Do You Need Life Insurance & When Should You Get It?

You need life insurance if anyone depends on your income or if you have financial obligations others would inherit when you die. Life insurance replaces lost income, pays off debts and covers final expenses for your dependents.

You need life insurance if you:

• Have dependents who rely on your income (spouse, children, aging parents)
• Have a mortgage, business loans or cosigned debt
• Want to cover funeral costs ($7,000 to $15,000) or leave an inheritance

You don't need life insurance if you:

• Have no dependents or financial obligations that would burden others
• Have sufficient assets to cover your family's needs without insurance
• Are financially independent in retirement with no one relying on you

Self-Assessment:

1. Would anyone struggle financially if you died tomorrow? → You need 10 to 12 times your annual income
2. Do you have debts that would transfer to loved ones? → You need enough to cover the full balance
3. Do you want to leave money for specific purposes? → You need permanent coverage with cash value

If you answered yes to any question, you need coverage. The amount and type depend on your specific situation.

Major life changes create new financial responsibilities that signal you need coverage. Get life insurance when:

The best age to buy life insurance is in your 20s or 30s when premiums are lowest and approval is easiest. But coverage makes sense at any age when you have dependents or debts that would burden your family and there are scenarios when you should buy it in your 40s, 50s and even 60s. Here's what to consider at different life stages:

Delaying coverage gets expensive fast. Here's what a healthy 25-year-old male pays for a $500,000, 20-year term policy at different ages:

Wait 10 years and you pay $3,840 extra. Wait 20 years and you pay $13,440 extra for identical coverage.

Health changes raise costs even more. If you develop diabetes, high blood pressure, heart disease or cancer between ages 25 and 35, your premiums will increase beyond the age-related costs. Some conditions make you uninsurable at any price.

Several types of life insurance policies are available, but most buyers should get term life. Term life insurance covers a specified period: 10, 20 or 30 years. 

You should get term life insurance when you:

• Need to cover a mortgage that will be paid off in 15 to 30 years
• Have young children who will become financially independent within 20 to 30 years
• Want affordable coverage to replace income during your working years
• Need temporary protection while building savings and investments

Here are the best term life options.

Permanent life insurance, like whole life, provides lifelong coverage and builds cash value but costs 3 to 10 times more. A 30-year-old pays $300 to $500 monthly for a $500,000 whole life policy versus $40 for term.

You should get permanent life insurance when you:

• Want to leave a guaranteed inheritance regardless of when you die
• Need coverage for estate taxes
• Have a special needs dependent who will need financial support after you die

Here are the best whole life policy options.

After deciding you need coverage, take these steps:

1. Use our life insurance calculator to determine how much life insurance you need.
2. Compare life insurance quotes to see rates from top insurers based on your age and health
3. Read reviews of the best life insurance companies to understand customer service and claims processing. Research the cheapest life insurance policies.

Most healthy applicants can complete the application process online in 15 to 30 minutes. Insurers offer instant approval without medical exams for certain coverage amounts.

We answer common questions to help you figure out if you need life insurance and when to get it: