Do I Need Life Insurance? A Guide to Who Needs it and Why

Colin Grubb
May 3, 2016

Is It Time to Buy Life Insurance?

The answer to that question is another question. Do you have people depending on you financially? A spouse? Children? Relatives? If the answer is yes then life insurance is a really good idea.  You need to be able to assure that your family is at least able to carry on as they are currently in the event of your unplanned absence.

Grief is difficult enough. Grief compounded by the inability to cover debts, funeral expenses, mortgages, or the daily cost of living can turn a bad situation into a family disaster. Money will never take your place. But money can ensure your loved ones won’t have to struggle unduly.

Why do so many Americans not have life insurance?

They think they can’t afford it. The average American is laboring under significant revolving debt while income growth has not kept up with the cost of living. In fact, when the Federal Reserve Board recently asked if they’d be able to come up with $400 for an emergency, nearly half of Americans admitted they couldn’t.

With so many barely covering monthly expenses as it is, it is easy to understand why the prospect of throwing yet another payment into the mix is daunting. The truth is life insurance, particularly term life, can be significantly less expensive than most people think. And considering the nightmare its purchase may help avoid for your family, it’s definitely worth at least taking a look at the options to see if you can squeeze it in.

The Earlier the Better

Aside from the financial aspect, another factor that keeps people from buying life insurance is that the very act of doing so brings potential policyholders face to face with their own mortality. Most don’t like to think about dying, and certainly don’t want to spend any time doing so than they have to. 

Life Insurance plans will be the most affordable for the young and healthy. Unfortunately, that time of life is precisely when life insurance is least likely to be considered. While it might be initially unpleasant, the payback that comes with peace of mind will pay dividends down the line.

Types of Life Insurance

By and large, there are two kinds of life insurance, term life and whole life -- also called permanent life insurance. Typically, most would be best served by term life insurance -- the cheaper option. However, there are cases where you will need a payout regardless of when you die. Having a special needs child or dependent would be one such case. 

Regardless of which is chosen, if you have not accumulated enough savings to cover funeral expenses and income replacement, then need life insurance is a must. 

How to Choose the Right Provider

The process of buying life insurance can be intimidating and complicated. This mainly due to the traditional structure of the business sector as a whole.

At Consumers Advocate we’ve reviewed traditional and newer life insurance providers alike by five factors. They are: 

  • The options offered for coverage and premiums
  • A given institution's financial reputation, as assessed by trusted outside sources
  • Policy features offered
  • Types of plans offered
  • Plan rider options

From rock solid, stalwart American icons like State Farm and New York Life, to relatively new Internet-based comparison services like PolicyGenius and SelectQuote Life, there are more options than ever for buying life insurance policies. With that in mind, we've reviewed every company, and consolidated the results into what we feel are the top 10 life insurance providers in the industry.