Insurance Backwards Calculations

If you looked at a typical life insurance sale, you might also conclude that it’s kind of backwards. Think about this: if you take 1000 people from birth to death, 75% are still alive at age 65. So, it would be safe to say that statistically speaking, 3 out of 4 people will die after age 65. Yet the typical financial advice from all of those Financial Guru’s who dislike permanent insurance essentially is to advise you to have a lot of insurance when you are less likely to die, (before age 65) and no insurance when you are more likely to die (after age 65).

In other words, they encourage you to buy lots of term insurance, pay for it up until the time you can no longer afford the premiums, and then die without insurance. Wouldn’t it make more sense if the objective was to die with the insurance? It’s the easiest thing to transfer to heirs, does not require probate and best of all, it’s tax free.

Do you think the insurance companies know this?

Of course they do! Why do you think the cost of insurance is so horrendous on an 80 year old? Statistically, they are going to die soon!

So, if I have this right, we own a ton of insurance when we are young and statistically not going to die and we drop or cannot afford insurance when we are older and statistically going to die!

Don’t misunderstand me, there are accidents and unforeseen events that must be taken into account when you are young and the need for lots of insurance is obvious.

What I am saying is that owning insurance until it is cost prohibitive and then dropping it, then dying may be the worst investment you can make.

Did you know that there is permanent insurance that can be used while you are living? It is the most amazing discovery we have made in the past 30 years in our study in the area of money management.