Quora Answer: Should I Purchase Whole Life Insurance?

The following is my answer to a Quora question: “Should I purchase whole life insurance?  I am currently 28 years old, work on ships for a living, married with no children, and make $100k+/year.  Through my company, I max out a 401k which gets matched usually, though with the downturn in oil, the match is being withheld.  I max out an IRA, and keep a year of living expenses on hand.” 

Because you are young, with excess funds, and have no children, whole life insurance will be relatively cheap, and an excellent foundation for your policy portfolio.  There may, however, be some loading because of the nature of your job, but this applies to a term plan as well, with very little upside. 

Because you have excess funds, you could consider a limited pay, participating plan, and overfund the premiums so you pay it off early.  This turns your life insurance policy into a financial instrument, which could borrow against in future, if such a dire need ever arose.  The value of the policy will grow in time, which will leave a substantial estate in the event of death. 

You should also consider getting the rider for disability and critical illness coverage.  At your age band, it is relatively cheap.  Disability is a real concern for people working on vessels at sea.  Critical illness is one of the major reasons for personal bankruptcy.  The mortality costs, the increase in premiums, is worth it.  Dying is an event, and then there is probate.  But disability and illness affects more than one person in the family, and more than one income stream is affected.