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Do I need life insurance?

Life insurance is necessary in more cases than you might think. Here’s how to understand when you need life insurance and the protection it can provide for your loved ones.

Mom and infant sit in the back of a truck

At some point in our lives, life insurance becomes a necessity, just like health and auto insurance. We have loved ones and responsibilities that life insurance helps us protect. But when is the right time?

I, for one, plan to live a long, healthy life. I imagine dropping my sons off at their first college dorm, traveling with my husband, and spoiling grandkids. But I also know that life has no guarantees, and I want to put some protection in place for my spouse and children if the worst were to happen. And the payout from a life insurance policy can assist with many cash needs that may arise upon death as well as provide support for those we love.

If you’re wondering whether or not you really need life insurance, you’re asking the right questions for your those you care about. To help you make the decision, consider these six cases where life insurance can make a huge positive impact.

When should you have life insurance?

You’re married

With marriage comes many shared responsibilities that often extend to our finances. Even if you don’t merge your finances with your spouse or have equal income, you may rely on your partner’s income to cover regular day-to-day expenses or longer-term financial plans you may have made together.

The payout from a life insurance policy can help your spouse have some financial comfort to navigate what would undoubtedly be a difficult time. And, yes, both of you should have a policy.

Fortunately, buying a policy is probably a lot more affordable than you think. A healthy 33-year-old man can purchase a 20-year, $600,000 Haven Term life insurance policy issued by MassMutual for about $33 per month.

You have kids

While growing your family is very rewarding, it doesn’t change the fact that raising kids is expensive. And it seems like the price keeps going up. The USDA estimates it costs $233,610 to raise a child in the US from birth through age 17. And, that’s not including expenses like IVF, hiring a lactation consultant, or sending your kids to college.

When you have kids, it becomes even more important to have life insurance. Having coverage in place helps your partner or the guardian of your kids to pay day-to-day expenses and can be put toward educational or college expenses (if that’s your intent.) Your life insurance policy is a financial safety net.

Regardless of their job status today, parents are wise to consider providing that safety net for their children. While most understand that working parents need life insurance to replace lost income, stay-at-home parents’ need for life insurance is often overlooked. Stay-at-home parents provide significant financial support to the family in the form of childcare and other duties. My husband is a stay-at-home dad, and when our oldest was born we discussed what coverage he might need. We chose a policy that would allow me to take some time off from work to heal with our kids, provide money for childcare once I was back at work, as well as help fund their college expenses. Stay-at-home parents, particularly with young kids, need life insurance.

A 29-year-old, non-smoking mom in excellent health can purchase a 30-year, $1 million Haven Term life insurance policy for as little as $48 per month, providing a layer of financial protection for her little one(s).

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You have a mortgage

A mortgage is a significant debt that does not go away when you die. Once you own a house, it’s a wise financial move to purchase at least enough coverage to pay the mortgage in full. It’s also worth considering property taxes, utilities, and other upkeep expenses while your beneficiaries determine whether to keep the house or prepare to sell it.

The national average mortgage balance is $201,811. You may want to consider purchasing a  policy with a coverage amount that could fully pay off the average mortgage, and thus significantly reduce monthly spending and financial stress for your family, can be very low cost.

You have privately funded co-signed debt

Did a parent or family member help you get the best rate on a loan by cosigning? A generous act on their part. But unless it’s a federal student loan that is forgiven on death, the full responsibility to repay this debt is almost certainly going to fall on your cosigner. Luckily, a life insurance policy can help provide the funds to help handle that debt. That way, you might not have to leave your loved ones stuck paying a bill that was really your responsibility.

A male 25-year-old recent grad in good health with co-signed private student loans can get a 30-year, $500,000 Haven Term life insurance policy for about $32 a month, which the loan cosigner, if he or she is the beneficiary of the policy, could use to help repay the loan if the individual that took out the loan passes away before it is paid off.

It’s not just easier life insurance, it’s an easier life.

Learn about the perks that come with being a Haven Term policyholder.

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Your elderly parents depend on you

We hear all the time how Americans have under-saved for retirement. And we see it in life as more parents move in with their kids or depend on them for financial support as they age. A close friend has his mother and mother-in-law living with him, and we’ve already discussed when my mom might move in with us. This is a huge responsibility for grown children, even if it comes with some benefits.

If your parent depends on you (or might in the future) to support him or her in retirement, the proceeds of a life insurance policy could be used to help cover living expenses or long-term care.

You own a business

Estate planning as an entrepreneur requires extra careful thought. How do you want your business to be handled after you’re gone? Will your children take it over or will a business partner buy out your shares? Is the business profitable enough to stay running profitably while preparing for a sale?

In addition to the financial benefits to your family, the payout from a life insurance policy can provide your beneficiaries with a cash buffer while they make arrangements for your business. If you pass away suddenly, life insurance proceeds might help with business interruptions or unexpected expenses.

Policies with coverage amounts that could be used for family or your business in the event of your death can still be cost-effective. For instance, a 43-year-old female entrepreneur in excellent health is quoted $88 per month for a 20-year, $1.5 million Haven Term life insurance policy.

When it comes to life insurance, it pays to take action as soon as possible. Not only are your rates lower when you’re younger, but you don’t want to end up needing coverage while you’re still thinking, “I’ll do it tomorrow.” Luckily, you can get an instant quote for term life insurance from Haven Life today.

Life insurance needs aren't one-size-fits-all.

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Chelsea Brennan is the founder of Smart Money Mamas, a personal finance blog that focuses on family finance, investing, and reducing money stress. Chelsea is an ex-hedge fund investor whose work has appeared in a wide array of publications, including Forbes, Business Insider, and more.

The information provided is not written or intended as specific tax or legal advice. Haven Life Insurance Agency does not provide tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

Adam Weinberg

About Adam Weinberg

Adam Weinberg is the Brand Director for Haven Life, where he’s working hard to make life insurance easy. Adam is a creative problem solver who uses unique brand moments to create meaningful customer experiences.  Adam has more than a decade of diverse editorial, marketing, and branding experience, including work on several award-winning campaigns for various digital media companies.

Read more by Adam Weinberg

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

Our disclosures

Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.

Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus.html

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