I talk to clients frequently that are pondering whether to buy life insurance of if they want to self insure. I have always believed in using the leverage of the the insurance policy and letting the insurance company pay the death benefit. If you self insure, you have to have dollar for dollar saved for you to leave the benefit to your beneficiaries.
We don’t work our whole lives to get into retirement to hord the money and not feel like we can spend it. If you are self insuring, you are more apt to feel like you need to conserve the assets you have accumulated. In other words, you worked your whole life to have an enjoyable retirement and now you are cutting back. If you have life insurance in place it can serve as a permission slip to spend some of your assets. For example, if you have a 1 million dollar permanent life insurance policy, you will have a death benefit replace 1 million dollars of assets you might spend in retirement. I am not saying to get crazy with your assets in retirement and spend all of them, but the insurance certainly provides for a nice cushion. The leverage you get from the insurance is not dollar for dollar like a hard asset that you accumulate.