Should You Hurry to Buy Life Insurance?
Hough: Policy prices are rising. Here’s what you need to know.
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Avoid it <<insurance>>, unless both of the following statements apply:
1. Your death would put someone you care about in a financial bind.
2. You’re not rich enough to set money aside for that person now.
Note that caring about someone isn’t enough of a reason, because insurance is a money-losing proposition, making it a poor gift versus simply saving. The purpose of insurance is to turn the unknowable (the probability of financial disaster brought on by your death) into the known (the cost of premiums today). Buy only enough so that your loved ones don’t suffer financially, not enough to make them feel like they’ve hit the lottery. They’ll feel like lottery winners anyhow after seeing your savings and brokerage accounts stuffed with all the money you saved on insurance. Buy only cheap term insurance, not expensive whole life or anything else that builds investment value, because you can build investment value in your brokerage account with more control and lower fees.
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I remember the old life insurance salesman’s canard: “A man who dies, leaving his family with no life insurance, doesn’t die; he absconds!”
I think this author nails it.
Worth a quick read.
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Reinke Faces Life 