What does Warren Buffett say about life insurance?
Warren Buffett views basic term life insurance as an absolute necessity for individuals who have financial dependents, emphasizing that young families must protect their economic future against the sudden loss of a breadwinner. However, he strongly discourages the purchase of complex cash-value life insurance products, whole life policies, or universal life insurance plans, viewing them as expensive financial hybrid instruments that combine high-cost insurance with poor-yielding investment components. Buffett argues that the fees and commissions embedded in permanent life insurance policies severely degrade the long-term compounding potential of the money invested. His consistent, pragmatic financial advice is straightforward and timeless: buy inexpensive term life insurance to cover your family's protection needs during your working years, and invest your remaining savings independently in low-cost equity index funds where you can retain full control and avoid exorbitant insurance company fees.
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