Life Insurance vs Savings

It's a fair question: "Why pay for life insurance when I could just save the money?" The math isn't kind to that idea, especially when you're young.

If a 35-year-old saves $40 a month for ten years, they'll have around $5,000. A $500,000 term life policy at the same monthly cost would protect their family from day one — and pays out in full whether they pass in year one or year nineteen.

Insurance and savings serve different purposes. Savings build wealth slowly. Insurance transfers risk immediately. Most families need both.

Where it gets nuanced is later in life. If your kids are grown, your mortgage is paid, and you have substantial assets, you may have "self-insured" yourself out of needing coverage. That's a milestone worth celebrating.

The right answer depends on your stage of life. A quick review can tell you whether your current mix is working — and where the gaps are.