Does everyone need life insurance?  Maybe.  If anyone would be impacted by your demise, then you probably do need coverage.  If nobody would be affected, then you probably don’t.

If you’re the breadwinner, life insurance is meant to protect your family from financial catastrophe in case you die.  Life insurance should cover your expenses for home, loans, or any other financial obligation.  The family will need time and money to get back on their feet after the breadwinner dies.  There are other reasons you might need life insurance but being a breadwinner is the top of the list.

If you’re single, then perhaps you don’t need life insurance.  If you have enough money saved to cover your obligations and final expenses, then you probably don’t need life insurance.  Or, perhaps your children are all grown and you can “self-insure” yourself and your spouse.  You may not need a policy either.  But, if you have a young growing family, then you probably need to buy life insurance.

There are a few different types of policies you can get.  My recommendation is term insurance.  It’s exactly what it sounds like, life insurance for a set period of time.  It could be 5, 10, 20 years, or some time period in between.  Why would you buy this kind of insurance?  First, it’s a lot less expensive for more coverage. It only pays out if you die.  But, it’s great for while you’re raising your children or paying for a mortgage.  If you die after the term is up, you don’t get anything.

Another type of policy is what’s called Whole Life Insurance.  You can buy it and keep it for as long as you’d like, assuming you continue paying the premiums.  It costs more than Term Insurance and there is a savings component included.  Additionally, there is a guaranteed payout if you die as long as that policy in good standing.

Moral of the story:

If you determine you need life insurance, and not everyone does, then I recommend term insurance over whole life.  I’d rather take the premium difference from term to whole life and invest it for my future.  That difference will build up quicker if it’s invested properly than it would if invested in a whole life policy.  I could write more about each type, but I suggest you research the differences yourself.  We had a term policy when our children were growing up and it worked out perfectly for us.