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When should you get life insurance?

When to get life insurance is a personal decision, but the younger you buy life insurance, the less you'll pay.

Buying life insurance usually isn’t at the top of a young adult’s financial priority list. But maybe it should be.

You need to buy life insurance when somebody else depends on your income.

Life insurance will provide your partner or children with a lump sum of tax-free money in the event you die prematurely. We know that’s not fun to think about. But if you have a spouse, children, or anyone else who depends upon your income, getting life insurance is a priceless gift.

And, the truth is, the younger you are, the less life insurance costs. Although most people don’t think about life insurance when they’re single and childless, there’s an argument to be made to buying a policy anyway if you expect to one day start a family.

Do I need life insurance?

Although age may play a role in how much life insurance coverage you need, the decision to buy life insurance has nothing to do with age. So when should you get life insurance?

  • If have children under the age of 18, you should get life insurance.
  • If you’re married and your spouse relies on your income (even some of it), you should get life insurance.
  • If you’re single and childless, you might not need life insurance yet.
  • If you have enough savings or investments to provide for your family after your death, you might not need life insurance.

Get life insurance if you have a family

In most cases, you need life insurance when you start a family. Because life insurance isn’t for you — it’s to provide for your family in case you die and can no longer take care of them.

In addition, there may be special situations in which you don’t have a family of your own but may still want some life insurance protection. For example, if a parent has cosigned a large student loan or a mortgage for you, a modest life insurance policy could pay their share in the event something happens to you.

Most people begin to think about life insurance when they have children and want to ensure their financial protection. That’s what my wife and I did. Shortly after our daughter was born, we both took out term life insurance policies in amounts that would replace each of our individual income for 20 years and cover the expected cost of our daughter’s college tuition. When our second child was born, we increased our policy to take our son’s expenses into account.

If you’re wise, you might start planning for your life insurance needs before your first child is born.

Get life insurance if you’re married

Even if you don’t have (or plan on having) kids, you should buy life insurance for your spouse.

Life insurance is obviously critical if your spouse doesn’t work and relies upon your income. But, even if you both work, chances are you rely on both incomes to support your lifestyle. If one of you were to die, the surviving spouse would perhaps need to sell your home or make other significant changes to life on just one income. In this case, life insurance would ensure the surviving spouse has the financial resources to continue making ends meet, at least for a number of years.

Get life insurance while you’re young

Life insurance gets more expensive the older you get. Life insurance is also less expensive the healthier you are.

Even if you’re in the best health today, you never know what tomorrow will bring. Common health conditions that tend to crop up with age, like high blood pressure and diabetes, can make life insurance significantly more expensive. A number of conditions can also prevent you from getting life insurance at all.

The bottom line is, even if you’re unmarried and childless now, buying life insurance while you’re young and healthy can be a savvy financial move that you’ll be grateful for years down the road.

How much life insurance to get

As a rule, you should get as much life insurance as your dependent(s) will need to continue their lifestyle without your income.

Depending on a few factors, this could be millions of dollars, or it could be a more modest amount. To determine how much life insurance you need:

  • Multiply your annual income by the number of years you want the insurance to cover.
  • Add any fixed expenses (like kids’ college tuition).
  • Finally, subtract any non-retirement savings or investments you have that could cover some of these costs in lieu of an insurance benefit.

Alternatively, use our simple life insurance calculator to quickly get an approximation of how much life insurance you should buy.

Assets decrease life insurance need

The more money you have saved, the less life insurance you need to buy. Because the ultimate goal of life insurance is to replace your income for your family, savings and investments can save the same purpose. Some people like to buy more life insurance than they need (simply because term life insurance is relatively cheap for young applicants). But if you determine, for example, that your family would need $1 million to survive without your income, and you have $500,000 in savings, buying a $1 million life insurance policy would be overkill. A $500,000 life insurance policy and your $500,000 in savings would cover your family’s needs.

Lifestyle cost

Yes, your family is one consideration, but your cost of living also comes into play. If you have a mortgage on your home, for instance, your untimely death would leave your survivors with the responsibility of paying it.

Look at your overall monthly expenses and determine how much of a hole there would be if your income was gone. Not only will this help you determine whether you need life insurance, but you can also decide how much of a policy you need to ensure your survivors can pay those bills long after your death.

Business ownership

If you work for someone else, you’ll only need to worry about your personal expenses. But what happens when you run a business? If you have a business partner or employees, you’ll need to think about the effects of your death. You could set up a life insurance policy with your business partner as the beneficiary to keep things going.

But even if you’re a sole proprietor, a life insurance policy can be a good move. Chances are, you have some business debts that would have to be paid off if you were no longer around. Life insurance gives your loved ones the funds they need to tie up all the loose ends.

Final expenses

There’s also the matter of funeral expenses. Life insurance will give your family the funds necessary to pay all of those final expenses and get the closure they need. Look at your savings and determine if you have enough to cover those costs. If not, a life insurance policy could be what your family needs to cover everything.

While all this death talk may be a little morbid, it’s more important that you have the peace of mind you need to know your loved ones have security. Chances are, your life insurance policy will never be used, but having one may help you sleep a little better at night.

How to buy life insurance

Although there are dozens of different life insurance products that can quickly get complicated, the vast majority of people only need simple term life insurance. Fortunately, it’s easy to buy term life insurance online.

A number of the best life insurance companies for young adults make it possible to buy life insurance entirely online. One of the top options, Ladder Life, is 100% digital when you when you apply for $3M in coverage or less. That’s no doctors, no needles and no paperwork.

That said, most traditional life insurance policies will require a brief medical exam as part of your application. Insurance companies make this process relative easy — they’ll send a nurse to your home or office at a time that’s convenient for you. If you’re afraid of needles or otherwise want to avoid the hassle, some insurers offer no medical exam life insurance policies. Just know that 1) you’ll pay slightly more for these policies and 2) you’ll be limited in how much coverage you can buy. Most no medical exam life insurance policies are limited to $1 million in coverage.

You should also take the time to learn more about the differences between term life insurance and whole life insurance (sometimes referred to as permanent life insurance). Lauren and I stuck with simple term life insurance, and recommend you do, too.


So, who needs life insurance? Those whose death would leave loved ones financially strapped. If you have people depending on your income, a life insurance policy is a wise idea. Your age, health, and other factors also determine whether you need life insurance, but simply having a policy can give you peace in knowing that your loved ones will be taken care of if something unexpected happens.

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