Life Insurance Movement – Why I Don’t Need Life Insurance Right Now

Today is the day of the Life Insurance Movement organized by Jeff Rose at Good Financial Cents. I figured this would be a great opportunity to discuss my situation and why I have the level of life insurance that I have. You must evaluate your own situation and determine what type of life insurance and how much life insurance you need.

Life Insurance – How I Evaluate My Needs

To determine how much insurance I feel I need a take a few factors into consideration. They include my age, my assets, my liabilities, who depends on me and, most importantly, how much money they would need to stay on track for a comfortable life should something horrible happen to me and I die. It isn’t something anyone wants to think about but accidents happen every day.

So What is My Current Situation?

Currently I am in my mid twenties and have a long-time girlfriend. We plan to get married eventually but we do currently live together. As far as assets and liabilities go, if I died today the mortgage and a small portion of my car loan would remain. My assets would be able to cover my liabilities completely if they needed to.

So who depends on me? My girlfriend does depend on me to split some of the household bills with her so she can pay more toward her student loans but if she needed to she could easily get a roommate to replace the same cost savings. She has a decent paying job and can provide for herself. The fact that we live together does afford us to live a nicer lifestyle than we would be able to if we lived apart but she’d be able to survive and live a decent lifestyle without me.

In my current situation, even no exam life insurance is not necessary for me. I would place no undue financial hardship on anyone if i died (other than the fact they would no longer be able to be in my awesome presence). Don’t get me wrong, it’d suck and I hope it never happens because it’d make a lot of people sad but financially everyone would be able to do just fine and move on with their lives.

That Won’t Always Be The Case

Don’t get me wrong, I strongly believe in term life insurance when you have a need for it. The second I find out we’re going to have a kid I’m getting term life insurance. At that point I would have more dependents, my wife and my kid(s) that rely on my income and chances are my girlfriend’s current income wouldn’t cover all the necessities to live a comfortable life and provide for our kids the way we would like. I’d make sure the insurance would be in effect until my kid(s) were completely grown and out of college so that our bases would be covered.

After the kid(s) graduate from college I’d be at least in my mid 50s and I should have enough assets invested for my wife to live a normal life if something were to happen to me. After all, we’d be retiring in a few short years and I am definitely going to be financially prepared to retire!

The Key About Life Insurance and Why It Is Important to My Family

To me the key about life insurance is that it is there for a purpose. Why it is important to my family is that it is there to make sure that my family can continue living a decent life without relying on me financially. I don’t want to make someone rich as a result of my insurance payout. I’d expect the money to be used to finish raising the kids, send them to college and fill in any gap left behind when my income disappears with me.

So do you have life insurance? If so, what is your reasoning? If not, why not? You really need to think through this because it is a very important decision.

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About Lance Cothern

Lance Cothern, a Certified Public Accountant (CPA) licensed in the Commonwealth of Virginia, is the founder of Money Manifesto. You can read more about him here or connect with him on Facebook, Twitter, Google+ or Pinterest.


  1. Very sensible argument! I also do not have life insurance, but my work offers some protection throught my pension of paying out 3x my salary if I died in service.
    When I have kids, like you, I will rethink this! No point in paying premiums for the sake of it just now though

  2. Lance,

    It sounds like you’ve really thought about your needs. You are probably right, you may not need life insurance right now, but at least you realize that you should have it later. However, it is so cheap – especially when you are young. You should think about checking it out;)

  3. You’re the first life insurance post I read today — good stuff! I think in your situation, yo’ure right, life insurance isn’t so important. For me, I have a wife and 2 little girls so I definitely have life insurance, as does my wife. Becuase it makes sense for us. I think life insurance is like a lot of personal finance topics, it all depends onyour situation!

  4. I don’t know how you have the deed set up on your townhouse, but what would happen to the mortgage if you kicked it? Would your girlfriend be out of a place to live? Does that matter to you if you’re not yet married?
    Our coverage is through our employers and is enough to pay off all of our debts – so with no debt payments the other person would have no problem living on one income.

  5. I also do not have life insurance for myself. I have no dependents, no debt, and no worries about paying for expenses related to my hypothetical and I hope very distant death.

  6. I agree that you don’t need it until you have dependents. As long as your girlfriend would have some way to keep your house, you should be fine. Do take into consideration all the various funeral costs though.

  7. You’re right on it, Lance. If you would have been one of my clients back in “the day” I would have told you to spend your money elsewhere. Why waste money on something you don’t need just because it’s “cheap?”

  8. Ornella @ Moneylicious says:

    It’s great to see you have taken the necessary time to determine if you need it or not.

  9. Lance, I’d agree that you probably don’t need life insurance and I think it’s great that you’ve actually sat down to think about why you do or don’t need it.

    My wife and I both carry life insurance and it’s enough to pay off all our liabilities and still have some cash leftover to replace one of our incomes for a few years. Great post!

  10. My work pays for approximately $100K and that’s all I have right now. I don’t think I need it until I have kids.

  11. I got life insurance as soon as we got pregnant. Not something I wanted to wait on at all. I am so glad we have it, and my wife feels more loved knowing that I can still take care of her should something aweful happen to me. I think you’re on the right track, and you will be showing your family more love than you know when you do purchase the policy.

  12. Lance,
    Great that you you’ve thought about this issue and personal finance is personal, each with its own nuances. As long as you realize you’re taking a risk of being uninsurable in future and you’re ok with that risk, stick with your plan. No one knows the future and how your health will be in 5 years. If you were were my brother, I’d encourage you over coffee to go ahead and get the insurance since you know you want to marry anyway and you’re healthy today.

  13. Lance, I think you have done your homework and made the right decision for you. Just don’t start smoking two packs a day and gain 50lbs before you get married!

  14. I have a term policy on my wife and myself. If either of us died prematurely, it may affect on our retirement plans.

  15. I think life insurance is a great investment. If I passed away, the last thing I would want my wife to have to worry about is where she will get the money to pay the bills.

  16. I agree, life insurance makes sense in certain situations but doesn’t in others. I am young, unmarried, no kids and relatively healthy. I don’t think it makes sense to pay an insurance company for those reasons. But I could see if I had a wife and a kid, and I was the main bread winner why it would make sense.

  17. Life insurance is a defense for your wealth and support for your family. I can’t think of not having it after you have a family to feed. I am insured through employer group insurance plan.

  18. I was wondering why I was reading so many posts on insurance. This is the first one that clearly referenced the insurance movement. I agree that if no one is depending on your income, then why do you need life insurance.

  19. I totally agree. If you’re not married with kids and a mortgage and people who depend on you, than you don’t need life insurance. And run away from anyone who tries to sell it to you as an investment product. I still have yet to see any real proof that it is.

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