Do You Need Life Insurance? Here’s How to Find Out

This post is brought to you by PolicyMe, but all stories and opinions are my own.

Figuring out if you need life insurance is one of those boring-but-important questions that everyone should answer on a regular basis.

Think of it like an annual checkup, but with a twist: It’s much easier to figure out than you think, and ten times less painful than a trip to the dentist.

Plus unlike a lot of Big, Important Financial Decisions, whether or not you need life insurance boils down to answering some pretty straightforward questions that I guarantee you either know the answers to already, or can find out in under five minutes.

So since you’re here already, let’s just commit the ten minutes and get you on your way with a solid answer as to whether you need life insurance or not—and how to handle it if you need more.

Because sidebar, no one should ever tell you that you need life insurance without also talking to you about how much life insurance makes sense based on your personal situation, and that’s a hill I will die on. It’s why I’m such a fan of PolicyMe: When I spent a couple minutes using their tools to figure out if I needed more life insurance, they said no.

But back to you! Do you even need life insurance in the first place?

Are you single?

If you don’t know the answer to this, I can’t help you.

In all seriousness, there’s a reason this is such an important question when it comes to figuring out whether or not you need life insurance.

At its core, life insurance is designed to cover financial obligations that your loved ones would have to take care of if you weren’t around any more—and the biggest ones that you’re likely to have are with a partner.

Think of things like “We got a mortgage based on both of our incomes, and it’d be hard for my partner to stay in the house if I died.”

If you’re single, and no one would need to keep paying for your lifestyle if you weren’t around anymore, you likely don’t need life insurance—especially if you have some through work, or have some money in savings that would help your family cover end of life costs like a funeral.

Which yes, is heckin’ sad to think about! But if you frame it as a way to take care of your loved ones through a worst-case scenario, I find that helps a lot.

Do you have kids?

Whether or not you have a partner, if you have kids, you’ve definitely got someone who is dependent on you financially. Unless you’re in a really specific circumstance, if you have kids, you probably need life insurance.

This is the easiest, most no-brainer of them all. You should skip ahead to the last question, do not pass go, probably do not worry about the finer points here.

Can you and your partner live on either one of your incomes?

Just because you have a partner doesn’t automatically mean you need life insurance.

If you’re a dual-income partnership, you might have set up your lives so that you can comfortably live on either one of your incomes. If that’s the case for you, first of all, let’s just take a moment for a thousand high fives because you are doing really, really well. You go, Glen Coco.

If either one of you could easily handle all your shared financial commitments and still be in good shape on their own (which yes, means continuing to save for retirement and still being able to afford small joys like a latte) then you probably don’t need life insurance.

On the other hand, if this is a no—or a maybe not—you probably need life insurance.

Really, even if you have kids?

One thing that comes up in some cases is whether or not to have life insurance for a partner who takes care of kids full-time and doesn’t earn an income. I’ve never done this (I don’t have kids!) but I can confidently say that replacing the amount of work done by a full-time parent is going to Cost Money. That’s…. A lot of work.

So if you’re a single-income family with kids, or you’re looking at that as a possibility in the near future, think about the costs that would be involved to account for the (omg, deeply tragic) loss of the full-time parent. Trust me when I say that’s not nothing, especially if they give the single-income parent flexibility to work long hours or to travel at the drop of a hat.

Do you already have enough life insurance (or money)?

The thing is, needing life insurance isn’t the same as needing more life insurance.

So before you freak out that you need life insurance and need to buy it ASAP, it’s worth doing a checkup to see if you already have the life insurance you need.

Or, if you’re independently wealthy, if you have enough money already that insurance isn’t needed. As I’ve always said, it would confuse me greatly if this is true for you and you read my blog, but I’m also endlessly fascinated by you and please email me to tell me why you’re here.

Luckily, this checkup is the easiest checkup you’ll ever do—I know, because when I wanted to do my annual check, I pulled up PolicyMe on my couch and did the entire thing from my phone.

I know I need life insurance because

a) I have a partner, and

b) it would be tight to manage all of our current financial obligations on only one of our incomes.

Not impossible, for sure, and it wouldn’t spell financial ruin if one of us passed—but it would squeeze retirement savings and the survivor’s ability to relax about money. And to be clear, whoever was left would be very sad?! And maybe might not want to stress about money?! In the worst of cases?!

That’s enough for us to know we needed life insurance, which was true as soon as we bought a house together three years ago. We got term life insurance when that happened instead of mortgage life insurance, so as I did my checkup with PolicyMe, I included the coverage we already have.

And PolicyMe told me we had enough life insurance.

When a business that exists to sell me things tells me I don’t need a thing, I sit up and take notice. 

PolicyMe isn’t interested in heaping unneeded life insurance on people who are already covered, based on their financial situations—which I am, and I kind of knew that going in. (We probably went on the side of more-insurance-than-we-needed when we originally bought, and we both have good salaries and work coverage.)

Getting that confirmed was huge, both for my peace of mind and my trust with them. Plus, the entire thing took under five minutes as promised, and I did the entire thing from the comfort of my couch.

So what should you do if you need life insurance?

If reading this made you realize that you do need life insurance, don’t worry: you haven’t just added an expensive or time-consuming task to your financial to-do list.

You can use PolicyMe’s online insurance shopping tools to figure out whether your coverage is enough, how much you need, check out which companies are the best for life insurance, and compare quotes right away. Typically, term life insurance is going to be cheaper than you think it is, and you can start the process of getting it directly from whichever device you’re on right now.

Seriously.

And since “get life insurance” is the type of thing that tends to languish in the important-but-I’ll-do-it-later task list, that’s even more helpful. Do it now.