If you answer yes to these 2 questions, you need life insurance
Each time you incur a new expense, you have less money left over for another expense. This is just one of the reasons why you may be hesitant to apply life insurance.
Although life insurance is an important thing to have, there is a cost involved. Now, that cost can vary depending on the type of insurance you choose to buy and the amount of coverage you have. A life insurance policy with a $2 million death benefit is likely to cost more than a policy with a $600,000 benefit, all else being equal.
Plus, there are steps you can take to make life insurance more affordable. These include working on improving your health and opting for term life insurance instead of paying for a whole life insurance policy.
Either way, if you’re unsure about life insurance, there’s an easy way to figure out if buying a policy is worth it. Just go through these two questions, and if either is yes, that means you need to apply for coverage ASAP.
1. Are there people in my life who depend on me financially?
If there are people you support financially, then you definitely need life insurance. It does not matter whether these people are your spouse, your children, your siblings or your parents. If someone were to be left behind financially when you die, that alone justifies life insurance.
That said, the answer to this question might not be as simple as you think. If you have children and a non-working spouse, the answer may be obvious. But what if you’re single with no dependents, but you have a sibling who lives under your roof, a roof you pay for? In this case, you could be arguing that your sibling is dependent on you financially and you should have coverage in place so that they are protected in case something serious happens to you.
2. Are there people in my life who could suffer financial harm if I die?
This may seem like a repeat of the question above, but it’s not. The question above asks if you are supporting someone financially. If you are a stay-at-home parent, you cannot provide financial support to any member of your family. But that doesn’t mean your family wouldn’t be financially affected if you died.
If this were to happen, your surviving spouse may struggle to pay babysitting — and could therefore suffer their income. Or, your spouse might incur the cost of a nanny or housekeeper to make up for the many chores you’re no longer around to do. This alone justifies life insurance.
Make the right call
It’s easy to assume that you’re too young to need life insurance or that you don’t need a policy just because you don’t have kids. In reality, there are many different scenarios where life insurance becomes necessary. If you don’t know what to do, ask these simple questions. And if you answer yes to just one, consider upgrading to an app.
The best credit card cancels interest
If you have credit card debt, transfer it to this top balance transfer card can let you pay 0% interest for 18 months! It’s one of the reasons why our experts rank this card among the best for helping you control your debt. This will allow you to pay 0% interest on balance transfers and new purchases during the promotional period, and you will not pay any annual fee.
Read our full review for free and apply in just two minutes.
We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.