I can hear the whole life insurance guys once again musing about what kind of a nut case would recommend term life insurance during crazy economic times. Well guys, I’m back!!

For those over 50 and over 60 life insurance may be the only way to salvage the vestiges of a retirement fund that is being beat to death at the whim of stock market crazies. As one financial analyst put it the other day, the stock market no longer reflects actual value fluctuations in stock, but rather the emotional swings of the stock owners to every piece of news, related or not.

In 2008 when everything tanked and so many of us lost huge amounts of our retirement portfolios I highly recommended buying a 10 year term policy equal to the amount lost. 10 year term is inexpensive and I believe a prudent part of your portfolio in times like these for those of us who don’t have time to make up the losses with additional income. Because of our age we are simply at more of a risk than the kids of passing away before the value is naturally replaced by the market, if that ever happens. I am rarely pessimistic, but the future of investments has me rethinking how and when I will retire. Luckily I love what I do and it isn’t too hard on me so I can see doing this well into my 100’s with good hearing aids.

Do I think it would be a good idea to turn your investment money toward whole life insurance? I’ve never recommended whole life insurance and especially not now and not for this purpose. Whole life is going to be easily 10 times more premium than 10 year term insurance and I believe the marching order for the day should be frugal and prudent. If you buy whole life with an already stretched budget you’ll either end up under insured to stay within that budget or you’ll buy enough insurance and bust your budget with whole life.

Especially in times like this I think it’s so important to stay focused and remember that life insurance is all about a tax free death benefit. When you try to turn it into an investment rather than a tool to replace something lost, well, you’ve lost focus.

With the latest market and economic shakeup and the lack of guts on the part of our government to quit spending what it doesn’t have, one thing has changed from my 2008 recommendation. I would now say that if a longer term is budgetable, it is worth looking at. You can always drop it if things turn around and you feel confident about the future, but you may not always be able to get (for health or budget reasons).

Bottom line. The economy has had so many of us left like deer in the headlights, frozen and unable to figure out what to do with our investments. Buying term insurance is something easy to do that can allow you room to breathe and think.