What to watch out for when buying financial products

I had a fight (or a healthy debate) with an insurance agent on Instagram this weekend. She was trying to tell me that everyone should have a whole life insurance policy. I was horrified, and I wasn’t the only one.

There are people that need life insurance policies. People that have debts and dependants. But you likely don’t have debts and dependants your whole life…so I can’t think of a time when a whole life insurance policy is necessary.


A whole life insurance policy is basically when you pay for your WHOLE life to have a policy pay out when you die. It is guaranteed. But why? Why do ALL people need that? Oh and the price tag on these policies…don’t get me started.


The point of this blog wasn’t to discuss life insurance, I'll save that for another post. The point was to do your research before you buy financial products, and not to rely on one person’s advice and perspective when making long term decisions.


Most people’s first “source of truth” is the bank or an advisor, so they do everything their banker tells them to, such as:


Get a fixed mortgage, it’s safer than variable.

Buy our mutual funds, the stock market is risky.

Buy our life insurance and mortgage insurance and every other type of insurance we have, to keep you protected.


I’ve HEARD IT ALL!


Here's what I know. Banks and insurance companies are big and make lots of money! That’s why they are typically great investments to own. They keep creating products so they can MAKE MONEY. They make money when people buy these products. Don’t worry, you might make a little too, but they are in the business of padding their bottom line FIRST not yours!


Their target market is people that are ignorant to the financial landscape. They sell mediocre products, people feel secure in their financial future, and life goes on.


I know why this happens. Fear. You weren’t taught how to manage this stuff. You want to do the right thing, and your bank seems like the obvious “good” choice, and it is for some things.


Here’s the gravy in this little rant…recognize bias. When someone from an insurance company is trying to sell you a policy, they make money when you buy it. So of course they are going to try to convince you that it’s the best thing for you.


So, consult others that don’t stand to benefit from buying this product, whether they think it’s a good idea. Ask a competitor. Read blogs. Follow personal finance influencers on your social media channels, and read up. Ask questions of many people. Get a coach that doesn't sell products. Surround yourself with a community of like-minded people that you can share ideas with. Hire a fee-only financial planner for a third party review. Research on Google – there are a million blogs out there about every financial topic under the sun. Read several articles so you can get multiple perspectives.


The point is just question things. Have healthy skepticism before making long term decisions.

Be curious. Know that you are capable and deserving of FIERCE finances, and get after it!


Much love, gratitude and money.

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