No. of Recommendations: 2
Assuming that you don't have a massive fortune or a special situation like a disabled kid here are a few more comments.

Insurance policies are not indexed for inflation. In 25 years after paying taxes on a $100K death benefit, you heirs may not even be able to buy a nice car. (Who know what the laws and tax rates will be in 25 years?) Is what you are paying for the insurance now worth giving your kids a car in 25 years?

Your situation may change so much that what makes sense today isn't what you want in the future. Say at age 70 you are in good health but your money is a bit tight and you have already withdrawn all of the cash from the policy, will you still be able make the payments?

There are only two situations where a life insurance policy will be the difference between a significant inheritance and no inheritance. That is when you and your spouse die before you save saved up a significant retirement fund or when you have outlived your money. In any other situation the insurance death benefit will only be an extra amount that your heirs get in addition to a significant amount of unused retirement funds. Having term life insurance until you reach retirement age will cover the first situation less expensively and long-term care insurance will help you not outlive your money. If you do outlive your money how will the annual insurance premium be made?

By the time you die it is likely that your heirs will already be well on their way to being financially secure so any money from your estate may not change their lifestyle. If your heirs are your kids that you had when you were in your 20's then if you or your spouse lives to be in your 80's then your kids will get your estate when they are around 60. By then they should have saved up for their own retirement. While any money they receive from your estate may make things easier, it is likely that it won't change their lives. There is also a risk that they might depend on getting your estate for their retirement and that often does not work out so it is possible that they might end up being worse off because you left them some money.

Greg
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