Life Insurance, Making Sense of it

First, I want to ask 2 question:

Does anyone of you here have no dependents (wife/children/parents) and enough asset to pay off your debt and the cost of dying ( funeral, estate lawyer's fees, etc.)?

How about with dependents (wife/children/parents) and have enough assets to provide for them after death (investments, trusts, etc.).

If anyone of you are in this situation, insurance is probably an unnecessary expense for you

However, if we have dependents (especially if we are the primary provider) or significant debts that outweigh our assets, then we likely will need insurance to ensure that our dependents are looked after if something happens to us.

Allow me to show you a sample on how an insurance suppose to help our dependents and how much ideally should be in our policy.

Say we are the primary provider at the time of accident and unfortunately the total balance amount to be paid in our mortgages and car loan are around 500K and 100K respectively.

At this point in time, we would wish that the total debt balance has been paid off. We certainly don't want the burden to be pass on to our dependents right? Therefore, we would wish that our lump sum policy coverage is at least 600K (add a little bit more to cover the debt interest). This only covers our debt alone.

How about our income, we surely wish that our dependents after the accident will have continues stream of cash inflow, right?

Now,  say we have a net income amounting  600K annually. We would wish that this cash amount will continue to flow in yearly right? So, we would wish that our dependents will invest in such that the investment will yield 600K per year. If we don't trust that our dependents will invest, we might want to hire trustees or financial planners to do it for them. Say, our dependents/trustees/financial planners somehow knew where to invest that will possibly yield 10% every year. To replace our income, they will need at least 6M when the policy pay off and a little bit more to guard against inflation. This 6M if invested at 10% annually will yield 600K yearly, enough to replace the lost income.

So now, to cover our total debt and to replace our income we will need at least a policy that will pay off at least 6.6M. 6M for investment that will replace the income and 600K to payoff the total debt.

These are just 2 factors in considering the amount of policy we need to have, others would be like when we want our child to study in a university which we need to consider the cost also. Say we need 3M for his/her study. We would wish to add it up to our policy.

Maybe now, insurance make sense to us. But for me, we don't need a life insurance that need to pay premiums throughout our lifetime. So long as we strive to be financially secured someday, what we should get is a renewable term insurance. Remember my question number 2? That's the situation we intend to be in. Our goal is to increase our assets in a certain period where these assets are sufficient or even more than enough to provide for our dependents. When we reach this point in time in His grace, insurance is the least of our worries. By this time, our worries should already be diverted on how to make sure that these assets will be pass on rightfully to our dependents otherwise it will be all for nothing. 

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