Life Insurance: Do You Really Need It (and How Much)?

Life insurance isn’t always top of mind when you’re starting a new job. But understanding whether you need it—and how much—is an essential part of building financial stability for those who depend on you.

Let’s walk through the basics so you can make a clear and confident choice.

What Is Life Insurance?

Life insurance pays out a lump sum to your chosen beneficiary (like a spouse or child) if you pass away. It’s designed to replace lost income and help your loved ones cover costs like rent, mortgage, debt, childcare, or education.

Why Employers Offer It

Most employers provide group life insurance, which is often more affordable than buying it privately. Many offer a small base policy at no cost—like one year’s salary—and give you the option to buy more coverage at group rates.

It’s part of a well-rounded benefits package that supports employees’ families and financial well-being.

Preston’s Practical Advice

You probably don’t need life insurance unless someone depends on your income or unpaid labor.

Here’s who typically does need it:

• Married individuals
• Parents or guardians
• Homeowners with shared debt
• Anyone whose absence would create a financial gap for a partner or family

To figure out how much you need, consider:

• How many years of income your partner would need if you were gone
• The cost to replace your unpaid contributions (like caregiving or household tasks)
• Any outstanding debt that would become someone else’s responsibility

Example: A Quick Math Hack

If your spouse relies on $50,000 of your income each year and you’d want to provide that for 10 years, you’d need at least $500,000 in coverage—plus a cushion for things like debt or kids’ education.

If You Don’t Need It Yet

Single with no kids or shared debt? You may not need life insurance at all. But keep an eye on it—life changes fast. You can always revisit your election if your situation changes.

Final Thought

Life insurance isn’t about betting on the worst-case scenario—it’s about protecting the people who matter most, just in case. And your job might offer a great deal to get started.

At Dealing With Debt, we believe that true financial wellness includes peace of mind. Whether you’re protecting a partner, a child, or just planning for the future, we’re here to help you make smart, steady moves toward a more secure tomorrow—one paycheck, one policy, and one budget at a time.

Next Up: “Disability Insurance: The Most Overlooked Benefit You Might Desperately Need“