You probably need life insurance when your death would create a financial problem for someone else. You may need less—or none—when nobody depends on your income, debts and final expenses are covered, and your legacy goals are already funded.
Name the problem in dollars and years
Income replacement, debt payoff, education funding, business continuity, estate liquidity, and final expenses are different problems. Add them together, subtract resources already available, and you have a reasoned starting point.
‘Everyone needs permanent insurance’ is not analysis. Neither is ‘buy term and invest the difference’ when nobody checks whether the difference will actually be invested or whether the need will outlast the term.
Coverage should change when life changes
Marriage, children, debt, a business, retirement, and accumulated assets can change the need. A policy review should be allowed to conclude that coverage should increase, decrease, stay put, or end.
- A recommendation before anyone defines the need
- Premium affordability tested only for year one
- A temporary need matched to an inflexible lifelong premium
Buy enough insurance to solve a real problem for a period you can explain. Do not buy a product in search of a reason.
Check the source
Regulator and government reading behind the plain-English explanation.