Do you think it's worth buying term or whole life insurance, or do I not need life insurance at this time at all? So, there are two questions here, Brian. When does it make sense to buy insurance? Do I need life insurance? Who needs life insurance? And then the second question is, "Okay, I need to buy it. What kind do I buy? Do I go get term, or, again, I find all this fantastic information on Instagram, TikTok, Snapchat, all of those. I should probably get some whole life because I hear that's the way to really build wealth."
Yeah, I mean this is a very individualized question. But I can tell you, for most people, I'm going to talk in most people terms. Kyle, your situation might be a little different. We'll give you some indicators of that. But for a lot of people, you're just trying to ensure a need that you have. You know, if you passed away tomorrow, is there somebody that would be left in a really bad situation? So, if you have a spouse, if you have children, that could be pretty catastrophic because even if you have a great career trajectory and a lot of opportunity in the future, that's even worse because you're in a situation where you leaving the planet early is really catastrophic.
So, if that's the case, when you're saving diligently in the background, that concern or that risk is going to go away in 20-25 years as you're building your path to financial independence. That's perfect for term insurance, and that's what the majority of people... you think about every one of my personal situations every time I had... My daughter was born, one of my daughters was born, I bought more life insurance. And then as I had different life events happen, I added another. I essentially created my own laddered interim life insurance situation so that it timed out when, as kids left the house, you know, fully educated, hopefully, that no longer needed it as my financial independence for my wife from needing money for the household would be taken care of. It's going to fall off at its appropriate time. That is an indicator of term insurance.
But don't get sold something. I want you to actually go through the process of doing the due diligence on what are the needs, what is your personal situation, and then making sure that intersects with everything that you're trying to implement because if you do everything based upon what's being sold to you, the fear, that's probably not going to work out well. I think a lot of financial mutants, we think through, you know, if you think about financial planning as a pyramid, the very bottom of the pyramid is risk management. It's what we're all taught at the beginning. So some of us feel guilt if we don't go get insurance. "Hey, I'm 30 years old. I'm not fresh out of college. Maybe I need to do this." I think it's okay to not buy insurance until you need it because, realistically, yeah, it gets more expensive every year, but it's marginal. I mean, insurance is still pretty stinking cheap all the way up into your 40s. Like, life insurance is not an incredibly expensive thing to get for folks that are still young. And, Brian, I'm going to say still young is 50 and below. I don't know what... I mean, certainly 40 and below, I would actually say it's 60 and below.
That's exactly right. I don't mind sharing the very first... When I started my career, didn't have life insurance. When I got married, did not have life insurance. I was working, she was working. If I got hit by a bus, she's going to be okay. She's going to marry again really, really quick. When I convinced her, "Hey, you ought to move to another state where nobody knows you, so that we can do this crazy thing and see if this thing works." And she did it. And then we bought a house, we had a mortgage. I said, "Okay, now maybe I need to buy some insurance."
It's okay to wait until it makes sense for you to do that. Same thing as you get older, as you get into financial independence, as you start having buckets of money sitting around that you're able to live off of, you might one day arrive at the conclusion, "I don't need insurance anymore. I have insurance, but I don't really need it anymore. I'm at the point where, if I were to pass away, my spouse is taken care of, my kids are taken care of, all the debts are taken care of." If you're at that place, it's still okay to not have life insurance. Our view is term insurance for life insurance, in general, should only likely be for a term, and you get to determine when that term starts and when that term stops. And if you're outside of those terms, I think it's okay. I don't think it's something everyone absolutely has to have. For more information, check out our free resources