“Insurance is the only product that both the seller and buyer hope is never actually used.”
Chances are pretty good that as long as you’re buying life insurance for insurance’s sake – meaning income replacement – and not as an investment or for some other reason, you’re not going to receive the benefit.
OK. Well, you wouldn’t receive the benefit in any case. Someone else will. You’d be dead.
As we saw in “Do I Really Need Life Insurance?”, according to the Social Security Administration, people between 25-45 are pretty unlikely to pass away in the following 21 years.
Yet, financial planners advise people who do not yet have sufficient wealth to survive the death of a family member to get insurance.
Pay for life insurance when you’re probably not going to die?
In order to understand that line of reasoning, let’s look into the realm of investing. With a quick little lesson there, we can draw a parallel and help you to understand why you want to have appropriate insurance coverage.