So many people put off buying life insurance! In actuality, getting a policy probably is easier and less costly than you think.

And the sense of peace you get from knowing that your family is protected? That’s priceless.

So do you need a life insurance policy? What kind of policy is right for you? And how much should you get? Let’s dive in! 

Who Needs Life Insurance . . .

If you provide something of monetary value to your family — a paycheck, a pension or Social Security check, childcare and homemaking services, — and that something would stop if you die, then you probably need life insurance.

Breadwinner? Stay-at-home mom? Caregiver for an aging parent? You may need a policy.

. . . And Who Doesn’t

If no one depends on you financially, you most likely don’t need life insurance!

The biggest example? Kids. Your kids do not need to be insured. From purely a balance sheet perspective, your kids are an expense — not a source of income. I’ll never understand those Gerber commercials that tell you to buy a $100k life insurance policy for a baby!

So who else can skip the life insurance? Pretty much any person whose family wouldn’t be financially impaired if she died.

• Maybe you have no financial dependents.
• Or your savings or investments are currently sufficient — meaning they’ll keep your husband and/or kids in the lifestyle you want for them.
• Or all of the income you currently provide — like a pension — will still be paid to your dependents even after you die.

What Type to Buy

Insurance and investments are two totally separate animals . . . and they should live in their own distinct areas of your financial life. That’s why I’m a huge believer in term life insurance over the various forms of permanent (whole life) insurance.

When you mess around with permanent life insurance, you wind up . . .

• Mixing life insurance and investments in a messy way.
• Carrying a life insurance policy that potentially insures you long after you actually need it.
• Shelling out for pricey agent commissions.
• Paying way more than you would for a term life policy and a separate investment portfolio.

Term life is not only incredibly inexpensive. It’s also easy to understand and simple to get.

When my husband and I picked up our policies several years ago, we each filled out a (pretty short!) application, specified our desired policy limits, went through a short medical test, and were all set for decades of coverage.

(Check out some real term insurance rates here.)

How Much to Get

Skip the rules of thumb tell you to get 10 times your income, 20 times your income, or the like.

Your financial situation is unique! Crunch your own numbers, talk to a financial advisor, or use an online calculator. You’ll want to consider your age, your current assets, your future assets, big expenses you’ll want to cover (education costs, the mortgage, etc.).

Be prepared: The amount that’s recommended may seem huge! Does your family really need half a million, one million, or two million dollars when you die?!

Could be!

Keep in mind that your goal may be to support your family financially — as much as you would have if you were still alive — for decades! And, ideally in the event of your death, your family would take the life insurance payout, invest it, and live mostly or exclusively off of the interest payments. That way, they won’t spend down the policy’s payout during the time period in which they still rely on it.

If you’ve been putting off looking at life insurance policies, take 10 minutes to fill out an online quote questionnaire and review your options!

What’s been keeping you from getting a life insurance policy?