My Choice of a Life Insurance Policy

I recently read a two part article on milliondollarjourney.com in reference to life insurance policy. I thought I would add to it by sharing my own experience in regards to life insurance policy. Estate planning and insurance are parts of financial planning that we often forget if we are not dealing with a financial planner. Nobody wants to discuss about death, especially when we are talking about their own death! Unfortunately, this will be the last chapter of the book of our lives. Trust me, you are better off if you leave money for your family behind you than financial problems!

I first realized that when I got married three years ago. As my wife and I were now making one, I thought that I could not let her down if I pass away. We then decided to subscribe to our first life insurance policy. We were living in an apartment, no debts beside a car lease and no children. We didn’t need much to cover for each other’s death. We took 100K each universal life (UL) insurance policy. I found the premium expensive but the UL would last forever and we would always get 100K each when we pass away.

It was surely not the best choice by far. When you seriously think about it, 100K in 50 years (I’ll be 75) will not mean much! With inflation rate, the price of a 2067 Mustang Shelby 10.0 Limited Edition will probably be more than that! Not only that, but are we really going to need 100K at that time? When we signed for the policy, my wife was 23 and I was 22. We are already planning our retirement at that age. I do not think that a 100K will be significant in 30-40 years from now.