It's not that it's underpriced, it's that it's subsidized. Specifically, by the fact that the payout is tax free. This means that fairly priced life insurance

It's not that it's underpriced, it's that it's subsidized. Specifically, by the fact that the payout is tax free. This means that fairly priced life insurance is worthwhile if your transaction costs are low enough. This leads to periodic headlines from when somebody discovers the "secret" that many large companies buy life insurance on their employees. Some "expose" about how that shows they cut corners on safety. Nope, it's just they can buy it on a large enough scale to make it worthwhile.