Do I Really Need Life Insurance?
It depends on who depends on you.
3 min read · Updated June 2026
Life insurance isn’t exactly a fun topic. Nobody wakes up on a Saturday morning excited to learn about death benefits and insurance premiums.
But life insurance can be an important part of a financial plan, especially if other people rely on you financially.
So let’s answer the big question: do you actually need it?
What life insurance does
At its most basic, life insurance provides money to your loved ones after you pass away.
The purpose is simple: replace income, pay expenses, provide financial support to the people you leave behind. You do this by making them something called “beneficiaries” of your life insurance, the people that receive the life insurance payout.
If you have a spouse, children, or anyone who depends on your income, life insurance can help protect them financially if something unexpected happens to you.
Life insurance isn’t really about you. It’s about the people who depend on you.
Who should consider life insurance?
Life insurance is often worth considering if:
- You have a spouse or partner who relies on your income.
- You have children.
- You have a lot of debt that someone else would be responsible for.
- You want to leave money to family members after you’re gone.
On the other hand, if you’re young, single, have no dependents, and nobody relies on your income, life insurance may not be a high priority right now.
The most common type: Term life insurance
Term life insurance is by far the most popular option.
You make monthly payments called “premiums”. If you pass away while you are paying on the term life insurance policy, your beneficiaries receive a lump-sum payment of the amount of the insurance.
No complicated features, just insurance in case something happens.
For most people, term life insurance provides the most coverage for the lowest cost.
What about whole life and universal life?
Whole life and universal life insurance combine insurance with investments. Part of your premium pays for insurance coverage, while another part builds an investment portfolio.
While these types of insurance can make sense in certain situations, the monthly premiums tend to be much more expensive than term life insurance.
At Firreo, we generally prefer keeping insurance and investing separate.
Insurance is for protecting your family. Investing is for growing your money.
That doesn’t mean whole or universal life insurance is wrong. It just means most people should understand the costs and tradeoffs before buying it.
Check your employee benefits
Before purchasing an insurance policy on your own, take a look at your job benefits. Many jobs offer some amount of life insurance at little or no cost to their employees.
It may not be the amount of coverage you want, but it’s a good place to start.
Why it matters
Life insurance isn’t exciting, but it can provide something incredibly valuable: peace of mind. Knowing your family would have financial support if something happened to you can make a difficult situation a little easier for the people you care about most.
A financial plan isn’t just about building your investments. It’s also about protecting the people you love.
Key takeaways
- Life insurance can help protect the people who depend on you financially and provide money to your beneficiaries after you pass away.
- People with spouses, children, or dependents should strongly consider life insurance.
- Term life insurance is the most common and affordable type of coverage.
- Whole life and universal life insurance combine insurance with investing, but often come with higher costs.
- Many employers provide life insurance as part of their benefits package.
This guide is for education only and is not personalized investment advice. All investing involves risk, including the possible loss of principal.