Taking out a life insurance policy comes with pros and cons. Signing up for minimal amount to cover for the hospital/funeral expenses, estate taxes of the deceased, and one year living expenses for the beneficiary is my best option.
Pros: Tax free for the estate’s beneficiary if irrevocable.
Cons: If the assured declares the insurance, he may risk an untimely death because the substantial claims proceeds may tempt the beneficiary to act foolishly.
If assured decides to keep secret such a policy from the beneficiary, it may never be discovered and claimed.
If the assured dies after paying a few premiums, death claimed may be thoroughly investigated as suspicious and difficult to settle.
BEWARE: When claiming, be ready to provide honest and full details about the policy. Dishonest insurance companies may not disclose any information just to dismiss a claim to retain the payout for their own benefit.
One last word: Insurance companies that appear to be big and very popular may not be the best. To improve their sales, they resort to advertisements on TV, unsolicited text messages and other media.