most of you know I’m always speaking out against the predatory life insurance salesmen pushing lies on social media bout how buying life insurance will help you build wealth, provide income in retirement, be an “infinite bank”, provide huge tax savings, can’t lose money, yada yada yada. That’s all nonsense and you should never buy insurance as an investment. It’s a horrible investment. There’s a much better way: Buying and holding index funds.

Ok, so why did I buy it? I bought a TERM policy (not permanent/whole/IUL/etc) as INSURANCE. I didn’t buy life insurance to try to do any of that nonsense above, instead, I bought a 20 year term policy so that if I die, my wife will get a million bucks. I never had life insurance my entire life because I didn’t need it. No one depended on me or my income to survive. But my life changed. I got married, and my wife is due to give birth in less than two months!

My wife’s pregnancy got her thinking. Something along the lines of “Damn, it would suck if Jeremy dies”. She would have two babies, a new house with a mortgage, bills to pay, need to pay for childcare, etc. My net worth ($5M+) should be plenty to cover all that, but there’s still something comforting about life insurance. If you die, it generally pays out quickly without hassle directly to the beneficiary. While we were in the process of getting married, setting up wills, trusts, beneficiaries, etc, the term policy was a quick and simple way to provide her the coverage she needs, and peace of mind going forward.

Note how cheap my policy is. Even as an old dude (44) buying a TWENTY YEAR term (until I’m 64) it’s only $77/month for a MILLION bucks in coverage. Those nonsense permanent life insurance policies the predatory salesmen push are usually $500+, sometimes much more. Don’t dump tons of money into a crappy permanent policy, but if you have someone who depends on your work (paid or unpaid) you should be buying a cheap term policy to cover that period of your life.

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.

-Jeremy