really need life insurance


It’s not easy to think about life insurance. Trust me, I know. It’s not fun to imagine you or your spouse dead. I get it. But the chances are good that if you are a young professional (dentist, doctor, lawyer, etc) saddled with student loan debt despite your high income, you don’t have enough (or any) financial protection for your family. My husband and I recently got our own life insurance policy after literal months of debating whether we actually needed one. And honestly not everyone needs life insurance. So you might be wondering, “Do I really need life insurance?” like we were. Let’s find out.

What is life insurance? 

First, let’s discuss what life insurance actually is. Life insurance is simply a contract with an insurance company where you promise to pay a premium (i.e. fee) each month and in exchange, the insurance company will pay your beneficiaries (i.e., spouse, kids, designated loved ones) a sum of money if you die during your term of coverage.

Do I really need life insurance? 

There are plenty of factors you should consider in deciding whether you actually need life insurance.

Do you have beneficiaries? 

At the outset, you probably don’t really need life insurance if you are single and without kids. Remember, the primary purpose of life insurance is to protect your beneficiaries in the event of your untimely death. So if you don’t have beneficiaries, you don’t need it. On the other hand, if you have a spouse/partner and children, and especially if your kids are young, you should consider a life insurance policy. In my opinion, having young kids at home is the single most important factor in determining whether you really need life insurance. You want to make sure your kids will be taken care of in the event of your death. I had a friend in college — his parents both died in a car crash when he was in middle school. It was completely unexpected (as death often is) and neither of them had a life insurance policy. He speculated that because both of them worked, they assumed that if one of them died, the other would be able to manage things. What they hadn’t considered was a situation where both of them died, leaving behind their kids with no financial help to speak of.

Does your spouse work? 

Another factor to consider is whether your spouse works. And not just whether they work, but whether they can bring in sufficient income on their own to pay off any debts and obligations you might be leaving them with when you die. So, for example, say you purchased a dental practice and your wife cosigned on the loan (like we did). When you die, your wife is going to be responsible to pay the debt each month, regardless of the fact that you died. In the alternative, she’ll have to sell your business (which may or may not be desirable). In short, you want to make sure that your spouse can cover all the bills in the event of your death. If your spouse has a high paying job that can cover the bills, life insurance might not be worth it. But if you also have kids, you may want a life insurance policy on one or both spouses.

Do you have a ton of savings?

You probably don’t really need life insurance if you are financially independent or have so much in savings that your family could continue paying the bills for the next several years in your absence.

Do you have a ton of debt? 

The general idea here is that your family will be able to continue making debt (and other payments) without your salary. So, if you have tons of debt that won’t be discharged at your death, you might consider getting life insurance so that your family can continue making payments those debt payments. Look into whether your debt will be discharged at your death. Federal student loans and many private student loan companies discharge debt at death so long as there is not a cosigner on the loan.

Can you afford life insurance?

Another thing to consider is that life insurance is actually pretty cheap. Like dirt cheap. We have a 20 year policy of $1m that only costs $40 per month. You can find lots of 10 year policies of $1m for close to $20. We personally used Haven Life Insurance because it was the cheapest deal we could find among companies that we believed were reputable. Haven is a subsidiary of MassMutual which is an extremely well known and reputable company. You want your life insurance to be cheap but you also want to make sure you’re using a company that is going to pay out should you need them to.

How old are you? 

The younger you are, the more you’ll benefit from a life insurance policy should the worst happen. The older you are, the more likely it is that you and your spouse will have enough in savings or other assets to be OK if one of you passes. In addition, the older you are, the more likely it is that your kids will be older and self sufficient.

Why we chose to get life insurance 

I am a lawyer. Danny is a dentist. We currently have around $400,000 of student loan debt. [Related: How We Paid off $200k of Student Loan Debt]. After debating for months on whether we really need life insurance, we ended up going for it for a few reasons. The most important reason we decided to get it is because we have a son. If both of us die, we wanted him to be covered. We are not financially independent and while we have some good savings, we don’t have enough to take good care of him if we die now and he needs help for the next 20 years. We got a smaller policy than most people recommend (we’ve heard recommendations to get anywhere between 5-10x’s your income) because Danny and I both have decent earning potential if we outlive each other. And while we have TONS of debt, Danny’s student loan debt would be forgiven at his death, and with my jobs/businesses I could manage the debt on his dental practice and if we both die, the loan on his dental practice would be discharged.

Do you have life insurance? Why or why not? Drop a comment below!

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Here at Deeply in Debt, we offer tons of personal finance advice based on our own journey paying off $650k of student loan debt. If you have student loan debt and aren’t sure where to start or what to do, I highly recommend the CFA’s over at Student Loan Planner to help you put together a solid financial plan for your student loan debt. We personally used them and it literally saved us over $200,000 on our student loans. You can check out the Student Loan Planner here.

really need life insurance

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