Here is a self-explanatory image that describes the “Theory of Decreasing Responsibility”:
Picture credit: http://www.askprimerica.com/category/primerica/
In short, the Theory of Decreasing Responsibility postulates that a person starts off with low assets and high liabilities, and hence has the greatest need for insurance. As his wealth builds up and his liabilities is paid off over the years, his need for insurance will reduce accordingly. He will then reach a point where he needs little to no insurance as he will be able to self-insure using his accumulated wealth.
Indeed, a young person has a great need for insurance. If he were to be incapacitated and unable to work for the rest of his life, the amount of money he will need to replace his income is staggering. An older person in his sixties who is leaving the workforce soon anyway will not need a great amount of income replacement ......