David Merkel probably spend a large part of his career in the insurance business and later now as a value investor. Assessing the risks of insurance companies tend to be difficult for the layman, and this is where his edge lies.
So I think I have 2 previous commentaries on actuaries and insurance:
- Opinions from a trained actuary: Stick to simple insurance
- Actuaries don’t buy whole life insurance and ILPs
In this post, a reader asks him:
“If you had to buy life insurance at current age, which policy would you buy? and which company will be your choice?”
And he lists out his reasons, but mainly explaining that insurance is very situational based and you should keep costs as low as possible.
If you are young, the first reason predominates. In order to do that, long-dated term insurance will do the trick. Insure yourself for 20-30 years, and over that time, build your assets so that at the end of the life insurance policy, your heirs will not need the insurance. And neither will you, should you survive. That is what has happened to me. I have no life insurance — instead, I have assets. Should I die, my family will survive without my wife having to go to work, intelligent lady that she is.
(She doesn’t have a financial bone in her body, she is a princess, as her father was well-off. She has lived with me long enough to absorb my prejudices, and grasp that there are no easy pickings in markets, so avoid those with get rich quick ideas.)
Something some agents will draw your attention to is that you should worry like the rich, and buy insurance policies so that your money to your heir exist outside your estate.
He also answers that in his post. Worth a read.