When you think about the important things in life, getting a consistent paycheck is one of them, right? There are bills to pay and mouths to feed. So, what can you do to provide for your family if something were to happen to you?
You might think, life insurance. But maybe you’re confused about whether or not you even need it. Well, that’s understandable—everyone’s trying to sell you some! And you might be told you need it when, in fact, you don’t.
So, do you need life insurance or not? We’re here to help! Take a look at this list to see if life insurance is the right choice depending on where you're at in life . . .
1. You’re Young and Single
If you’re young and single, there’s no urgent need for life insurance because the only person you’re looking out for is you. No one else is dependent on your income for anything. If you have the option to take out some group life insurance through your employer, it’s a good idea. Why? Because it won’t cost you anything getting it through work. But if you’re lumbered with student debt (these days unfortunately it’s likely you will be) then a life insurance policy to cover your income while you’re paying off this debt is a smart move.
2. You’re Newly Married
Congrats, newlyweds! You’re about to start what is hopefully a long journey together, which may involve getting a mortgage at some point. Being married means you’re there for one another, through the good times and hard. You’re both contributing to the partnership in some way. And if you’re busy paying off debt (not to mention a mortgage!) having some life insurance is a wise thing – to protect your spouse if anything were to happen during the journey.
3. You Have Young Children
Having young children or teens (we’re talking under 18) means you have dependents, which means you need life insurance. Your income covers the cost of childcare, school fees, medical bills and everything else they need. Protect this income with life insurance until your children are college age and able to support themselves with their own paychecks. A proud moment for them and you!
4. You’re an Empty Nester
Let’s say you’re a couple in your 50s. The kids have left home and can support themselves—hooray! But, you’re still paying off your mortgage while working towards your retirement. You need some life insurance to protect that income of yours. The untimely death of you or your spouse could leave the other with debt – and that’s the last thing either of you want the other to face heading into retirement.
5. You’re Retired
Just because you’re retired doesn’t mean it’s too late for life insurance if you need it. You could get a term life policy to cover you until your debts are paid off and you’re self-insured. Being self-insured means you’re debt-free and have enough in the bank to look after your dependents if you died. Life insurance will cost you more if you’re buying it when you’re older, but a small term life plan which is short in length won’t hit your pocket too hard.
What Type of Life Insurance Should I Get?
When it comes to the type of insurance you should buy, term life insurance is the best option. The length of your term should be 15–20 years, which covers the length of time any dependents you have rely on your income.
It’s best to get life insurance earlier rather than later in your life (when it will be more expensive). Also, avoid the mistake of taking out too little coverage. We always recommend getting 10–12 times your annual income.