Millions of American adults have life insurance policies that protect both themselves and their beneficiaries. While the benefits of having a policy are numerous (and they are relatively cheap to secure), millions of other adults don’t have life insurance at all.
“Just 46% of women report owning life insurance, compared with 53% of men,” according to a 2022 LIMRA study. The reasons why so many people don’t have life insurance vary significantly. It could be that they feel the cost is too high or that the coverage amount is too low. It could also be that they don’t feel the urgency because they already have money saved up.
But is that enough or do you need life insurance even if you have savings? That’s the question we will explore below.
If you’re in the market for life insurance then start by getting a free price quote so you know what to expect.
Do you need life insurance if you have savings?
If you have a substantial amount in savings then you may be able to skip applying for life insurance. In most cases, however, it’s recommended that you obtain a policy. Here are three reasons why you need life insurance even if you have savings.
You may not have enough saved
You may have thousands, tens of thousands, or even six figures saved in the bank. But that still may not be enough compared to what you can get with a life insurance policy. Life insurance payouts range from thousands of dollars to more than $1 million – the latter of which will be difficult for most adults to save in their lifetime.
Consider that many financial advisors recommend having at least 10 times your annual salary in life insurance protection. Do you have that amount of money saved up currently? Or can you realistically save that amount in the near future? If the answer is no, then your savings account is not substantial enough to skip life insurance.
Start by getting a free life insurance estimate here to see how much you need.
Your savings may decrease
Even if you have enough saved that you feel comfortable avoiding life insurance it doesn’t mean that that security will last forever. If your money is tied up with the stock market, real estate or otherwise invested in something that you don’t have direct control over then it’s wise to get life insurance now. There’s no way of knowing what the market will do in the long term or even over the next 12 months. Trillions of retirement savings were wiped out just last year. In our current economic climate plagued by inflation and uneven market performance, it’s smart to spread out your risk. Don’t just depend on what you have saved. Get a life insurance policy and know with certainty that you and your loved ones will be protected no matter what happens.
Your financial needs may change
You may currently have enough money saved that you don’t need life insurance. But that’s just for the moment. What if your financial needs change? It could be difficult to make an expedient adjustment to your savings to reflect this new reality.
For example, you may have enough savings for you and your spouse. But what happens if you have a child? Or two children? That will significantly alter the amount of protection you need and chances are you won’t be able to make up the difference with savings alone. Similarly, if you’re renting now but decide to take a mortgage in the future you’ll want enough to cover that outstanding debt should something happen to you.
In short: Savings may be sufficient for the short term but it likely won’t be enough should your financial needs change. Only life insurance can adequately support you through such adjustments.
Get a life insurance quote online now or use the table below to start reviewing some options.
The bottom line
In rare circumstances, your savings may be so substantial that you don’t need life insurance. But in many other cases, life insurance is a valuable and cost-effective protection to have. That’s because you simply may not have enough money saved or, you could, but those savings could dwindle in the future due to circumstances beyond your control. Finally, your financial needs may change as the birth of children or new financial responsibilities make it so that your savings no longer adequately protect you. In these examples and more, it’s generally advisable to have life insurance even if you have extra money in the bank.