I have been in the life insurance business for more than 40 years and have heard many uninformed people criticise life insurance. It has even become quite an industry to discount the merits of owning a policy.

Agents and brokers selling these products have unique types of exposure and are more qualified to give an opinion on the merits of owning a policy than the so called experts who know little or nothing about the subject. Want to know how important life insurance is? Ask an agent or better yet ask a widow with small children. I have paid many a claim to wives who had their husbands suddenly die. I have never been told by any of them that their caring husband did a terrible thing by purchasing a life insurance policy.

I have on occasion paid small claims to the mother of a young man or woman who died too young. These mothers were not expecting any financial gain from the death of their child. The fact is they didn't even want the money but it certainly helped bury the child they loved so much. It also helped clear up outstanding debt or even paid an attorney who guided the survivors through probate.

Is life insurance a bad thing? It certainly is not. It is, in fact, a great financial instrument.

In order to strengthen their arguments these pundits pick at the type of policy you buy. Let us look at them together.

Term life policies are the cheapest types to buy. If you decide to spend a certain amount of money on life insurance you will get considerable more death benefit if you buy a term policy. Here is the problem with term though; you have to die to win. Term insurance has no living benefits. Here is something else very few members of the public know. Term insurance doesn't stay in force very long. Most term policies go into a state of lapse before the end of the first year. Why?

The first time the policy owner has some sort of financial problem they stop paying the premium. The individual feels he, or she, can always get another one when they are in a better financial position. What is wrong with that?

First of all you will be older when you decide to buy your term policy again. It will therefore cost more for the same policy. Another thing is that the older you get the more likely it is that your health will deteriorate. Now you really need your life insurance policy to protect your family. You may need to pay even more to get it or you may not be able to get it at all. This would certainly put you in an uncomfortable position, wouldn't it.

Permanent life insurance tends to stay in force longer than term policies. Whether you own a Universal life policy, a variable universal life policy, a variable life policy or a whole life policy in some form you have something to look forward to during your lifetime. These policies are not going to make you rich. The fact is it takes quite a while before you get to the break even point but at least there is something in it for you if you don't die too young.

You can use your cash values plus your dividends over the years. It is always recommended that you put it back into the policy if you take a loan. You can also let your cash values and dividends stay in the policy and accumulate until you have a substantial sum. You can then use it to put into some sort of investment that would yield you a better return on your money. For the record, dividends are not guaranteed.

Permanent policies last longer. In most cases you can keep your policy to age 100. Upon your death the face amount plus the paid up additions will be paid to your loved ones. The amount will be less than would be paid if you were spending the same amount on a term policy but the cash will be there. You are more likely to have your policy in force when you die.

The experts say buy term and invest the difference. If that is what they have been doing I would like to see what their portfolios look like now. They love to talk about investing in stocks or mutual funds, I wonder what they are worth now?

If you are going to invest the difference I suggest you put it in real estate as that is the safest investment. The value of your property may decrease for a while but just be patient and it will come back stronger than it ever was.

Intelligent people do buy life insurance, some term and some permanent policies. The key, however, is discipline.