A wide variety of scenarios warrant buying life insurance, but the simplest rule of thumb is: Does anyone in your life benefit from your financial support? This could be a child, spouse, aging parent or even the cosigner of a student loan who would get stuck with the debt if you weren’t around to pay it off.

If the answer is yes, you probably need life insurance.

Do I need life insurance?

Life insurance replaces the financial support you give to others in the event you’re no longer there to provide for them.

Take a look at the table below to see if you are a likely candidate for life insurance.

How much life insurance do I need?

Life insurance is meant to be an income replacement when you pass away. Policygenius’ experts recommend that you multiply your income by 10-15 times as a starting point. So if your current salary is $50,000, you can estimate that you’ll need $500,000-750,000 in life insurance coverage. However, your coverage should encompass all of your anticipated financial obligations, including debts or aging parents.

Parents or soon-to-be parents should include the cost of raising a family in their calculations as well. You need to account for everyday expenses, education costs, and potentially childcare or housekeeping in addition to your income.

If you have debt from student loans, a mortgage, or some other lending agreement, add that to the amount of coverage you’ll need too. The death benefit can help your family stay in your home if you can no longer make payments on it and protect them from making difficult decisions about any debt you leave behind.

Do I need life insurance if I don’t have any dependents?

You may not think it’s worth buying life insurance while you have no dependents. But by getting life insurance when you’re young, you can make your coverage last longer and save money. Patrick Hanzel, Policygenius’ Advanced Planning Specialist and Certified Financial Planner points out, “If someone knows or expects they will have an insurable need in the near future, we recommend locking in coverage while you are younger and (usually) healthier. I recommend owning coverage as you would five years from today."

Each year you delay buying a policy, the average cost of premiums rise by 4.5-9%. Take a look at the term life rates below to see how they increase by decade.

Methodology: Sample based on 20-year term life insurance policies offered by Policygenius in 2020 for a non-smoker in Preferred health rating.

If you are young and have no dependents, ask yourself:

• Can your loved ones afford the cost of unexpected funeral or medical expenses if you die? The average funeral costs $8,000-10,000. Your beneficiaries can use your life insurance proceeds to cover those expenses. If you become sick or injured and need medical care, the death benefit can be put toward any costs that health insurance does not cover.

• Did someone cosign a loan for your home or car? Just like a student loan, they’ll be responsible for the remaining balance if you die. A life insurance death benefit can cover that outstanding debt for your cosigner as well.

Even if you won’t need the full coverage amount to cover final expenses and debt, the remaining balance could provide financial security to your loved ones or even be donated to a charity of your choosing.

Still not sure if you need life insurance? Take a look at this flowchart to see where you fall.

Who doesn’t need life insurance?

Not everyone needs life insurance, even if they play an important role in their families’ lives. Here are a couple examples of people who usually don’t need term insurance:

• Retirees - Ideally, by the time you reach retirement age your children should be financially independent and you’ve paid off your major debts. At this stage of life, there’s no real need for life insurance.

• Children - While many life insurance companies offer policies specifically designed to cover your kids and some insurance agents may even try to sell you one, it’s not typically recommended because children are not earning a wage or supporting the family.

This isn’t to say that no one in the above scenarios needs life insurance. Individual circumstances should be taken into account. For example, if you have a large estate, you may want a policy to help decrease the burden of estate taxes. But it’s important to think twice about whether it’s truly necessary.

For most people, however, if you have outstanding debts, dependents, or aren’t nearing retirement age, it’s better to get life insurance coverage sooner rather than later.