When Does It Make Sense to Buy Life Insurance?

As you get older and buy a house and/or have children, should you be thinking about buying life insurance? If so, which kind should you buy?
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[@frederickvalencia4976]

I am 37. I got my life insurance at 34. Married at 29, kid at 30. I wanted to have it at 30 when my daughter was born but I could not afford the extra bill. At 34 I was able to afford it. Also knowing that I am young it was cheaper for more. It's very simple if people depend on your money and you don't own anything of significance value then it's worth it.

[@jmjsr]

I remember my high school teacher (who I think had low opinion of insurance agents) said " they are betting you're going to live and you're betting that you're going to die " . It just made me think.

[@MarcoEmeryLinden]

Whole life insurance is generally a poor investment, however, there are specific cases where it can be a godsend. For example, here in Canada, estate taxes begin at the first dollar you inherit (unlike in the United States, where you can inherit the first few million tax free). If you're inheriting an illiquid asset -- say, real estate, or a business -- you can potentially get slapped with a 7-figure tax bill. Whole life insurance guarantees your heirs will have instant access to liquid cash to pay this tax bill. That is its greatest advantage, at least here in Canada -- estate planning. In terms of an investment to make your money grow -- you're better off just buying regular, taxable index funds. The high cost of premiums for whole life are not worth the tax benefits in that case.

[@Bob-yh7ir]

We are selling our life insurance. No longer need it. If either of us dies, nothing changes for the other person. No debt, everything paid for and plenty of cash and investments to see the other through even hard times. It served it's purpose while we were raising our daughter and were younger.