Life Insurance
Do I Really Need Life Insurance?
Ethos Life · Mar 25, 2019
Grandmother helping child cook food in a kitchen
We all know that life insurance, in general, is important for taking care of your family’s financial future, but you may be asking yourself if it’s really necessary. The short answer is if you have a family, spouse, or anyone else who depends on you, you should probably have a safety net to protect them. Life insurance can cover a variety of expenses, as we’ve discussed elsewhere, making it an important consideration even for those who aren’t the primary breadwinner of a family.

"I Don’t Think I Need It…”

Even if you think you’re not someone who needs life insurance, you should still consider it. Stay-at-home parents may not be the primary breadwinners in their families but still, provide for their children in important ways that life insurance can help pay to cover. Even couples with no children can benefit from life insurance if one partner depends financially on the other. And while some jobs offer a life insurance policy as a benefit, coverage from employer-sponsored group plans tends to stack up poorly against a dedicated policy of your own, and may not cover much beyond end-of-life expenses. Having your own life insurance policy is also a good safety measure because people rarely work at the same job for their entire lives these days.

The real question is whether you’d be better off getting term life insurance or whole life insurance. And that depends a lot on your situation.

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, if you are the primary earner in your family, you may want term life insurance for the duration of your working years. Or if you are a stay-at-home parent, you 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, but not to keep paying for it once you don’t.

Term policies are also the smartest option for anyone worried about passing on large debts to loved ones. If you have a 30-year mortgage, insurance over the term of the mortgage will make sure that your family is not saddled with the financial burden of paying it off. Likewise, anyone with large debts from student loans or credit cards may want to have insurance until that’s paid off, to avoid leaving debts behind for your family to deal with.

Term life insurance is also, generally speaking, cheaper than whole life insurance, making it a more affordable option if you’re not sure which you need. However, there are cases when whole life insurance is the smarter choice.

Who Should Get Whole Life Insurance?

Whole life insurance is most often favored by wealthier individuals leaving a large inheritance to their children and worried about the burdens of the estate tax. Investors who have already maxed out their IRA contributions and other retirement investments can also use whole life insurance as an extra retirement vehicle since whole life insurance plans have a cash value.

Whether you need term life insurance or would be better off with whole coverage, being insured helps protect the people you care about most. If you’re interested in term life insurance, our simple enrollment process just has five quick questions. We can give you a quote in 30 seconds.