109 votes
Accepted

Is life insurance a financially sound safety net?

as a safety net for emergencies, is purchasing life insurance a practical investment? Life insurance is not an investment. It is a necessary expense if anyone depends on your income. You should ...
  • 120k
107 votes

For very high-net worth individuals, does it make sense to not have insurance?

I think the key to this question is your last sentence, because it's applicable to everyone, high net-worth or not: How would one determine whether they are better off without insurance? In ...
77 votes
Accepted

Is it possible to get reverse life insurance?

Yes, that's called an annuity. You give them your money, and they pay you a lifelong monthly or annual payment. Of course, they want the money upfront, otherwise you could die and have nothing left.
  • 37.2k
73 votes
Accepted

For very high-net worth individuals, does it make sense to not have insurance?

Yes, and the math that tells you when is called the Kelly Criterion. The Kelly Criterion is on its face about how much you should bet on a positive-sum game. Imagine you have a game where you flip a ...
  • 3,024
69 votes
Accepted

Life insurance as a lottery ticket

Term life insurance is something that you purchase when the financial loss that would be incurred by your loved ones if you died would be catastrophic. In your example, 20 years ago when you were ...
63 votes

Life insurance that covers only simultaneous/dual deaths

https://www.investopedia.com/terms/s/secondtodieinsurance.asp What is Second-To-Die Insurance Second-to-die insurance is a type of life insurance on two people (usually married) that provides ...
  • 49.1k
61 votes

Why would a life-insurance company agree to a 20-year guaranteed life annuity which is expected to pay out more than the principal?

The real money maker for insurance companies comes from investing free cash. Most insurance companies have a diversified portfolio of fixed income and equities. Maybe someone can provide a more ...
  • 74.5k
51 votes

For very high-net worth individuals, does it make sense to not have insurance?

There are 2 maxims that help make sense of insurance: never insure anything you can afford to replace always insure anything you can't afford to lose Following those 2 rules, "normal" insurance ...
  • 2,982
48 votes
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Should I purchase a whole life insurance policy? (I am close to retirement)

First of all, congratulations on being in an incredible financial position. you have done well. So let's look at the investment side first. If you put 400,000 in a decent index fund at an average ...
  • 120k
45 votes

Do I need life insurance if I can cover my own funeral costs?

Life insurance should be used to replace your income for someone that depends on it. Since that is not the case, and you have enough in your estate to cover funeral costs, it sounds like you do not ...
  • 120k
43 votes

Do I need term life insurance at age 57?

The answer to your question will depend on your own preferences and circumstances, but I would argue that generally at your stage of life you do not need nor want term life insurance. Life insurance ...
  • 14.9k
39 votes

Is it possible to get reverse life insurance?

To expand on Aganju's answer, what you are describing is closer to a lifetime mortgage + annuity. With an annuity, you pay an upfront lump sum amount to purchase a guaranteed future income until your ...
38 votes
Accepted

What are the most common reasons for purchasing Life Insurance?

If you have dependents that rely on you financially, you buy life insurance so as to not disrupt their life if you were to die. You have a spouse who would have to pay the mortgage and probably ...
  • 48.7k
38 votes

Is life insurance a financially sound safety net?

Life insurance is the perfect emergency safety net if your family would need a safety net in the emergency of your death.
  • 48.7k
36 votes

Universal Life Insurance or Term Life Insurance?

The first question to ask yourself is do you even need life insurance? The benefit amount, 500K is fairly large, but it can also be too small for your needs. Do you have people that are dependent ...
  • 75.1k
31 votes

Why would a life-insurance company agree to a 20-year guaranteed life annuity which is expected to pay out more than the principal?

Why would a life insurance company agree to pay out a nominal amount that is higher than the principal given to them? As mentioned in other answers, the insurance company is assuming that they will ...
  • 831
30 votes
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Is it acceptable to not have term life insurance in my case?

While this is a totally personal decision, I still think it would be a good idea to have some life insurance simply because you have someone that is currently dependent on your income. Yes you have ...
  • 120k
27 votes

Life insurance that covers only simultaneous/dual deaths

The product is called "second to die," as mentioned in RonJohn’s answer, or "survivorship life," as you saw. I think you’ll find that the premiums for 2nd to die aren’t enough cheaper to make it the ...
  • 1,523
26 votes

Is life insurance a financially sound safety net?

There are two common types of life insurance, term and permanent/whole. Term life insurance policies have no payout if you don't die during the term of the coverage, they are just insurance. Permanent ...
  • 66.6k
24 votes

Is permanent life insurance necessary in retirement?

You are exactly right, life insurance is income insurance to replace your income for people who depend on it. If you are retired or have assets to take care of those that rely on you then you are ...
  • 1,105
24 votes

For very high-net worth individuals, does it make sense to not have insurance?

The point of insurance is to trade high variable costs for much lower fixed costs. The question isn't whether you can afford what would be a catastrophic event for anyone else, but whether it would be ...
24 votes

Universal Life Insurance or Term Life Insurance?

Pete has a good answer already, but I will add 2 separate thoughts for you to consider: First, go ahead and google "World Financial Group". Google will autocomplete this to "- scam?" This is the ...
23 votes

$1.44 million in holdings: Help my non-retired, 80-year-old dad invest it

This is not the answer you were hoping for. I recommend that you stay out of it and let your parents do what they want with their money. They are obviously very good savers and very thrifty with ...
22 votes
Accepted

Why would I/when should I stick with decreasing term life insurance?

Life insurance premiums do go up with age. A quick google found a claim that they go up 8-10% per year on average, but they go up slower when young (about 5% per year in your 30s) and faster when ...
  • 4,652
21 votes

What are the most common reasons for purchasing Life Insurance?

There is only ONE legitimate reason to purchase life insurance - to protect your family from the loss of your income should you die unexpectedly. No other considerations should factor in. The most ...
  • 1,184
21 votes

Why would a life-insurance company agree to a 20-year guaranteed life annuity which is expected to pay out more than the principal?

The insurance company is expecting to earn more money investing the initial buy in amount ($100k) than it pays out. You need to calculate what the equivalent rate of return is for that $100k. Unless ...
  • 1,181
20 votes
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How to be sure my advisor's insurance recommendations are good for me?

The thing that is a red flag for me is your statement of "investing in life insurance". No. You probably need to fire her. Investments are great, and life insurance is necessary. Mixing the two is ...
  • 75.1k
18 votes

Life insurance as a lottery ticket

The insurance is no longer needed to support either spouse or children in the event of a spouses's death. Life insurance is pretty much only for people who aren't in your situation. You know that ...
  • 66.6k
16 votes
Accepted

Does life insurance cover suicide?

In the United States, yes it will generally cover suicide. However there is usually a "suicide clause": Usually, this clause states that no death benefit will be paid if the insured commits ...
  • 10.2k
15 votes
Accepted

Is the beneficiary of life insurance responsible for the debt?

No you are not. Sorry about the goings on in your life that is certainly a lot of drama in addition to the loss of your mother. An advantage of having assets pass without going through probate is ...
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