Do You Need Life Insurance?

When most people think about life insurance, they assume it’s only for parents or people nearing retirement. But the truth is, life insurance can be a smart financial move for a wide range of people at different life stages, and with different goals.

So, do you need life insurance? If someone you love would face financial hardship without your income or unpaid work, it’s worth considering a policy. In this guide, we’ll break down who can benefit from life insurance, what kind of policy might be right, and how to decide what makes sense for you.

Key Groups Who Should Consider Life Insurance

A policy can be a smart move for anyone who wants to protect loved ones from financial strain if something unexpected happens. If you’re asking the question ‘do I need life insurance,’ here are some key groups who should consider getting life insurance:

• Parents and guardians: Whether you’re raising young kids or supporting children through college, life insurance can help cover childcare, education, and living expenses if you’re no longer around. It’s important to cover both primary wage earners and stay-at-home parents.
• Homeowners and those with shared debt: If you share a mortgage or have co-signed loans, life insurance can ensure your partner or loved ones aren’t left with a financial burden.
• Married couples and domestic partners: Even if you don’t have kids, your income may support shared goals like homeownership or retirement. A life insurance policy can help your partner stay financially stable after your death.
• Single adults with dependents: If you support aging parents, a sibling, or someone with special needs, life insurance can help provide continued care and support in your absence.
• Business owners: Life insurance can protect your business partners, help with succession planning, or fund a buy-sell agreement to ensure a smooth transition.
• Senior citizens: While seniors may not need coverage for mortgage protection or college tuition, it’s still important to consider final expenses, or leaving a legacy for their families.
• Young, healthy adults: You may not need life insurance right now, but locking in low rates while you’re young and healthy could save you money in the long run.

Who Should Get Term Life Insurance?

Term life insurance is often the most affordable and straightforward type of life insurance. It offers coverage for a set period (typically 10 - 30 years) and is designed to protect your loved ones during your prime working and income-earning years.

Term life insurance is typically a good fit for:

• Young families on a budget: Term life offers higher coverage at a lower cost, making it a practical option for parents looking to protect their children and potentially cover big-ticket items like a mortgage or future college costs.
• People with temporary financial obligations: If you have a loan, mortgage, or other time-bound financial responsibilities, term life can be tailored to match that timeframe.
• Primary breadwinners: If someone depends on your income, term life can help ensure your family isn’t left financially vulnerable if something happens to you.
• People who want a simple solution: Term policies are typically easier to understand, quicker to apply for, and available without a medical exam through Ethos.

Not sure how much coverage you need? Try our simple Life Insurance Calculator to estimate your family’s needs.

Who Should Get Whole Life Insurance?

Whole life insurance is a type of permanent coverage that lasts your entire life and includes a savings component called cash value. While it’s typically more expensive than term, it offers lifelong protection and can be part of a long-term financial strategy.

Whole life insurance may be a good fit for:

• People who want lifelong coverage: If you don’t want to worry about your coverage expiring and want to leave behind a guaranteed death benefit, whole life can offer peace of mind.\ Disclaimer: Based on the claims paying ability of the issuer.
• Those interested in building cash value: Whole life policies accumulate cash value over time, which you can borrow against or use for future expenses.
• High earners or estate planners: The predictable nature of whole life can help with estate planning or supplement other financial strategies.
• Parents or grandparents planning a legacy: Some people buy whole life policies to leave behind funds for heirs or cover future expenses like education or caregiving.

When You May Not Need Life Insurance

While life insurance offers important protection for many, it’s not necessary for everyone. If no one depends on your income or if your death wouldn’t create a financial burden for others, you may not need a policy right now.

You might not need life insurance if:

• You have no financial dependents. If you’re single, child-free, and no one relies on your income, a policy may not be a priority.
• You’ve already built substantial wealth. If your assets are more than enough to cover final expenses and support your loved ones, you might choose to self-insure instead.
• You're fully covered through another plan. In some cases, a comprehensive employer-sponsored policy might be enough, though it's important to review whether the coverage would follow you if you leave your job.

It’s also important to remember that life insurance needs often shift with life stages. Even if you don’t need coverage now, that could change down the road with a new job, marriage, children, or home purchase.

How to Decide What’s Right for You

Still not sure where you fall? If you’re asking yourself ‘do I have to have life insurance?’ consider these questions to help guide you:

• Would someone struggle financially if I passed away?
• Do I have debts that others would have to cover?
• Would I want to leave a legacy?

If you answered “yes” to any of the above, you may fit in the group of people who should buy life insurance. Even a modest policy can offer peace of mind and protection.

What if I already have coverage through work?

You may already have some life insurance coverage from your employer. However, that policy might only provide a fraction of the coverage you actually need. Employer-sponsored policies typically offer coverage that is about 1-2X your annual salary. Financial experts recommend having coverage that is about 10X your salary. This disparity can result in a large gap in protection if you’re solely relying on your policy through work—which is why many people buy individual term policies to supplement the coverage they receive through work. Learn more!

How often should you re-evaluate your insurance?

Some experts recommend assessing your life insurance policy each year. Most agree that it should be done after significant life events. 

Because of how life insurance is structured and the purposes it serves, alterations in income, debt, family size, marital status, and more can impact what kind of policy you want or need. When there are changes in these variables, it's a smart time to re-evaluate your insurance. 

Beyond life events, your insurance needs at different stages in life can also vary.

How do you evaluate life insurance?

When you evaluate life insurance, it's essential to be practical. 

First, you'll want to list all of your financial needs that could depend on the policy benefit. Then, compare that to your current financial circumstances. 

Important things to consider are:

• How many people are financially dependent on you
• How much debt you have
• How much coverage you want
• Who your beneficiaries will be

Throughout all of this, it's essential to keep track of what life insurance rates are acceptable for your budget.

FAQs

What factors determine if I need life insurance?

The biggest factor is whether someone would face financial hardship if you passed away. This could include dependents, a partner, or anyone who relies on your income or shared assets. You should also consider current debts, along with future expenses like college or funeral costs.

Should young adults or singles get life insurance?

Yes, especially if you have any debt with a co-signer, dependents, or plans to start a family down the road. Locking in a policy while you're young and healthy can also help you secure lower rates that can stay fixed for the life of the policy.

How much life insurance coverage do I need?

It depends on your income, debts, number of dependents, and long-term financial goals. Online tools like this life insurance needs calculator can give you a more personalized estimate.

Is term or whole life insurance better for families?

Term life is often the most practical choice for growing families because it's affordable and provides coverage during the years when financial responsibilities (like a mortgage or childcare) are highest. Whole life may appeal more to those with long-term financial goals or legacy planning in mind. Choosing between term life and whole life depends on your particular situation.

Can you get life insurance without a medical exam?

Yes! Some policies, like those offered by Ethos, are available with no medical exam required. Instead, you’ll answer a few health questions online, and approval can happen in minutes.

Do stay-at-home parents really need coverage?

Absolutely. Even without a paycheck, stay-at-home parents provide significant value in caregiving, household management, and more. If something were to happen, replacing those services could be costly. A life insurance policy can help provide financial stability in that situation.

Which Life changing event needs insurance re-evaluation?

These are the five of the most common life event insurance variables that prompt a reconsideration of your life insurance plans - Buying a house, Marriage, Divorce, Parenthood and Children become financially independent.

Ready to Learn More?

Life insurance isn’t just for one type of person or life stage – it’s a smart way to protect the people you care about, no matter where you are in life. When you’re ready to take the next step, Ethos makes it easy to explore your options and apply online in just minutes.

The information and content provided is for informational purposes only, and it is not to be considered legal, tax, investment, or financial advice, recommendation, or endorsement. You should consult with an attorney or other professional to determine what may be best for your individual needs. Guarantees are based on the claims paying ability of the issuer.