Is life insurance worth it?

Life insurance is a secure and valuable way to provide financial protection for your loved ones in the event of your death. In exchange for a monthly to a life insurance provider (often discounted if paid annually), your beneficiaries receive a pre-determined sum of money after you have died. The amount of money can range from tens of thousands of dollars to millions, depending on a series of factors.

The benefits of having a life insurance policy are multiple – but is it worth it? Or will you wind up paying for something you never use?

If you’re in the market for life insurance then consider getting a free online price quote now so you know exactly what to expect.

Is life insurance worth it?

Here are five factors to consider when trying to gauge whether life insurance is worth the price tag.

Your dependents

Many people are interdependent. If you’re married, have school-age children, have a mortgage or are generally relied on financially you should consider life insurance. Think about the bills and expenses you have and the money you make. Now take yourself out of the equation. If there are no (or limited) alternatives for your dependents to make ends meet in your absence then you would benefit from having a life insurance policy.

It’s easy to get started. Start by getting a free online price estimate here now. 

However, if you’re single and living alone with no spouse or children? Then you may not need life insurance. Life insurance is generally beneficial to fill the economic gaps caused by someone’s death. If you are not financially supporting anyone besides yourself then life insurance may not be worth it.

Your financial situation

For most people, finances are tied to their careers, their investments and the equity they may have in their homes. Many Americans do not have the equivalent amount a life insurance policy provides stashed away in a savings account. For these people (the vast majority of American adults) a life insurance policy makes sense. They may risk never using it but the disadvantages of not having one usually outweigh the relatively inexpensive costs of purchasing and keeping a policy.

What if people are dependent on you but you already have a substantial amount of money to leave them should you die? Perhaps you’ve inherited a significant sum or are considerably well off financially. Then you probably can afford to skip life insurance. If not, however, then consider getting started now – before costs rise and coverage is limited.

Your age

If you’re young with a new family you’ll want life insurance to protect you. If you have years (if not decades) of career earnings in front of you then life insurance makes sense. You need time to build up savings, investments and equity in your property. If your life and earning ability ends prematurely then life insurance can adequately fill the gap.

Older people, however, may not always benefit from taking out a life insurance policy. They’re likely to be more financially secure and have fewer people depending on them. Life insurance for older adults is also generally expensive relative to the amount of coverage that could be secured. There are, however, some seniors who would benefit from securing a life insurance policy and it can be secured with or without the traditional medical exam. 

Not sure if a policy makes sense for you? Get a free price quote here now to see what it would cost. 

Your budget

Different life insurance types come with different costs. A whole life insurance policy has a cash value that’s generally more appealing than a term life insurance plan. But term life insurance is cheaper. Put aside what you want, for the moment, and do a realistic appraisal of what you can afford. A life insurance policy that you can’t pay to keep long-term is not worth it. But a policy that offers cost-effective protection likely is. Remember this as you review offers and policy options. 

Your goals

For some people, life insurance may be less about providing protection and more about meeting a financial goal. Perhaps you’ll never be able to save up the equivalent amount that a life insurance policy offers – but you can afford to pay the premium for a policy in that amount. Then it may make sense to secure an insurance plan now.

Or maybe you want just enough to cover expenses in the event of your death (e.g. funeral and cemetery services). Then you may be able to qualify for an inexpensive plan that will provide enough money to do just that.

It’s important to first know what you want your policy to accomplish. By knowing that you’ll then be able to back into the most valuable plan for your budget and your goals. In short: If a life insurance plan can meet your goals then it’s probably worth pursuing.

How to determine if you need life insurance

There are a variety of factors that can help you determine when you need life insurance, how much you need, and how much you should pay. Ultimately, the final decision is yours based on your personal financial situation and preferences. 

Many financial advisers recommend having at least some form of life insurance. If you don’t have life insurance or want to overhaul what you do have, now is a good time to act. Get a free online price estimate today. Or use the table below to start comparing some top life insurance providers.