I was thinking about life insurance the other day (for that matter any insurance really). Aren't you just betting that something bad is going to happen? Wouldn't it be better and more optimistic to put the money you would pay towards insurance into a savings account?

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The primary reason for life insurance is to protect your heirs from the big one (your death). If someone depends on your income (e.g. a spouse or children), then you should have life insurance to replace the income they will no longer get if you die. If you have enough savings to to provide sufficient income, then you don't need life insurance. You should buy term insurance until your savings is sufficient to provide the necessary income. Life insurance salesmen will also push life insurance as an investment or as a tax planning tool. If you are a knowledgeable investor, I believe you would be better off buying term insurance and investing the difference.

No it isn't betting. You hope you never collect on life insurance. You just want to be prepared in the unlikely event that you die young. Life insurance is inexpensive when you are young. That is when you need it most. As you get older, you will hopefully have accumulated enough assets that life insurance is no longer necessary.