A second opinion.

I WOULD LIKE TO RESPOND TO A LETTER PUBLISHED IN THE MAY 2005 ISSUE titled "Insured for Life?" The writer gives some very questionable advice.

The primary purpose of life insurance is to help people in their estate-building years protect the people who depend on them from the financial problems associated with premature death. Note the word premature. Any calculation of the income needs of a young family with children--when replacement income, education needs, house payoff, and other adjustment costs are included--invariably results in six figures or higher. Young breadwinners simply cannot afford adequate protection with whole life insurance and, typically, end up either grossly underprotected with a lapsed policy or both. Renewable term insurance is generally low-cost enough for them to afford the levels of protection they need during their estate-generating years.

The letter also stated that it is difficult to qualify for term insurance at 60 or 65. By that age, if people haven't already paid off their houses, put their children through college, and prepared for retirement, then life insurance isn't their problem and won't be their solution. The very raison d'etre of life insurance--downside protection against the financial problems associated with premature death--has been eliminated by age 60 or 65. If one needs life insurance at that age, it is usually for estate-planning purposes. Here is where whole life insurance, instead of term insurance, would be appropriate.

The only people pushing whole life insurance on the young are people selling financial products--because whole life products with annuities have some of the highest commission payouts. Life insurance is not supposed to be a savings or investment vehicle.

Jan R. Jasper, Ph.D., CFP, assistant professor

Prairie View A&M University

Prairie View, TX

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