The reason medical schools require future doctors to study clinically as well as academically is so they can take the book learning and see how it is actually applied at the bedside. Theory is great, but if it doesn't work in practice then it is of limited value.

A recent release from the Insurance Information Institute (I.I.I.) about people needing life insurance even after the kids are grown and the mortgage is paid is of considerable theoretical value. Unfortunately it fails "at the bedside". It's not that I disagree that empty nesters need life insurance; it's that the medicine prescribed is inappropriate for many people. According to the I.I.I., "….even couples with grown children, who have set aside college tuition monies and are close to paying off a mortgage ought to discuss with their insurance agent or broker the benefits of purchasing a new term life insurance policy when their existing one lapses."

Here’s the number one reason why this advice may well be bad. There is no reason to believe that the need for life insurance will completely disappear at the end of the new term policy's existence. Let's say a person buys a 20-year term policy at 25, has two kids and a mortgage. Twenty years later, the kids are almost, but not quite, gone and the mortgage is almost, but not quite, paid off.

So the policyholder buys another 20-year term policy - assuming he or she is still insurable and can get the insurance. He's now 45 and figures he will keep it until age 65 when he retires. But life expectancies at 65 are not what they used to be. For every couple age 65, the odds are better than 50% that one will still be alive after 90. When faced with that fact, most people do not want to drop their life insurance at 65. But those with term insurance have little choice. Even if they are insurable, the premiums are almost prohibitive at that point.

In other words, the basic premise underlying the I.I.I. advice is flawed. It presumes that the need for life insurance disappears when the children are grown or thereabouts. But after 40 years at the "bedside" of more than a thousand policyholders, I can assure you, most people do not want to drop their life insurance at retirement. But usually, those with only term insurance have no choice.

What's the answer? Well I.I.I. provides it near the end of their article. Permanent life insurance with its level premiums for life, lack of need to re-qualify after initial purchase, ability to discontinue premiums at retirement without losing the insurance and growing cash reserve fund is the answer. Admittedly more expensive at the outset, the premium thereafter never increases and, by the time a person is in his or her 50s and 60s, is less than term insurance bought at that age.

Properly structured, premiums can be discontinued at 65 or any other age without losing the insurance. And the cash surrender value is a wonderful emergency fund for such things as nursing home care or just for fun - like that trip to Australia you've always dreamed about.

The Insurance Information Institute is to be applauded for raising the right question. They just didn't give the best answer. The "patient" may well not recover.

However, their advice to see an agent or broker is right on target. But not just to get prices of term insurance. The advice and counsel of an agent or broker can help you decide first, how much life insurance you need and then what kind to buy. The latter question involves not only budgetary decisions, but also considerations about the future. If you believe you will need the insurance into your retirement, as most retirees discover, term insurance may not be your best buy, at least not for the long term.

My advice is first to get enough life insurance, even if you can only afford term insurance. And then, as time passes and your budget allows, convert some or even all of the term insurance to permanent insurance.

You'll be glad you did.