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Life Insurance

Life insurance has taken on increasing importance as an investment in the modern era for many reasons. One reason for this is that people are living longer, mainly from advances in technology and biomedicine. Another reason life insurance is more significant as an investment to many consumers is because of the precarious nature of Social Security funds in the future when increasing demands on the system are projected to drain the fund. However, life insurance, unlike other insurance, is self-maintained, i.e., no one makes you carry it as is the case with auto or homeowners insurance. Further, there are numerous types of life insurance investments, with multiple pages offering everything from “illustrated dividends” to “mortality savings” which makes the process of choosing the right insurance investment even more complex. Additionally, the longer one waits to purchase life insurance, the more costly is becomes. On top of this factor, life insurance expenditures must be tailored to individual budgets, which is where consumption economics plays a role. Yet, insurance purchasing as an investment can be fraught with risk because the average consumer must rely on information from insurance companies, information that may often turn out to be inaccurate or is not forthcoming, “Unlike most retail products, from macaroni to mutual funds, life insurance policies carry no unit pricing—no breakdown of what you are paying per quantity of what you are buying. This is an industry that does not disclose fundamental information that consumers should know” (Keating 1). This analysis will relate life insurance expenditures as they relate to consumption economics. It will also explore the permanent insurance policies, ones that build cash value over the life of the policy and pay dividends. A conclusion will address the future of purchasing life insurance as an investment.

When it comes to consumption economics, there are two...

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Life Insurance. (1969, December 31). In LotsofEssays.com. Retrieved 22:59, July 01, 2022, from https://www.lotsofessays.com/viewpaper/1685848.html