Investing With Insurance

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Although some people (especially some insurance agents) will disagree, we Fools generally don't like to think of insurance as an investment -- and perhaps you shouldn't, either.

It's true that some "investments" in insurance will appreciate in value, but the main point of insurance is to protect you against the financial consequences of losses, not to increase your wealth. If you're looking for long-term investments, there are many options more attractive than insurance, especially stocks. If you're looking for protection against floods, car accidents, appendicitis, or death, you need insurance. (If you're looking for company on cold winter nights, you may need a cat.)

It might be tempting to consider insurance policies that have investment components, but think twice. These kinds of policies, such as whole life insurance, tend to be more expensive than their alternatives (such as term life insurance). You can often afford to protect yourself against greater losses by opting for the investment-less kinds of insurance.

Of course, your mileage may vary. Learn more about insurance in our Insurance Center and make your own decisions. You may not have thought about some kinds of insurance, such as disability or long-term care insurance, but they're vital for many of us. Few people expect to ever become disabled, for example, but it happens, and usually not to those who expect it. Take a little time to learn more; you may be very happy you did if some calamity occurs in the future.

To learn more about investing Foolishly, visit our Fool School. Or check out some of our inexpensive and well-regarded How-to Guides (which feature money-back guarantees).