The Wall Street Journal had an article 10/3/10 on “Shift to Wealthier Clientele Puts Life Insurers In a Bind“. Since 1985 policies for families with children is down 45%, while million dollar policies account for well over 50% of the new policies sold.
It’s unfortunate parents don’t pick up at least a term policy to protect their kids. Term is inexpensive. A $250k 20 year term policy, preferred non smoker male, is $17.52 a month with Genworth Life and Annuity, 30 year is $25.98. I guess the counter argument is that it’s fairly unlikely for one to pass away in their 30’s, 40’s or 50’s. Granted it’s uncommon, but in The Boston Globe online today, on the main page, was an obituary for a woman 52. Your 50’s could be when the kids are still under your roof or in college.
The tax advantages of permanent life insurance are there for the wealthy. I ran some numbers on permanent, G-UL, today for age 65. A $1m policy for a female non smoker age 65, runs from about $15k to $19k a year, regular rates depending on your health, with Lincoln National. The math looks favorable to me.