Do I need life insurance?


If you have shared debts or anyone relies on your income for their financial wellbeing, you should consider getting life insurance coverage.

Reina-Marszalek 1600Pat Hanzel

Reina Marszalek & Patrick Hanzel

Published September 12, 2019


  • Life insurance offers your family financial protection when you’re gone

  • If anyone in your life relies on your income you probably need life insurance

  • Buying life insurance when you’re young can save you a lot of money

A wide variety of scenarios warrant buying life insurance, but the simplest rule of thumb to determine who really needs life insurance is: Does anyone rely on your income for their financial wellbeing? 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.

In this article:

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.

You are a…How life insurance can help
ParentHelps with everyday costs, along with saving for college tuition and other milestones in your child’s future.
SpouseMakes sure you’re covered if you have a mortgage that requires both partners’ salaries for the payments, or if one partner earns the lion’s share of the income to support your lifestyle.
StudentWhile federal student loans are forgiven if the borrower dies, private student loans transfer the debt to the co-signers. Having life insurance can keep them from being stuck with the debt.
EntrepreneurIf your business would cease to exist without you, naming a business partner as a life insurance beneficiary could be helpful. The death benefit can also be used to buy out any remaining shares of the business.

Still curious if you need life insurance? Take a look at this flowchart to see where you fall.

Policygenius Do I Need Life Insurance Flowchart

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. But it’s important to think twice about whether or not it’s truly necessary.


Compare the market, right here.

Policygenius saves you up to 40% by comparing the top-rated insurers in one place.

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

You may be thinking there’s no sense in purchasing life insurance while you have no dependents. By buying life insurance when you’re young, you can make your coverage last longer for the money. As 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."


I recommend owning coverage as you would five years from today.

- Patrick Hanzel, Advanced Planning Specialist and Certified Financial Planner

Take a look at the term life rates below to see how they increase decade by decade.


Methodology: Sample based on a 20-year term life insurance policy for a non-smoker male in Preferred health rating.

How much life insurance do I need?

Once you’ve determined that you need life insurance, the next step is to calculate exactly how much coverage you need. A general rule of thumb is to multiply your income by 10-12. So if your current salary is $50,000, you can estimate that you’ll need $500,000-600,000 in life insurance coverage.

Learn more about how to calculate how much life insurance you need.