Jude is 70 years old and retired. She's paying $2,569 every year for a whole life insurance policy worth $50,000 from Mutual of Omaha. The reason? She wants to leave her two kids "a little something" when she's gone—something beyond her modest 401(k).
It's a sweet impulse. It's also, according to Suze Orman, a terrible financial move.
On an October episode of her "Women & Money" podcast, Orman responded to Jude's letter with characteristic directness. "Let's not worry about the kids," she said. "You're 70 years of age. Can we just start thinking about ourselves versus our kids?"
Orman's argument came down to simple math. If Jude took that $2,569 annual premium and invested it with a modest 8-10% return, she'd have around $45,000 in a decade. Wait 20 years? She's looking at $160,000—more than three times what the insurance policy would pay out.
"So yeah, you can do better things with it than that," Orman said.
But here's the thing: Jude wasn't buying this policy because it was mathematically optimal. She bought it because she's a mom, and moms worry about their kids even when their kids are probably in their 40s. The spreadsheet might say one thing, but maternal instinct says another. For a lot of parents, not leaving something tangible behind feels like dropping the ball, regardless of what compound interest suggests.
Orman gets that tension. She didn't just dismiss Jude's feelings—she reframed them.
"The greatest thing you can pass along to them, Jude, is them seeing that their mother is living life—not, 'Oh look, we got this money, but my mom didn't do anything,'" she explained.
In other words, your kids don't need an insurance payout as much as they need to see you enjoying retirement. Model a life well-lived instead of sacrificing your financial flexibility for a symbolic gesture.
Still, Orman added one absolute rule that everyone should memorize: "Never cancel an insurance policy unless you know you are perfectly healthy. Period."
That's the escape hatch. If your health has deteriorated, keeping the policy might actually make sense, even if the numbers don't look great. But if you're healthy? Orman's advice is clear: redirect that money toward your own financial security.
The real question isn't whether you love your kids enough to leave them money. It's whether there's a smarter way to care for both them and yourself—with tools that actually work in your favor.
This is exactly the kind of decision where personalized financial advice makes a difference. What feels right emotionally and what's strategically sound aren't always aligned, and sorting through that tension alone can be tough. The right advisor can help you figure out when to hold on and when to let go.