Term vs Whole Life Insurance or Saint-Tropez?

I get asked a lot about what’s better, term insurance or whole life insurance? As a former Certified Financial Planner, my response is this: What’s better, La Jolla or Saint-Tropez? In other words, It really depends on where you are coming from. There are plenty of people that say “only buy term” – Suze Orman comes to mind. There are many situations where I absolutely agree with her. The problem is, everybody’s situation is different and situations change over time. So what you might think is best for you now may come back to haunt you in the future.

With that said and done, there are definitely situations where the choice for term life insurance are an absolute no brainer. If you are struggling to afford a specific face amount for a definite period of time, term life insurance is your best option – hands down.

Let’s take the example of a married couple who started a college savings account for Brittany, their beautiful 5 year old daughter. They wanted to protect Brittany’s educational fund with life insurance in case dad died unexpectedly. They explored various life insurance companies, and since they were anticipating college for Brittany in about 13 years, they decided on a 15 year term life insurance policy. Seems like a sound plan to me.

That was then, this is now… Let’s explore what really happened. In reality, dad did die. He passed of a heart attack at 58 years old during Brittany’s senior year in college. Shortly after he died, mom was diagnosed with terminal cancer. Mom was a complete wreck both emotionally and financially. Brittany was faced with a life changing quandary; should she start her career or put it on hold, move home, and help mom cope with her last years of life in peace?

Remember that “term life insurance policy” that dad bought to protect Brittany’s college fund? Well, turns out at the last minute that dad chose one of the life insurance companies that recommended a permanent life insurance policy. It was more expensive at the time, but he managed to afford it. Call it intuition for tuition or whatever you want – the fact is – he didn’t buy term life insurance. That was then, and this is now…

The silver lining is, that without the proceeds from dad’s permanent life insurance policy, Brittany would never have been able to put her career on hold and spend the last precious few years with her mother during her battle with terminal cancer. Ironically enough, one of her mothers’ dying requests? Visit the French Rivera before she passed. With part of the proceeds from the permanent life insurance policy, Brittany was able to fulfill her mother’s request, with style, on the French Rivera. Her mother passed peacefully shortly thereafter…

So in response to my question what’s better, La Jolla or Saint-Tropez? Even though I did my undergraduate degree in La Jolla at UCSD, I’d have to say Saint-Tropez. I love the allure of the French Rivera and although I’ve only been there once, Saint-Tropez is a magnificent place! Just ask Brittany. Enjoy life!

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