Assuming one does not choose to buy life insurance, can redirecting the same amount of money annually/monthly towards investing actually be more profitable in the long run?

You’re right, it could be and as a long term investor I absolutely understand where you’re coming from. From your question, I have to assume you are comparing the profitability between life protection and investments. Here’s just my two cents.

1. It would be unfair to draw a comparison. protection should never be seen as an “investment” because they serve two very different purposes; risk management and wealth accumulation. This are different things as mentioned by Elijah.

2. Do you know the best time to buy life insurance? The day before that person dies. Buying it today, and dying the next. Max returns, no other investments beat its ROI as mentioned. But the problem lies here: all future is uncertain. Also, Insurance creates money that isn’t there, does that make it more profitable?

3. Yes, of course you could always go for Term plans. But there are differences between term and life which seedly has plenty of articles on. Also, not all life insurances have an ILP element. Bottomline, term plans cover you for a certain amount of years, after which the plan ceases. Whereas life plans cover you for your whole life. Maybe you’re thinking, oh I could get term first then life but will your health still be the same? Are you still as insurable now than 20 years ago? Ofc there are convertible term plans but Please know that this is a very general statement and you would really need to do your own research and due diligence 🙏🏻

4. There’s a chance your long term investments turn out super. Great. Your wealth could easily cover for anything that comes your way. But Why let something unexpected eat into your hard earned and long awaited for wealth?

Ultimately everything is dependent on your own needs, your decision. If you have a plan on how and what to invest in, thats fantastic. Do that and with coverage.

Hey there.

I have clients who fell sick in their mid 30s and 40s. You really never know, especially in your essential working years. The profits you make in your investment will ultimately be lost in the medical bills in the event of sickness.

No one opts to buy a car because of the air bag but you won't buy a car without it.
Financial planning is an integral part of life. You can reach me here to find out more.​​​

Do your sums. Adjust your expectations towards the longer term.

Theoretically, it works. Practically, I rarely see it work. Habits are hard to break.

Executing the theory without practice is like hopping onto a race car with knowledge on driving it learned solely from a book.

Choose the plan that you can stick too over the long term. All plans will fail if you do not stick to them.

I will put it out there, that as a practitioner. It just does not work.​​​

Of course! Assuming you're healthy throughout, you'll eventually be more "profitable".

Insurance is a sunk cost to manage risks and unforeseen circumstances in life.

Drawing an analogy from covid-19 situation, imagine paying your premiums for life insurance is like paying tax to the government. And imagine being unemployed in this economy is akin to being struck with an illness, the government pays out billions of dollars of relief to care for our people just as how an insurance policy will be used to support and keep you going.

Insurance is profitable only when the insured event happens to you and the earlier it happens, the greater your "ROI". And almost no investment out there can give the same ROI as how an insurance policy pays out. ​​​