I am a life insurance agent for New York Life and I am very surprised at how confused some of you are. The purpose of Life insurance is simply to cover someone's life.
Green Weaver, the reason there is life insurance for seniors is they too have debts, ex: funeral costs, home, cars, bills, etc. If the senior does not want to leave his or her family with all these debts, they purchase life insurance. Senior life insurance is very expensive because a senior is a higher risk. Children's life insurance is used for two very important reasons. One is to lock in the child's health. the other is to lock in the child's age. You see life insurance premium is based on those two factors, age and health. The older you are or unhealthy, the more expensive it is.
Moldova, you are correct. A whole life policy is a better place to put your money in rather than a CD, but in no means should a life policy be used as a primary means of investing. The reason why people invest in whole life policies is to supplement or as a back up plan to their stock market investments. The purpose of having both is in case there is a market crash, all the money is not lost because they also saved money in their whole life policies. Annuities are not only used for retirement. If you put a lump sum, you can start receiving payments whenever you want. You don't have to wait to retire.
Mutsy, term insurance is a great *temporary* alternative. People usually purchase term insurance when that is all they can afford to get. Most common are young families who have not started their careers yet. The reason why term is a temporary fix is because it covers you for a certain amount of time. If you get a five year term, your premium will stay locked in for five years. A 20 year term will stay locked in at the price for 20 years but at the end of the term, the price will go up to what it would be for whatever age you are at that time.
Let's say you purchased a 20 year term at age 30, when you are 50, the term will be up to the insurance company will now charge you a premium of a 50 year old instead of a 30 year old, which, by the way, is a lot higher, and will continue to go up every year after that.
Now you should be asking the agents you've met with these questions. Life insurance is a very important purchase and should come with lots of background research. you should always research all the companies you come across with. Checking their ratings, and simple searches on that company will not suffice. You always have to be careful where you put your money in, so take the time to do in depth research.