Insurance in my mind has one purpose, and one purpose only. To provide an income for your loved ones in the event of your untimely death. It's not an investment system, not a tool for creating money, and I would never use it to cover a one time cost like a funeral. If you die, your spouse will no longer have your paycheque coming in. Insurance allows you to cover it.
Suppose you are a 35 year old making $50,000 a year. If you died tomorrow, assume the spouse needs 80% of your income, (you no longer need to eat and so no longer consumes the extra 20%) which brings it down to $40,000. Assuming that the there are some death benefits of $10,000 a year, the spouse only needs $30,000 a year.
Suppose you don't want your 35 year old spouse, to have to worry about money until they retire. The government pention kicks in at age 67. Yup, the date is shifting away from 65, look out! By the time you are old enough to retire, you will still be too young!
In order for your spouse to have an income of $30,000 a year in todays dollars for the next 32 years they would need a lump sum of $637,030, which at 3% inflation and 6% interest would last 32 years. Of course this doesn't include taxes and who really knows what inflation and interest would do for the next 32 years. It's just an estimate.
So a person in this situation could be justified in buying a policy for $637,030. How much would that cost?
In Canada term4sale.ca shows that a 10 year plan would cost $206 a year, for a 35 year old non-smoker in excellent heatlh. *
In the US term4sale.com shows the same person's 10 year plan would cost $155. * Why the difference in price? It's a good question, that probably involves politices and competition. I don't know.
Both these sites can lead you to agents that use the same software that calculates these quotes, as well as the good people who host StockChase, lifeinsurancecanada.com The insurance agents can guide you through the ins and outs of the Insurance policies.
I'm not an insurance agent, or broker, and my views are strictly non-professional.
* These rates were what was listed at the time, and are bound to change.