Do I need life insurance?

Life insurance is a great financial tool that anyone can use. For as little as $132/year, you could provide a financial cushion for your loved ones or leave behind a large donation to one of your favorite institutions. The type of policy you'll need will depend upon what you hope to accomplish with it. Whole life and term policies each come with their own unique set of benefits, but you can shop online to compare quotes and find the best policy for you.

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Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Dec 28, 2021

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The Rundown

  • Life insurance is a financial tool that can be used by anyone
  • You can designate a person or an institution as your beneficiary
  • You can compare life insurance quotes online

It might seem strange to think that you should buy life insurance if you are not married with children, but affordable life insurance is a tool that anyone can, and should, utilize.

With life insurance, you can provide an immense benefit to the people and institutions you care about after you pass on. But is life insurance really worth the initial investment? Well, what life insurance can do for you and your loved ones might be more than you expected.

Shopping for life insurance is also very easy these days. If you want to leave behind a legacy — once you pass on — or simply ensure that those you love are well taken care of, you can get life insurance quotes online within minutes.

In fact, when you enter your ZIP code, you can start comparing free quotes from life insurance companies near you right away.

When considering who needs life insurance, first you should be able to answer the question, “What is life insurance?”

Life insurance is a financial product provided by a life insurance company to an insured individual. The insurance company promises to pay out a certain amount of money upon the insured individual’s time of death as long as all the monthly or yearly payments have been made.

Most insurance companies offer a wide range of coverage amounts from which to choose. Now that you know what life insurance is, you should consider if anyone in your life would be negatively impacted in a financial sense if you were to die unexpectedly.

For example, if you have a spouse who works, children, and a pet, finding a life insurance company to work with should be high on your list. This tends to surprise many homemakers, but without your important contributions to the household, your spouse will need assistance with some or all of these vital chores:

  • Child care
  • Cooking
  • Cleaning
  • Pet care
  • Tutoring
  • Mortgage payments
  • Utility payments

There are, of course, a multitude of other areas of family life that a death benefit could assist with, not to mention funeral expenses or setting aside money for college.

Of course, a spouse who is the primary source of financial security should also make sure to purchase a life insurance policy. This step ensures that if something tragic were to happen, the remaining spouse would have a financial cushion.

You should also consider buying life insurance if you are a partner in a business venture or have outstanding debts like a car payment. This way, if anyone cosigned on a car loan with you, the death benefit from your policy would help them shoulder that financial burden.

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Is life insurance only for married people?

While married people commonly purchase life insurance, it is a misconception that life insurance is only for people who are married or have children. When you purchase life insurance, you can designate your death benefit to be awarded to whomever you desire.

Life insurance is a wonderful tool that can allow you to make an incredible contribution to a cause you feel passionate about, provide support for an institution, like your public library for example, or even to a close friend.

When naming a beneficiary on your policy, you can even split the death benefit between multiple people. With life insurance, you can give back in ways that you may never have thought possible.

What kind of life insurance should I buy?

Life insurance can be broken down into two main types: whole life insurance and term life insurance.

Whole life insurance, as stated by the Insurance Information Institute, is a type of policy that lasts as long as the policy owner continues making payments. Term life insurance, on the other hand, is only active for a certain number of years.

This is the defining difference between these policy types, but you should always take a closer look at what makes these policy types unique.

Whole Life Insurance

Whole life insurance can provide you with any number of benefits. For example, if you own a whole life policy but are in desperate need of cash, you can actually turn to your policy for assistance.

This is because a whole life insurance policy builds cash value. This cash value, while intended to be added to the death benefit, can be used at any time and for any reason. If needed, you can take out a loan from the policy and use it as you see fit.

Whole life insurance is also a great way to leave a tax-free benefit behind for your loved ones. While the premiums you pay can’t be deducted from your taxes, the death benefit that your beneficiaries receive will most likely be exempt from any federal income taxes.

Bear in mind that if there is interest that has accrued on top of the death benefit, it will be subject to taxation.

Since the financial strength of a whole life insurance policy tends to grow throughout the years, many adults purchase these types of policies for children.

Rates for children tend to be incredibly affordable, and when they take over control of the policy the rates remain the same as when it was first purchased.

Term Life Insurance

Since term life insurance only lasts for a certain time and can be much more affordable than whole life insurance, parents with young children usually benefit from this type of policy.

But term life insurance policies also offer their own forms of flexibility. When shopping for term life insurance, you can choose from the following options:

  • Level-premium policies
  • Yearly renewable term (YRT) policies
  • Decreasing term policies

A level-premium policy provides anywhere between 10 to 30 years of coverage and, during those years, the death benefit and rate are fixed.

YRT policies, on the other hand, do not have a specified term. These policies can be renewed every year without undergoing medical exams. However, you should remember that, as you age, the rates for these policies will increase.

Now, the death benefit of a decreasing term policy, as hinted at in the name, decreases over time. In fact, it diminishes every year, but the rates remain fixed. These types of policies are typically purchased to work with a mortgage; the coverage tends to match the principal left on the home loan.

How much does life insurance cost?

The rates for both whole and term life insurance will differ. These variations are usually a result of your age at the time of purchase, your health, your desired coverage amount, and the type of policy.

Since whole life insurance policies last until you die and build up cash value, they typically come with higher monthly payments than a term life insurance policy, which will only run for a certain number of years and doesn’t build up any cash value.

In the chart below, you can examine the life insurance rates offered by some of the best life insurance companies in the business:

Top 7 Life Insurance Companies' Sample Annual Rates by Age, Gender, and Marital Status

Age, Gender, and Marital StatusNew York Life Average Annual RatesLincoln National Average Annual RatesPrudential Financial Average Annual RatesMassMutual Average Annual RatesAegon/Transamerica Average Annual RatesJohn Hancock Average Annual RatesState Farm Average Annual RatesAverage Average Annual Rates
Single 25-Year-Old Female$158.00$187.00$195.00$132.00$164.00$172.50$143.00$144.07
Single 25-Year-Old Male$152.00$231.00$237.00$147.00$176.00$178.30$164.00$160.19
Married 45-Year-Old Female$262.00$239.00$314.00$209.00$229.00$241.50$238.00$213.50
Married 45-Year-Old Male$245.00$283.00$378.00$230.00$255.00$292.10$239.00$240.44
Single 65-Year-Old Female$924.00$903.00$941.00$763.00$1,139.00$937.30$684.00$801.04
Single 65-Year-Old Male$1,416.00$1,577.00$1,412.00$1,049.00$1,367.00$1,380.00$955.00$1,171.57
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Keeping life insurance rates low can be achieved by buying life insurance at a young age, staying in good shape, and eating healthy. The healthier you are when applying for insurance will help secure you a better rate because an insurance company will see you as a low-risk client.

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Who Needs Life Insurance: The Bottom Line

Anyone who wants to provide for loved ones, be they blood-related or not, or wants to donate a large contribution to a cause they are passionate about, should consider life insurance.

The type of life insurance you purchase will of course depend upon what you want it to do. If you’re a parent who wants to provide for a child’s future, buying a whole life insurance policy for that child could be a wise step.

If you’re an older individual who wants to ensure that your family doesn’t need to worry about paying funeral expenses, a term life insurance policy could be the best option for you.

Essentially, life insurance is a great tool that can be customized to fit your needs.

Don’t wait to find a great policy; enter your ZIP code and obtain free life insurance quotes today.

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