Skip to Content
Family with two children in a bright kitchen indicating a time to learn about why getting life insurance is important.
Why get life insurance

Life insurance questions: Who, when, how much?

Need some basic life insurance information? This article discusses who needs life insurance, how much, and when.

Answering your basic questions about life insurance

Life insurance is one of the more versatile forms of insurance. The importance of a life insurance policy cannot be overstated. A life insurance policy can serve a number of financial objectives from mortgage protection to estate planning. With so many helpful applications, there's a good chance that life insurance has a place in your financial plan. Below, we'll provide scenarios to help you make informed decisions.

Who needs life insurance?

If you can answer “yes” to any one of these three questions, you may need life insurance.

  1. Do people depend on you?
  2. Do you have a mortgage?
  3. Does your retirement income depend on a spouse's Social Security?

These three questions identify common challenges that can be addressed by the unique protection of a life insurance policy. Let's take a closer look.

Do people depend on you?

Our first thought about life insurance is about dollars and cents - the loss of income to a family if the primary wage earner dies. Life insurance provides survivors with the means to maintain their economic lifestyle. While life insurance for breadwinners is important, it's essential to also consider a family's dependence on a stay-at-home parent. A stay-at-home parent provides care and services that would be very expensive to replace. According to, in 2018 the monetary value of the work performed by a stay-at-home parent is valued at $162,581 annually.

In addition, many families rely on home care for disabled or elderly family members. The loss of a caregiver may add a significant expense to continue care at home, an expense many families are not prepared for. The point is, if your goal is to maintain the economic lifestyle of loved ones, be sure to look at the cost of losing both wage earners and caregivers.

Do you have a mortgage?

Having a mortgage is a life stage that affects our life insurance needs. For many of us, our home is our greatest asset. After the housing market crash of 2008, we are very aware of the vulnerability of home ownership during volatile housing markets. Consider protecting the investment you've made in your home with a life insurance policy that is at least equal to the amount of your mortgage. Even if your loved ones could carry on comfortably without your income, would they have enough to stay in your home?

Does your retirement income depend on a spouse's Social Security?

Have you considered making life insurance a part of your retirement plan? When it comes to preparing for and living in retirement, baby boomers tend to dominate the headlines and the story that follows is often about inadequate or non-existent retirement savings. Many will have only Social Security benefits to see them through retirement. Life insurance can ease the stress, particularly in two areas. A married couple without additional savings to draw from, may have little wiggle room in their budget. When one spouse dies, the surviving spouse will have less monthly income than the couple had when both were receiving benefits. Receiving a life insurance policy benefit could ease the pinch from the reduction in the total Social Security benefit.

In addition, many life insurance policies offer a long-term care feature that allows some of the death benefit to be distributed early to cover long-term care expenses. Sadly, most Americans do not have long-term care insurance. A life insurance policy with a long-term care insurance rider can reduce that financial burden, if necessary.

When is the best time to buy life insurance?

Like most types of insurance, you want to buy life insurance as soon as you have a need to protect someone or something from financial distress. Of course, the younger you are when you purchase, the lower your premium will be. 

How much life insurance should you buy?

There are many online formulas and calculators, such as this Needs Calculator, that recommend an amount of life insurance based on your financial situation. Of course, you want to think about your life insurance goals, which may include protecting those who depend on you; paying off your mortgage; and providing for a spouse during retirement. The other important factor to consider is how much you can afford.

As always, an insurance agent can provide extensive life insurance guidance, helping you understand your options and answering the question “how much life insurance do I need?” for your unique situation.



Arrows linking indicating relationship

Related Articles

Young couples on beach indicating the time of life when you should be asking if I need life insurance and what type.

Life insurance guidance and basics

Learn more
A couple standing on a mountaintop surrounded by a sea of green trees on surrounding mountaintops.

Do you need whole life insurance?

Learn more
Young biracial family happy and thankful that they have adequate life insurance.

Do I need life insurance?

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.