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Willy thinks that the insurance company will pay off on his death, and will provide the $20,000 (a lot more in 1950 than it is today) and will allow Biff and Happy to start something that they can succeed at. Right now Willy thinks that he can offer them nothing, that he is, in fact, worth nothing. This is all wrong because most insurance policies don't pay on suicides, and there is evidence in the play that Willy's prior bungled attempts are well enough known so that there will be no insurance payoff.
Charley offers the obvious --- when you're dead there's no good you can do for anyone ... for Biff, for Happy, for Linda. This fact makes no sense to Willy though, because he sees no possibilities in his present life. His lack of hope leads to his depression which leads to his desperate attempt to be something for his family. Charley was right --- this doesn't do it.
This conversation occurs when Willy goes to Charley to borrow more money. (Charley has been giving Willy money from time to time to help him stay financially afloat.) An argument ensues when Willy turns down the job Charley offers him, apparently for no reason other than pride. During their heated exchange, Willy tells his friend that Howard has fired him, but "I can't work for you, that's all, don't ask me why." Charley is angry, calling Willy a "damned fool," but he shoves money into Willy's hand and tells him to pay his insurance premium. Willy responds:
Funny, y'know? After all the highways, and the trains, and the appointments, and the years, you end up worth more dead than alive.
Charley answers immediately, almost automatically, "Willy, nobody's worth nothin' dead." Then he pauses, Willy's words finally sinking in. Charley is troubled by what he has heard and tries to get Willy's attention to clarify this unexpected exchange, but Willy has reverted into his own world once again. Besides foreshadowing Willy's eventual suicide, this scene provides insight into the depth of Willy's despair. He values himself and his life so little, he truly does believe the only way he can help his family is to die. The proceeds from his insurance do pay off the mortgage on the house, prompting Linda to sob at the play's conclusion, "We're free and clear . . . We're free . . . We're free."
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