re: What do I do with my money next?

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Would you advise a $50,000 or $100,000 whole life or a $2,000,000 20-year term?

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It all depends on what you are purchasing the policy for. If it is only for the death benefit, then probably the term. If you need a place to put some cash to earn a decent return and not be exposed to the market, then I would look at some whole life options.

For the record, I am not a financial advisor or an insurance salesman for whatever that is worth.

First thing is to get "own occupation" disability insurance. Your biggest asset is your earning potential. Next thing I'd do is switch to level term life insurance.

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And do get the emergency fund and a house!

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Buy a REASONABLE house and work on getting it paid off. There is nothing like having your home free and clear. B/C we did this 15 years ago, now, as we approach retirement, we can pretty much do whatever we want.

Get rid of that student loan debt. Debt free is the way to be. Pay off ALL debt.

I agree that a permanent insurance product serves your agent better than it serves you. You DO need insurance, but an appropriate size 20 year term policy, will protect your family until that time when you are self insured and no longer need insurance (substantial assets, no mortgage, kids grown and out of school, etc).
One exception to the insurance issue might be a maximum funded policy. Basically, it is for high income earners who have already exhausted their other tax deferred options. It allows you to create a policy with a set premium, but you can overfund that policy up to a certain amount and the cash value is invested in mutual funds and maintains it's tax deferral. Once you transition from the accumulation stage of your life to the distribution stage, you can withdraw the equivalent of your cash value without owing taxes on the withdrawals. In the meantime, the policy does have a death benefit if you pass away prematurely. You don't purchase this for the death benefit (again, that is where you buy term insurance), but the death benefit is what makes this strategy another tax deferred option. It is fairly complicated, but it works well if used appropriately and you have an advisor who is familiar with the concept.
I also totally disagree with those that say to open a Scottrade, Fidelity, etc account and buy mutual funds. You are going to be busy with life and a career, you want to hire a pro to run your money. If you want to open an account for some of your "play" money, that's perfectly acceptable.

If you died tomorrow, which policy would do your family the most good?

I've been told that for physicians the whole life may be a decent investment due to asset protection. For most it is not, but every financial advisor I have talked to has recommended at least some of my money go into one. I have a $500k policy for me and the wife. It has actually performed quite well, but we do max out our contributions to it. Basically it's a way of "hiding" our free cash, but we could borrow against it if needed without penalty and just pay back interest to ourselves. The rest of my insurance is term. I did the whole life for asset protection purposes mainly.

You should spend some time on this guy's blog, he is an emergency room physician and good investor. Well, other than him not listening to me about equity REIT risk going into 2008. Physicians, especially specialists and up the chain, are different than most retail investors due to much higher incomes, it's good you are thinking ahead.

white coat investor