Life Insurance

Do I Really Need Life Insurance?

Ethos Life | Mar 25, 2019
Grandmother helping child cook food in a kitchen
You may have been told that life insurance is important for securing your family’s future. You may also be asking yourself if it’s really necessary. The short answer is yes - if you have a family, spouse, or someone else who depends on you, then life insurance is often considered a necessity.

How exactly does life insurance work? In this blog, we’ll share how life insurance works and who it covers. We'll also describe what type of life insurance may be the best fit for your family’s needs.

I Don’t Think I Need It

When you die while your life insurance policy is in force, your beneficiaries will be paid a death benefit. Your death benefit can be used to cover a variety of expenses, which can include your burial and funeral arrangements. Your beneficiaries can also use your death benefit to cover any debts or other bills you may have left behind. If you don’t have anyone who depends on you financially, or who would be responsible for your outstanding debts should you pass away, then you may not need life insurance. But if you do have loved ones, and even a little debt, you may want to consider how life insurance can be used to protect your family from financial crisis should you pass away during your income-earning years.

If you’re not a primary breadwinner, life insurance can still help protect your family’s finances. For example, if you’re a stay-at-home parent who suddenly passes away - your partner may be forced to take on extra work to pay for the household and childcare tasks you once covered. If you are a single professional, you can also benefit from life insurance if you have a parent or relative who depends on your paycheck or caregiving. If you were to suddenly die, your loved ones would be able to use the death benefit from your life insurance policy to cover their basic needs and expenses during a difficult time.

I Already Have Life Insurance

You may be reading this and have a life insurance policy through your employer. While some jobs offer life insurance as a benefit, coverage from employer-sponsored group plans may not cover much beyond your funeral expenses. Owning a personal life insurance policy can give your beneficiaries more of a cushion to settle debts and other financial obligations you may leave behind.

Now that we’ve established the importance of life insurance, it’s time to break down what type may be right for you. The first question you may have is if you should get term life insurance or permanent life insurance, which depends a lot on your situation. To compare term life insurance and permanent life insurance, click here.

Who Should Get Term Life Insurance?

Term life insurance is generally the best option if you only need coverage for a certain period of time. For example, you may be the primary wage earner in your family. In that case, you may want term life insurance for the duration of your working years. Or you may be a stay-at-home parent and may want term life insurance until your children are out of the house. Term life insurance provides you with the flexibility to have coverage while you need it, and not paying for it when you don’t.

Term policies can also be the smartest option if you’re worried about passing on large debts to loved ones. If you have a 30-year mortgage and suddenly die, your insurance could relieve your partner from the burden of paying it off. Likewise, you may have outstanding student loans or credit card balances that you don’t want to leave behind. Life insurance benefits can help protect your loved ones from the stress of dealing with those debts.

Term life insurance is usually more affordable than permanent life insurance. Cost considerations aside, there are situations when permanent life insurance may be a smarter choice. Whether term life insurance meets your needs, or if you would be better off with a permanent product, being insured can help protect the people you care about most. If you’re interested in term life insurance, our simple quote process just has five quick questions. We can give you a quote in minutes.