Abstract: An individual makes her/his life insurance and stock purchase decisions independently or jointly, depending on risk attitudes and the form of utility function. With an exponential utility function, life insurance and stock purchases are independent of each other. With a power utility function, life insurance and stock purchases are positively related with each other. Future income, bequest motive, risk attitude, and insurance premiums are the most significant factors affecting life insurance decisions. Risk attitudes, stock returns and volatilities are the most significant factors affecting stock purchase decisions. An individual will terminate a life insurance policy when future income is reduced, the bequest motive decreases, or the insurance premium or insurance surrender value increases. The findings from the one-period and two-period models are consistent: the individual purchases life insurance when s/he has a large future income, strong bequest motive, is more risk averse, and offered a cheaper insurance premium. S/he terminates a policy when those conditions no longer exist.