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Who Needs Life Insurance Most?

Life insurance isn’t about expecting the worst, it's about protecting the people and commitments that matter most. People who typically need life insurance most are those whose income, caregiving or financial responsibilities support others. This often includes parents, primary income earners, homeowners with a mortgage, caregivers and people with shared debt. 

It's also a decision many people put off, often because they're unsure whether coverage is necessary at their current stage of life. If you’re unsure how life insurance applies to everyday life, it may help to explore the six key benefits of life insurance, which explain how coverage can protect goals, debts, dependents and long-term plans. Read on to learn who typically benefits from coverage the most and who might be comfortable waiting until later.

Who should get life insurance?

Life insurance can be more relevant in certain situations. The groups below often play a central role in supporting their household. 

Parents of young children

Raising children involves ongoing expenses – some predictable, others not. If a parent passes away unexpectedly, the combination of lost income and increased child care needs can be overwhelming for the surviving family.

Life insurance may help by providing financial support for ongoing family expenses, such as:

  • Everyday household costs including groceries, health care, clothing, school supplies or extracurricular activities.
  • Long-term goals, like saving for college tuition, first cars, milestone events or even emergency funds.

Sole income earners

If you’re the primary, or only, source of income in your household, your paycheck may cover housing, utilities, groceries, transportation, medical expenses, insurance premiums and more. Without that income, essential expenses may become difficult to manage.

Life insurance may help replace lost earnings needed for:

  • A safety net that allows dependents to stay afloat, maintaining necessary expenses without sudden financial strain.
  • Protection for your home, helping your spouse, partner or children continue mortgage or rent payments.

Homeowners with a mortgage

A home is often both a family’s largest asset and biggest financial responsibility. Mortgage payments, property taxes, insurance and maintenance can be substantial. These costs typically continue regardless of changes in household income. 

Life insurance may help support housing-related obligations, such as:

  • Continuing mortgage payments to help keep the home.
  • Covering property-related costs, including taxes or homeowners insurance.

Stay-at-home parents and caregivers

Stay-at-home parents and caregivers provide daily support from child care and transportation to household management and elder care. Replacing this unpaid support can create new and ongoing expenses.

If a caregiver were no longer present:

  • Paid child care, elder care or supervision services may be needed.
  • Transportation, tutoring, home management and household tasks may require outside assistance.

Adults with co-signed or shared debts

Many people assume that debts disappear if a borrower passes away, but that’s not always the case. If you share or co-sign loans with parents, partners, friends or business associates, repayment may still be required.

Shared debt can include:

  • Private student loans
  • Auto loans
  • Credit card balances
  • Business loans or personal loans 

Life insurance may help address shared financial obligations, such as:

  • Preventing shared debt from becoming a financial burden for a co-signer.
  • Protecting partners or family members involved in joint purchases or business ventures.

People who may not need life insurance right away

Life insurance may be less urgent for people who have few financial responsibilities or dependents. In these situations, coverage is often a lower priority, though needs can change over time.

Singles without dependents or debts

If you’re single, financially independent, and not responsible for anyone else, your need for life insurance is generally lower. You may not feel urgency – and that’s reasonable. In some cases, people choose to explore coverage early because:

  • Rates are often lower at younger ages.
  • Coverage may be easier to qualify for before health changes.
  • You may have long-term plans that would create a need for coverage in the future, like buying a home or starting a family.

Retirees with significant assets

Retirees who have paid off their mortgage, built savings and whose children are financially independent often no longer need coverage for income replacement. In some situations, life insurance can still play a meaningful role in:

  • Providing financial support for a spouse or partner.
  • Leaving a legacy for children, grandchildren or charities

Whether coverage is relevant often depends on personal goals and existing financial resources.

Once you’ve recognized your own needs, the next step is understanding timing, like when to get life insurance, how to match it to your life stage and what type of life insurance to get – term or permanent. Coverage is most effective when aligned with the responsibilities you carry today and those you anticipate tomorrow.

FAQs about who needs life insurance

Purchasing life insurance while young and healthy can mean securing lower rates and easier eligibility. If you expect to have children, buy a home, start a business or take on shared debts later, purchasing coverage earlier may help prepare for those future responsibilities.

It depends. Employer policies are helpful, but they’re often limited. Most provide coverage equal to one or two years of salary, far less than the typical needs of a family. Employer coverage usually ends when you leave your job, potentially leaving you without protection or facing high costs if you choose to continue the coverage after departing from your employer.

It may be worth considering if you share financial responsibilities like rent, a mortgage or joint debts. If you plan on starting a family, securing coverage at a younger age and in good health can be advantageous. Coverage offers protection for both partners against unexpected financial challenges as shared commitments increase.

Securing coverage before major life events can mean lower premiums while you're young and healthy, and ensures protection is in place before you assume new responsibilities like child care or education planning.

ALIC19926 Jan-28