Bad Advice

First off, Brenner's off when it comes to replacing salary. How about replacing income? Surely there are other ways of bringing in money aside from punching a clock, all of which are insurable interests. Perhaps Brenner's word choice was an accidental one, but I doubt it. She's a financial reporter with many years of experience. She ought to know better before telling people about the inherent worthiness of a pretty important product such as life insurance.

Her second reason is a valid one, I suppose, but to be honest, I've known a lot of people who have bought life insurance and even some who unfortunately have had to collect on it. Not one has ever said that they bought the insurance to pay off estate taxes. Not one. A few said they did it (partially) to offset funeral expenses, but as a hedge against estate taxes? Nope. Now, I understand how life insurance can and is used that way, just as I can understand the increasing opportunity for insurance reps and financial planners to work together. But it strikes me as a little odd to put that reason out there before something more conventional, such as maintaining the family's lifestyle, paying off a home, providing for college, funding retirement and other reasons.

Her third reason comes off as the most defensible one, or at least the least incorrect of the three. Indeed you can use life insurance as a form of investment, especially if you look at it from an estate planning perspective. But Brenner does not focus on that, either. She simply looks at life insurance as a means of capital generation over time. Not as a tool of wealth preservation. To that end, and especially in the context of her article I referenced in the beginning of this post, I am beginning to think that Brenner just does not get life insurance. Either that, or the demographic for Newsday is so low-income that priorities such as wealth preservation don't come into the conversation all that often. (I don't know Newsday or its readers, so I might we way off the mark there.)

All told, I just got a bad feeling reading these articles. We are in an age where our lives are more insurable than ever before, and yet the public knows less about insuring them than ever, too. And while the industry is doing some really innovative things to educate today's and tomorrow's policyholders on what insurance is and why it is so important, I cannot help but feel a little depressed when a veteran financial columnist and business reporter such as Brenner so completely misses the mark on a family of financial products that has done so much for the American public.

One of the first things my boss told me about life insurance when I joined National Underwriter was how life insurance was a central part of preserving the middle class in the wake of the Great Depression. One would think that as we claw out of the Great Recession, the value of life insurance would be similarly appreciated. Apparently not. How sad. Good thing I don't read Newsday. Otherwise, I'd cancel my subscription.