When To Get Life Insurance: A Complete Guide

Everyone needs life insurance, even you. It’s easy to tell yourself that you don’t need it yet if you’re young, healthy, or don’t have any dependents or major financial responsibilities. But none of those things mean that you don’t need health insurance. In fact, they mean you need it!

Getting the right life insurance policy is a critical part of building net worth and securing your financial future, even if you don’t think you need it yet. There are benefits to getting life insurance before you think you need it, and having life insurance over a longer period of time can help you establish greater financial security and stability than waiting to get it after you have a definite need. Additionally, purchasing a life insurance policy earlier can prevent you from experiencing a higher premium later. 

This blog will tell you six situations when you should really think about getting life insurance, and some of the reasons why. 

When Should You Get Life Insurance?

When you buy a car, you need auto insurance. If you rent or buy a house, you need renter or homeowner’s insurance. If you aren’t secretly a superhero who never gets sick or injured, you need to have medical insurance. Life insurance is no different. 

One of the best ways to be prepared financially for the future is by having life insurance. It isn’t something you can prepare for entirely. But you can prepare partially, by having a fund to help your loved ones pay for any expenses caused by your passing and any debts left behind. Having a life insurance policy is one way to leave a legacy of comfort and financial stability behind for the people that you care about, who depend on you. 

But when exactly do you need to get life insurance? Let’s look at a few common situations when a life insurance policy can help you create greater financial stability. 

1. Get Life Insurance When People Depend on You

If anyone depends on you for financial care, you need life insurance. This can be anyone at all. You may have children or a spouse who relies on your earnings. You might also have elderly parents, very young siblings, or a disabled family member who needs special assistance or long-term care. 

If you have someone in your life who needs you to pay any of their bills at all—in other words, if you have any dependents—then you need to have life insurance. Life insurance ensures that those bills will still be paid if you’re suddenly not there to pay them. These can be essential resources in your plan to keep protecting and providing for the people that you love even after you’re gone. 

2. Get Life Insurance When You’re Building a Life With Someone

If you’re thinking about getting married and building a life with someone, you should also really think about getting life insurance. This is doubly true if that new life you’re building includes bringing dependents (meaning, children) into the relationship. 

Not only should you get life insurance, but your spouse or partner should, too. It might seem like a difficult conversation to have, but one of the most important parts of a long-term relationship is building a financial life together. You have to talk about these things. Topics like how much money each person earns, how long each person intends to work until they retire, and how much life insurance coverage is appropriate for you to carry individually should all be discussed relatively early in the relationship.  

Even if your partner or spouse is planning on staying home while you work (or vice versa), there needs to be a life insurance conversation at some point. If you have a two-income household, life insurance can protect you against the sudden loss of one salary. If you have a one-income household, life insurance can help the living partner pay for child care, cover education expenses, pay off a mortgage on a house, or even cover the expenses necessary for transitioning into full-time work if they need to. 

3. Get Life Insurance When You Don’t Have Funeral Plans

Speaking of difficult conversations, asking around to see who’s going to pay for your funeral is probably not at the top of your priority list.  If you don’t already have a plan for those expenses, getting life insurance can remove a lot of the awkwardness from that conversation when you do have to have it. 

Instead of asking who is going to pay for your funeral, you can simply make it clear that you’ve prepared for those inevitable final expenses by purchasing a life insurance policy that will cover it. It’s something you can do for your loved ones that will express your care for them even after you’re no longer here. 

4. Get Life Insurance if You Like Taking Risks

First, let’s clarify—life insurance is not the risk we’re talking about here. It’s a way of protecting from risks. Specifically, life insurance can protect your loved ones in the worst-case scenarios associated with lifestyle risks. That’s why if you have a dangerous job or enjoy really extreme and dangerous hobbies, it’s a good idea to have a life insurance policy. 

For example, if you work as a pilot, a firefighter, a police officer, or on an oil rig, your job is much riskier than someone who works at a desk every day. Generally speaking, these types of jobs have group life insurance policies due to their level of risk, but they may not offer enough coverage for all of your beneficiary’s needs in the worst-case scenario (ideally your life insurance benefit should cover 10 times the amount of your annual salary).

A personal policy can be purchased for the amount of coverage that you decide, which provides a level of control. Many personal policies also have added benefits that a corporate policy doesn’t offer. It’s always a good idea to check and be sure that you’re covered in the best possible way for your lifestyle. 

Similarly, if you enjoy high-risk hobbies like skydiving, bungee jumping, extreme snorkeling, or some other thrill-seeking activity, you should really get life insurance. Part of the fun of these hobbies is the thrill of avoiding death. While no one likes to think of it, if the worst should happen you’ll want to make sure that your loved ones are covered. 

5. Get Life Insurance When You Own a Small Business

Owning a business can create a lot of loose ends that will need tying up if the unthinkable happens. Life insurance can cover not only your personal death expenses but also some expenses incurred by having to close or transition a business that may be tough for your personal network to handle on their own. 

While there are life insurance policies available specifically for business owners and businesses, even a personal whole life insurance policy can be a great safety net. This is not only because of the death benefit payout but because whole life insurance policies have a living benefit in the form of cash value. 

The cash value of a life insurance policy can be a very valuable asset to a small business holder because it’s a way to store capital while you build your business. Once the cash value has accrued enough, you can even take a tax-free loan on it to build up your business if you want to. 

6. Get Life Insurance When You Don’t Have a Good Reason Not To     

Still not convinced? We understand. Even though there are a lot of times when it seems like getting life insurance would be a good idea, it can be easy to think of reasons not to take this necessary step in building financial security. But are they good reasons? 

If getting life insurance has crossed your mind, try not to talk yourself out of it. A lot of the reasons people think of putting off getting life insurance are actually good reasons to sign up for a policy. If you say any of the following things to yourself, you should still get life insurance–here are the reasons why. 

I’m Too Young To Need Life Insurance

Believe it or not, the best time to get this type of insurance is when you’re young. It’s easier to get an affordable, high-value permanent or universal life insurance policy when you have a lifetime ahead of you to pay premiums. A young person can pay their premiums over a longer amount of time, accrue a higher cash value, and reap the benefits of the potential investment returns on that cash value for a longer amount of time. 

A term policy is also more affordable for a younger, healthier person. Term insurance policies are only valid for an agreed-upon number of years (usually between 10 and 30 years), so they don’t accrue cash value. 

However, if your main goal in getting a life insurance policy is to provide an emergency safety net for your loved ones if something happens to you, a term policy is a good option. Term policy premiums are often much less costly than whole life premiums are. The younger you are, the lower the premiums are, so when you want to make an investment in your family’s safety and security on a limited budget, use this option. You could pay less than $20 per month for a 20-year term life insurance policy, which seems like a low price to pay for a safety net.

Generally speaking, don’t let youth stop you from setting good financial foundations for yourself and your family. Life insurance is something that can have a bigger impact and benefit when you own it for a longer time. That means starting as early as you can so that when you’re older it can provide you with peace of mind and your loved ones with an extra measure of financial security. 

I’m Too Healthy To Need Life Insurance!

Nobody is “too healthy” for life insurance. Here’s why: will you always be healthy? Just like with youth, it’s much easier and more cost-effective to get a life insurance policy when you’re at the peak of health than it is when you start to realize that health naturally declines with age.

There’s also a cost element to consider. Just as policy premiums are more affordable for younger people, they’re also more affordable for healthier people. If you choose a term policy, you’ll need to do a health check as part of the process of determining how much your life insurance will cost you. Healthier people cost less to insure so signing up for term life insurance when you’re at the peak of health will save you some cash in the long run. 

Even if you’re healthy now and stay that way, a whole life policy can provide an unexpected safety net through its living benefit. Don’t forget that with a whole life insurance policy, you can take withdrawals from the cash value that you build up over the life of the policy as backup emergency finances if you have a medical emergency of some sort. 

Basically, being healthy isn’t a good reason to not get life insurance. In fact, it’s a great reason to get the best possible life insurance that you can, so that you and your loved ones are better-taken care of later and have more options if you need care.

I Don’t Have a Spouse, Partner or Kids

You might be flying solo now—but is that something that could change in the future? If your plans for life include living with a partner, getting married, or having children, you should start getting ready for them as soon as possible. Being responsible for a family includes trying to guarantee your loved ones’ financial security. This can include purchasing life insurance so that when your life does include a family that depends on you, you’re well-prepared to take care of them in any situation. 

Even if you plan on staying single, it’s still good to be prepared in case you meet someone who tempts you to change your mind. We can’t overemphasize the importance of financial preparation for serious relationships and marriage. You might want to take a look at a potential partnership agreement to see some of the other things you should keep in mind even when you’re single, including life insurance obligations.

I Don’t Have Any Dependents—and I Don’t Want Them

Some people prefer to live more independent lives and that’s perfectly understandable. But no man is an island. Even if you’re not actively seeking out or creating people who might eventually depend on you for financial help, that doesn’t mean you don’t already have connections that do.

For example, do you have elderly parents that sometimes look to you for support? Do you have a much younger sibling that still needs care and help from the family from time to time? Before you decide that it isn’t time to get life insurance yet, it might be a good idea to think carefully about the connections that you already have in life. If you can think of anyone at all who turns to you for emergency support or sees you as their first port of call if they need financial help, a life insurance policy might be a good idea.   

So When Should You Get Life Insurance?

To recap, you should get life insurance even if you think you don’t need it. Young people need life insurance. Healthy people need it, too. Risk-takers, parents, married people, and business owners—all of these people need life insurance. Even if you’re single, you should still think of getting health insurance. 

It's never too early to start thinking about a life insurance plan. The younger you are, the more likely it is that you'll qualify for lower premiums—especially if you're in excellent health. 

The application process for many of the best life insurance companies often requires a medical exam, and the results significantly affect your life insurance quotes and estimates. Term life policies or permanent life insurance policies set you up for long-term success with the best life insurance rates for signers. 

Although many young people struggling with private student loans, outstanding debts from credit cards, and a low annual income may procrastinate to purchasing term life coverage (or any other type of life insurance), the lower life insurance cost is well worth it in the long run. 

If you can think of anyone at all who relies on you for their financial needs at any time, or if you hope to have relationships like this in the future, you should have life insurance to provide a safety net for them and increase your peace of mind. When in doubt, talk to your financial advisor or financial planners and see which type of policy is right for you.


 Five reasons to buy life insurance young | Cooperators

8 smart steps for buying life insurance | III

At What Age Should You Buy Life Insurance? | The Balance

Here's why you should buy life insurance in your 20s or 30s | CNBC 

7 Reasons You May Need Life Insurance, Even If You Think You Don't | Business Insider 

Best Age to Get Life Insurance | Investopedia

Pros and Cons of Group Life Insurance Through Work | Nerd Wallet