4 Reasons You Need Life Insurance

As a personal finance blogger, I am ashamed to admit this. I’ve been saying this for years but now I plan on getting serious about this. The truth is… We don’t have any life insurance.  We used to have a small amount paid for by our previous employers, but that was almost two years ago…

Michelle Schroeder-Gardner

Last Updated: January 3, 2023

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Check out this list of 4 reasons why you need life insurance.As a personal finance blogger, I am ashamed to admit this. I’ve been saying this for years but now I plan on getting serious about this. The truth is…

We don’t have any life insurance. 

We used to have a small amount paid for by our previous employers, but that was almost two years ago and it no longer exists so it’s not like it helps us at all.

We will absolutely add life insurance before we start a family, but it wouldn’t hurt us to start searching now.

Life insurance is so very important.

The main reason most get life insurance is because it can help your loved ones and anyone who depends on you. This way they can still pay the bills and grieve without having to worry about money. There are many more reasons to get life insurance though!

Below are four reasons for why you may need life insurance. Even if you don’t think you do, there might be a reason below so I suggest you continue reading!

If you are looking for life insurance, I recommend checking out Bestow.


1. Do you have a family?

If you have a spouse and/or children who depend on you and your income, then you should have life insurance.

Life insurance can help your family so that they can continue to pay their normal day-to-day bills and any debt that you may leave behind. Life insurance may even help them pay off the mortgage, pay for their college education, and more.

Just think about it. What would your family do without your income? Would they be limited?


2. Has anyone co-signed a loan for you?

If anyone has co-signed on a loan so that you could get approved, then you MUST have life insurance. This includes car loans, student loan debt, a mortgage, and so on.

Too many people forget about this. Then, when they pass away their loved one who was so nice to co-sign on a loan is left with the debt to pay.

I’m sure you don’t want to do this to anyone. If you have life insurance, then this can be used to pay off your debt so that your co-signers aren’t stuck paying your debt.

It’s the responsible thing to do.

Related: Policygenius Review: Easy & Affordable Way To Get Life Insurance


3. Are you young and healthy?

If you are young, then you may be able to qualify for a cheaper life insurance plan. Many young and healthy people skip life insurance but now may be the time since it is cheap.

If you sign up when you are younger, you may be able to lock in a cheaper plan and give yourself peace of mind for years to come. This is a big reason for why we are thinking about getting it now even though we don’t have children.


4. Do you know how much a funeral is?

Life insurance can help pay for your funeral.

The average funeral is $7,000 to $10,000. If something were to suddenly happen to you, who would have to pay for your funeral expenses?

I know no one likes to think about that, but it’s all about being responsible and caring for your loved ones even if something has happened to you.

Do you have life insurance? Why or why not? If you do, how much do you spend each year?

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. We do have life insurance. Mainly for protection for our family. If something was to happen we want the focus to be on dealing with the loss and not having to worry about money.

  2. Anyone with dependents absolutely needs life insurance. And, the younger they are, the more you need.

    The other important aspect of life insurance (I’m guessing this is the same in the US) is that it’s paid to the beneficiary directly so it doesn’t have to be dragged through a lot of estate related legal red tape before it can be used.

    Great point about co-signed loans, too.

  3. Amy @ DebtGal

    We got life insurance for my husband, a few months before our daughter was born. Since he earns the bulk of our income, it clearly made a lot of sense. We got it a few weeks before his 35th birthday, and the insurance agent told us that it was good timing, because the cost of a lot of plans increases at age 35. (I wish I could say that we planned it that way, but it was just dumb luck.)

  4. Janessa

    What about as a tax-free savings vehicle? Permanent life insurance can create a tax free shelter for your money to grow. Only if you overfund it though – before it becomes a MEC.

    1. Interesting thing to think about!

  5. Having an emergency file is such a great idea. We need to do that!

  6. Currently I do not have children, nor do I have a mortgage (we rent) so I haven’t thought about life insurance yet. That being said, similar to you, I recognize that it’s much cheaper to get insurance now so it might be worth us getting a policy now.

  7. Melissa @ Sunburnt Saver

    The only life insurance I have right now is through work and, since it’s only the two of us and my soon-to-be spouse also works, we haven’t thought too much of expanding it. I guess the only reason I haven’t made the leap yet is I don’t know if my life insurance would have to be used to pay off student debt. I know I’ve heard student debt is discharged upon death but… is that really true? I’d hate for my life insurance to go toward paying off my debt. Call me selfish, but it should go to family first!

    1. Hey Melissa,

      I also have student loans so I wondered about this myself. If you have only federal student loans (no private loans) and no one co-signed on them for you, then the government does cancel the loan upon death. If you have co-signers, then they would be responsible for the debt. If you have private loans, check the fine print. They usually specific who is responsible for the debt if something happens to you.

  8. Ugh! I think about this a lot but haven’t done anything about it. We have life insurance polices through our jobs but I don’t even know how much. The main reason I haven’t is because we don’t have kids but that isn’t the only reason to have it. I keep feeling like it might be just as good reason to have it.

    1. I know how you feel! We need to put more thought and effort into this as well.

  9. Brittney

    I completely agree with all your reasons for purchasing life insurance. We do not have children (yet), but we are married, just bought a home a year ago and have other financial obligations. We are young at the moment, 27 and 28, and we figured it would be cheaper to purchase it now while we are healthy. My mother was diagnosed with Type 1 Diabetes in her 40’s (yes, it’s very rare), but I don’t want to risk being diagnosed and not getting coverage or paying more.

    I have actually discussed this topic with co-workers as well. One of my co-workers finally purchased life insurance back in December because she has two children and wants to make sure they are taken care of. She is quite young (28 years old) and wasn’t sure if she needed it, but went ahead and purchased it. Unfortunately, in March, she was diagnosed with cervical cancer. She is receiving treatment now and will hopefully recover well, but if she had waited any longer to get life insurance, it would have been nearly impossible or very expensive to purchase it.

    1. I wish your co-worker all the best as she goes through treatment and her scenario is one of the prime examples on why purchasing life insurance early is so pertinent, especially if you have little ones. And you’re right, had she waited until after her diagnosis to apply she would not have been able to get the affordable rates she was offered.

  10. Zach Thalman

    You really never know when it will be your turn to go. Even though we aren’t supposed to think about when we die, it is important to prepare for it. I know I would like to provide for my family even after if I were to go. I had a friend who felt like he needed to take out life insurance and a few months later he ended up passing. Just with the life insurance, his wife and kids were able to be helped financially.

  11. Albert Strootman

    Life insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding.At first even i used to take the idea of life insurance lightly.I had done my insurance no doubt,but the corpus amount planned was too low.Then after certain incidents,i realised how important insurance can be to my family and renewed my term plan.Choosing an important plan is the most important part of the insurance.

  12. Life insurance! So important. My husband and I got it about a year ago and although I was resistant at first because we’re so young (and his career provides us with life insurance) the one that we have NEVER CHANGES in the premium, only increases in the coverage and we never have to do a health check! PLUS if you’re financially ready to pay for funeral costs when you’re older you can cash out this life insurance. I think it’s called Whole Life Insurance? It’s the best…ever. (VS Term Life Insurance – cheaper now but increases later). Nice post! I encourage everyone to get the life insurance like you suggested.

  13. I had no idea that to have someone co-sign on a loan you must have life insurance. I am applying for a loan for my first home, so I appreciate you sharing this point with me so that I can make sure I can qualify by having life insurance. Would it be best to find insurance through a broker or through my current provider?

  14. Life insurance is much more important than many people first think. Just asking yourself these great questions should help put things into perspective. Thanks!

  15. EmberJ

    I hadn’t thought about how someone who co-signs a loan with you would be left to pay your debt if you passed away. I don’t have any life insurance right now. I’ll have to look into finding an insurance agent so that everything is taken care of if I happen to pass away.

  16. Mike

    There are many more reasons to have life insurance. I won’t get into to all of them. Been around too long in this business to see all the misnomers. Age really has little to do with the need for life insurance. Not a reason to not have life insurance. Who is going to cover all responsibilities for the future, the expenses and income losses if the unthinkable occurs? What would happen if a business partner or key employee died? Terrible things happen unexpectedly to even very healthy people who were in the wrong place at the wrong time. Parents killed in a car wreck is not unusual. 40 year old women dying of breast cancer that was not caught under it had spread. My wife worked with a perfectly “healthy” woman a number of years ago who was a tiny young woman, with children. She was a breadwinner at her household being a senior finance manager and died of breast cancer at age 40. Healthy 35 year falls over dead while playing recreational basketball. If you are a senior, have you planned for the inevitable? How are you going to pay and make sure your loved ones aren’t financially burdened in their grief? This is real life stuff and can cause financial devestation. Some people are going to be statistics whether they believe it or not. It is just life. You can protect your loved ones and your business interest by putting the financial risk on a life insurance company to make sure death does not impact what is most important to you and those around you. If you have a family, you financially insure their well being even if you are no longer able to. Hope this was helpful to anyone on the fence to take action.