11 Reasons You Think You Don't Need Life Insurance (And Why You're Wrong About All of Them)

Every reason people give for not having life insurance sounds reasonable until you look at it directly. Here are the eleven most common objections, examined without patience for the ones that do not hold up.

1. 'I'm single with no dependents.'

Who would pay for your funeral? Who co-signed your student loans? Do you have parents you support? Do you expect to have dependents at any point in the next 20 years? Buying coverage now while you are healthy and young locks in the lowest rate you will ever qualify for.

2. 'My kids are grown.'

Do you have a surviving spouse? Outstanding debt? A business? Estate tax exposure? The need for life insurance does not expire when your children graduate college. It changes shape. Permanent life insurance or a shorter term can address the specific obligations that remain.

3. 'I work from home, so my expenses are low.'

Your expenses have nothing to do with the financial impact of your death on your family. Your income does. If people depend on your income, they need life insurance on your life regardless of what your personal overhead looks like.

4. 'My spouse works too.'

A dual-income household that loses one income becomes a single-income household that still has dual-income obligations, the mortgage, the car payments, the childcare, the retirement contributions. Half the income does not make half the obligations go away. Most dual-income families cannot sustain their financial life on one income alone.

5. 'I have a lot of debt, so nobody would want to insure me.'

Debt is not an underwriting factor. Your health, age, and lifestyle are. Debt is actually a reason you need more coverage. Otherwise your family inherits your financial obligations on top of your absence.

6. 'It's too expensive.'

It is almost certainly less expensive than you think. A healthy non-smoking 35-year-old can get a $500,000 20-year term policy for under $30 per month. Get a quote before you make this assumption. Most people who have this objection have never actually checked the number.

7. 'I have life insurance through work.'

Employer coverage is rarely sufficient and is never portable. One to two times salary is the typical employer benefit. Ten to twelve times salary is the recommended coverage for income replacement. You also lose employer coverage if you change jobs, get laid off, or retire.

8. 'I'm too unhealthy to get approved.'

Possibly, but probably not. Many health conditions are manageable under underwriting. You may pay a higher rate rather than face outright denial. Guaranteed issue policies exist for people who cannot qualify for standard coverage. Talk to an agent before assuming you are uninsurable.

9. 'I'll invest the money instead.'

You cannot invest your way to $1,000,000 in coverage before you die next Tuesday. Life insurance is not an investment vehicle. It is a hedge against dying before your investment portfolio has time to grow. They serve different purposes and one does not replace the other.

10. 'I don't trust insurance companies.'

Life insurance claim denial rates are among the lowest in the insurance industry. The most common reason a claim is denied is application fraud. Lying on the application. If you are honest on your application and you die, the company pays. That is the deal and it is enforced by state regulation in every jurisdiction.

11. 'I'll do it next year.'

You said that last year. Next year you will be older, potentially less healthy, and definitely paying a higher premium for the same coverage. The best time to buy life insurance was five years ago. The second-best time is today.

Every objection on this list has a response. The only one that does not is the real one, which is that you do not want to think about dying. That is understandable. It is also not your family's problem to solve.