I was discussing things with a client when I asked them how the were covered for life insurance. They informed me that they had plenty and they it was not an issue. They had 2 times their annual salary.
When I then asked them a couple more questions, like how much was left on the mortgage, where there any outstanding student loans, credit card bills, car payments and educational funds for the kids they understood my rational.
Their 2 times their annual salary was not enough to cover half of the outstanding obligations.
Life insurance has a two tiered effect in ones life. The first, I just covered in that it has the potential to look after those left behind and not leave them in debt. The other is to leverage their money for the well being of those they leave behind.
Think about it, what if your grandparents had leveraged their money and had life insurance that left your parents with enough to provide a significant safety new for them and their kids (you).
I believe I have enough insurance to cover all the debts and education and then allow my wife the luxury of working or not working. But, she may need to work in the current environment if only for benefits (the great unknown variable).
But this also allows her to transfer a large safety net to our children as well.
The wealthy utilize life insurance to protect their estates, but those whom perceive themselves to be middle class only see it as an expense.