Cheeseburger in Life Insurance Paradise

Bill McClellan of the St. Louis Post-Dispatch writes about a friend:

“I am not going to live to be 100,” said my friend. “Actually, I’ll probably be lucky to make it to 70. My biggest fear is dying at 71.” So he is quietly making a push to make sure that doesn’t happen. Ever since his heart attack, he has tried to follow a low-fat diet. No longer. His new plan calls for cheeseburgers and fries for lunch, and ice cream sandwiches for dessert.

What does this have to do with term insurance? Bill has a term life policy that expires when he hits seventy. If Bill’s friend were to die before the policy terms out, his family would collect approximately $275,000. If he were to die after he turns 70, his family would get nothing. So the friend is turning to fatty foods and indulgence in a concerted effort to end it all before his policy expires. The not-so-fatal flaw in his strategy, is that he might make himself ill, but it’s no guarantee that he won’t still beat the actuarial odds and outlive the coverage. While it might be cynical to recommend that the guy simply swim deep into a lake beyond the point of no strength to return, it kind of misses one key point: DYING IS A BAD THING. First of all, term life policies are written in order NOT to be collected on.

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