life insurance



You may get these calls frequently—a representative warns you of the critical need for life insurance in your wealth management strategy. After all, you won’t always have your work policy, so purchasing additional coverage is wise in the event of your retirement or eventual death.

In a recent article on, Darwin M. Bayston asks “Does life insurance need to be held until the death of the insured?” His answer was a resounding “no.” Even more interesting—as a respected expert in the life settlement industry, Bayston discovered that most financial advisors are not only unfamiliar with or misinformed regarding life settlement transactions, many of them have little or no experience with them.

To understand why, it’s important to look at all of the reasons people take out policies to begin with, i.e., to help fund educational expenses of a child if a parent dies, to provide an inheritance for a surviving spouse and children, to generate tax-free income as part of an estate planning strategy, or to pay for funeral expenses or other outstanding debts. Interestingly enough, nearly 88 percent of universal life insurance policies and almost 85 percent of term life policies never even result in a death claim. That’s because many of the seniors who took out the coverage initially are in a much different place than when they purchased their policies. Their children are grown and gone, they are now living on a fixed income and the thought of paying an insurance premium is less attractive, so they opt out.

There are also other options for retirees once they hit 65 if they want to get some value out of their policies. While life insurance is an attractive option, you may decide your company insurance or a term life policy makes more sense for your overall wealth management strategy. If you’re not sure how much insurance is enough, you can always contact us at or call us at 1.847.382.2600 for insight into the role of insurance in your portfolio.

The information provided is for general information only and is not intended to provide specific advice or recommendations for any individual.

Bayston, Darwin M. Does Life Insurance Need to be Held Until Death of Insured? Wealth 15, Aug. 2016.