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Life insurance can seem complicated, and with all of the policy options available, it can be difficult to determine what type of policy you need – or if you need one at all.  While auto insurance comes with a new car purchase and homeowner’s insurance comes with a new home, you might be wondering when (or if) you need to get life insurance.

From weddings to funerals, welcoming a new family member, or even starting a small business, we’re sharing some of the common life events and situations that can help you determine if you need life insurance.

Determining if you need life insurance

One simple way to determine if you need life insurance is to think about any significant life events that are cause for celebration or would trigger a major shift in your daily life.

You will first want to review your financial responsibilities. If you have loved ones who depend on your income, you own a small business, or you carry any debt that would affect those you leave behind, you definitely need life insurance. If you were to pass away tomorrow, would your loved ones be able to pay the bills? If you are unsure, or you know they would face financial difficulty, you need life insurance.

If you are single or would not leave behind any significant debt (including a sizable estate or student loan debt you co-signed with a loved one) life insurance can still help you achieve your financial goals. If you’re interested in building retirement savings, an annuity can help you start saving now, building tax-deferred funds over the years that you can cash out at a time you choose. If you plan to have children or purchase a home later in life, a permanent life insurance policy offers tax-deferred savings and offers financial protection that can set your children up for success later in life if needed, and if not, the policy can simply work for you as a savings vehicle.

Planning ahead is an important part of life insurance; even if you don’t think you need it now, it’s important to consider your goals and plans for the future. Securing coverage while you’re young and healthy means you get the most affordable rates and you can begin building cash savings now rather than later in life, taking a proactive step towards a financially secure future.

life insurance flowchart quility

Life events that can trigger a need for life insurance

There are several major life events that can trigger a need for a new life insurance policy or an update of your current coverage.

Life changes that trigger a need for life insurance:

  • Getting married
  • Buying a home
  • Giving birth or adopting a child 
  • Getting a divorce

All of these events affect your financial plans; therefore, you’ll want to take a look at your life insurance coverage as well. If you are purchasing a new home, you may want to consider adding customized coverage such as mortgage protection insurance, which would provide a death benefit in the amount of your outstanding mortgage to ensure your loved ones could stay in the family home.

If you only need coverage for a certain life stage, you may consider purchasing a term life insurance policy that would provide coverage for 10-30 years. Term life can help you gain peace of mind knowing your loved ones would be financially protected if something happened to you during that time.

Life insurance through your employer

If you already have life insurance through your employer, you are off to a great start! However, this coverage is usually not enough to provide for your loved ones if you were to pass away. A personal life insurance policy can be customized to provide the full amount of financial protection your family needs, while an employer-sponsored plan usually only provides a payout equivalent to one or two times your annual salary.

Even more, you can usually get a better premium price (and more coverage) when you purchase a policy on your own. This also allows you to have full control of your policy if you want to make changes to your coverage – or switch employers – later on.

How to choose a policy

For most people, a term life insurance policy provides the comprehensive and affordable coverage they need. Term life is a great choice for younger individuals, new parents, and those who don’t need more complex coverage that would require a medical exam.

If you want coverage that lasts a lifetime rather than a period of 10-30 years, a permanent life insurance policy will be a better fit. Permanent life insurance is generally more expensive than term life, but your coverage will not expire, and you will have access to certain benefits, such as a cash value component that grows tax free while your policy is in force.

Rates for life insurance are most affordable when you get coverage while you’re young and healthy, so it’s important to get a policy in place sooner rather than later.

Learn more about life insurance with our Life Insurance Guide
Want to learn more about life insurance? Our Life Insurance Guide covers everything you need to know about how life insurance works, the basics of beneficiaries, how to choose a policy, and more.

Apply online for life insurance today

If you are interested in term life insurance, our online application takes less than ten minutes to complete.

And if you want to learn more about your options, a Quility advisor stands ready to help you find the best coverage for your budget and goals. Our advisors are available via virtual consultation to help you determine which type of life insurance is best for you.

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Disclosure

The rates shown are based on past examples of quotes provided to people based on their demographic information. These are examples of the kinds of rates you can expect. All life insurance quotes and approvals are based on age and overall health at the time of purchase. Generally, non-smokers in good health will get the most affordable life insurance rates.

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Disclosure

The samples shown above are real numbers from past Debt Free Life clients. They are examples of the types of quotes you can expect but are presented for example only.

To get your real rate, fill out our short form.

Disclosure

The rates shown are based on past examples of quotes provided to people based on their demographic information. These are examples of the kinds of rates you can expect. All life insurance quotes and approvals are based on age and overall health at the time of purchase. Generally, non-smokers in good health will get the most affordable life insurance rates.

To get your real rate, fill out our short form.

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