[quote=ucodegen][quote=flu]
You can always cancel the term life insurance if you no longer need it.
[/quote]
This is what the insurance companies rely on. Sum up the payments with an estimated alternate return and it is no where near what the coverage is(except when the coverage goes over the age boundary of about 73.).

Insurance should only handle liabilities that could not be covered on a death (mortgage would be a good one since the wife would now have to handle raising kids on one income instead of a shared income), but it does not substitute for an IRA, savings or anything like that. Remember, it only pays out on your death.. and in the mean time, you are paying until you get tired of it.[/quote]

The 20 year term life insurance I bought when I was in my early 30ies was a $500k policy for $700/year roughly (it was probably higher than I could have paid, but at the time I wasn’t exactly the fittest person…that’s even before I was diagnosed 2 years later with really screwed up health issues that today would make me uninsurable.

In the grand scheme of things, over the course of 20 years,
I’ll be paying $14,000 for peace of mind, in case something does happen. For most people, you’ll make it past the 20 years term and the insurance policy will expire without a payout. For some of you less fortunate people (inclusive), you might have a brush with death. So yes, in most cases, the insurance company will win and collect your premium without haven’t to pay you out. In any case, I think this is one of the things you don’t want to win and maximize your positive returns on 🙂

If your mortgage is paid off, if your retirement funds/savings/investment funds/ real estate investments/etc are all doing well, you might not need life insurance. For me, it’s the question of whether I want to save the remainder $7000ish in premiums and drop my $500k insurance that hopefully won’t be needed.