Do I need life insurance?

[Herr Kutz]

It's 6 bucks a month for 50k/100k coverage. I'm young, single, and have no mortgage or long term debt obligations and my savings should be more than enough to pay for my funeral expenses.

Is it a waste of money?

 

[deadlyapp]

I wouldn't pay for life insurance but my company covers up to 1.5x my salary free of charge.

 

[PricklyPete]

Waste of money in your situation. Many jobs already offer life insurance up to your salary for free (might want to check your benefits).

Now, once you are married/have kids...that is another story.

 

[Herr Kutz]

This is through a company plan and it's a Life/AD&D plan.

 

[highland145]

AD&D plan? In that case, hell yes. Some rat bastard player character is going to try and take you out.


Serious answer, whole life that can be paid up. I like term with reinvesting the difference but my 30 year term is expiring soon and it's going to be expensive to replace at 52 y.o.

 

[NutBucket]

I wouldn't in your case. In my case, with a wife and kid it makes much more sense to have.

 

[Imp]

I have no idea... but it turns out that if I want to become a teacher, I better make sure I have insurance through a union or personal.

 

[Herr Kutz]

F it, I'm waiving coverage. Have to make up for health insurance premiums going up 138% and deductibles going up 60% somehow.

 

[Brainonska511]

It's probably not worth it, but it could save some hassle if a funeral needed to be arranged - whoever handles your estate might not have immediate access to your funds to cover your funeral expenses. Thus, they'd likely be forced to cover it out of their own pocket and submit a bill for reimbursement from the estate.

 

[Herr Kutz]

It's probably not worth it, but it could save some hassle if a funeral needed to be arranged - whoever handles your estate might not have immediate access to your funds to cover your funeral expenses.

Meh, my parents could handle the cost even if it takes a while to get at my mula.

 

[SearchMaster]

Then you don't need life insurance.

It's basically to provide replacement of income or services in the event of your death. If you were married, your wife might need it to replace your income to pay the mortgage and other expenses (or to pay off the mortgage so it's no longer a worry). If you had no income but were a housewife/househusband, your spouse might need it to replace your services (nanny, etc.).

But $6/mo is a relative pittance, so if you wanted to see to it that a close friend or relative were taken care of if you had a horrible accident, it's not the worst way to spend that money. I did it for a year or two in my early twenties (I think it was $2 or $3 a month) and named my nephews the beneficiaries.

 

[Red Squirrel]

I'm 30, single, and no life insurance. Though I really need to look into writing a will. Just something I never think of actually going forward with.

I think the way it works is if you die, any assets like house (in my case) would be sold off to pay rest of mortgage, and profit from equity goes to my estate, it would pay off any outstanding bills, and rest could go to funeral. Idealy I'd probably want life insurance if I had tendancy of carrying a large CC debt or something, but other than short term my only debt is the mortgage and it could be completely written off with sale of the house. At least I think that's how it works. Suppose if there was a housing crash and my house ends up being worth less than what I paid for it, then I would maybe need life insurance.

 

[dullard]

It's 6 bucks a month for 50k/100k coverage. I'm young, single, and have no mortgage or long term debt obligations and my savings should be more than enough to pay for my funeral expenses.

Is it a waste of money?

No one needs life insurance for themselves. Once it pays out, you get no benefit since you are dead. People often need life insurance for others though. Does anyone rely on your income or service to survive (a spouse, a child, an ailing family member)? If the answer is no, then do not buy life insurance.

 

[dullard]

I think the way it works is if you die, any assets like house (in my case) would be sold off to pay rest of mortgage, and profit from equity goes to my estate, it would pay off any outstanding bills, and rest could go to funeral. Idealy I'd probably want life insurance if I had tendancy of carrying a large CC debt or something, but other than short term my only debt is the mortgage and it could be completely written off with sale of the house. At least I think that's how it works. Suppose if there was a housing crash and my house ends up being worth less than what I paid for it, then I would maybe need life insurance.

In the US, unsecured debts are not passed on to others. If your estate can't pay off the CC bills, then the CC company has to eat it. Same with student loans, when you die, there is no more student loan debt. With secured debt such as mortgages, they can only demand as much as the house is currently worth. If the housing prices crash (and assuming your estate sells the house) the bank eats the loss. The estate doesn't have to see the house, but then the estate gets to take the loss if any. It is similar with other secured debt such as cars, the car can be repossessed but if you owe more than you can afford then the bank takes the loss.

In general, the only way debt can be passed on is if the other person co-signed a loan or decided to pay for things (such as extravagant funerals) themselves.

 

[JimKiler]

No one needs life insurance for themselves. Once it pays out, you get no benefit since you are dead. People often need life insurance for others though. Does anyone rely on your income or service to survive (a spouse, a child, an ailing family member)? If the answer is no, then do not buy life insurance.

and if the OP does answer yes get term life insurance. You don't need a lot of whole life insurance. Term is cheaper and the theory is you only need insurance until your house is paid off and children are living on their own. You do want something to pay for a funeral but whether you want whole life insurance to cover those costs or if you want to use a retirement account is your choice.

 

[Ancalagon44]

I'm also single with no children, but I'll be getting life insurance next year. However, I'll be getting disability cover only.

I had a minor health scare earlier this year, and I realized that if something happened that resulted in me being unable to work, I'd be screwed. I don't have any dependents, but I am dependent on my ability to earn a living. So, I want disability insurance to make sure that, if anything happens to me, and it isn't lethal, at least I don't have to depend on other people.

 

[dullard]

and if the OP does answer yes get term life insurance. You don't need a lot of whole life insurance. Term is cheaper and the theory is you only need insurance until your house is paid off and children are living on their own. You do want something to pay for a funeral but whether you want whole life insurance to cover those costs or if you want to use a retirement account is your choice.

You are correct. Whole life insurance is basically mediocre term life insurance + a mediocre retirement account. Why settle for mediocre when you can get great term life insurance and a great retirement account. Only a few select people benefit from whole life insurance vs getting the parts separately.

 

[MrDudeMan]

If you think you might have a reason to get life insurance later, I would get it now. It's cheaper to get a plan when you are young and healthy. I opted into the work sponsored plan for a small amount, but I also keep my own policy at Metlife. I had it before I got married or had kids and I'm glad I did because the price is fixed and it's a lot cheaper than I would be able to get at this point in my life.

 

[pete6032]

No. Your life is meaningless and has no value.