Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 14, 2021

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The Truth in a Nutshell

  • Buying life insurance can help you protect loved ones and leave behind a legacy
  • You can purchase either term or permanent life insurance
  • Term insurance policies tend to have cheaper life insurance rates

When should you get life insurance? If you can’t find affordable life insurance, is it bad to not have life insurance?

Well, life is full of the unexpected and the best-laid plans of mice and men often go awry. If the worst should happen, having life insurance lets you leave behind a financial cushion for your loved ones.

The death benefit of your life insurance can be used by your loved ones for a great many things like funeral expenses, day-to-day costs, and more.

Whether you’ll need term life insurance or another type of policy entirely depends on your needs, but if you’re asking yourself, “Is it bad to not have life insurance quotes?”, you don’t need to fret.

Stop worrying if it’s bad to not have life insurance and find affordable life insurance rates right here. Enter your ZIP code above to start comparing free life insurance quotes from local companies today.

Who needs to buy life insurance?

Whether or not it’s bad to not have life insurance depends entirely upon your needs and your financial goals, but here are three reasons to buy life insurance:

  1. Life insurance allows you to take care of your loved ones after you pass.
  2. Certain types of life insurance policies provide living benefits.
  3. Your life insurance plan can give back to the community.

Owning life insurance allows you to rest easy knowing that if you were to pass away unexpectedly you’ll be able to leave behind something that can help provide for your loved ones and their future.

While a life insurance policy cannot cure heartache, it certainly can remove financial uncertainly from your family’s life. For example, your death benefit could help pay for college or help your spouse pay off the mortgage.

The death benefit of a life insurance policy is typically tax-free as well. That means that if your policy provided for a $250,000 death benefit, your family would receive exactly $250,000.

Life insurance can be utilized by living policyholders, too. For example, if you had a large amount of cash value in your policy, you can use it for whatever you’d like. Many people take loans out on their policy rather than from the bank because these loans don’t need to be paid back.

This will, of course, reduce the death benefit, but if you need funds in a hurry, your life insurance policy can help.

If there’s a cause that you believe in and wish you could do more to help but can’t volunteer, and you’re unable to donate with your on-hand funds, you can use your life insurance policy as a resource.

You can name a charitable organization as your beneficiary just as you would an individual. This way you can potentially give more to support a cause that’s dear to your heart than you ever could before.

Even if you are single with no living family, you can purchase a life insurance policy.

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What are the different types of life insurance policies?

If you were to ask a life insurance company, “Is it bad to not have life insurance?” You would be most likely be told, “Yes.” But that doesn’t mean you should run out and buy the first insurance policy that’s offered to you.

When deciding what kind of life insurance you should buy, you’ll need to start by understanding the different types of policies that are available to you.

There are a variety of policy types, but they all fall under two categories: term and permanent life insurance.

When you purchase term life insurance, you will pay a monthly or annual premium in exchange for coverage. However, a term insurance policy only lasts for a certain amount of time.

If you pass away while your term life insurance policy is still active, you’ll receive a death benefit, but if you outlive your policy term length, you will have to buy a new policy.

On the other hand, permanent life insurance remains active for as long as you are alive — as long as you pay your bill on time. Whole life insurance policies and universal life insurance policies both fall into this category.

Both term and permanent life insurance policies have their pros and cons but you should always examine how each type can benefit you most.

What are the benefits of term life insurance?

If you’re concerned about life insurance rates, is it bad to not have life insurance? If you want to provide financial security for your loved ones but don’t have a wealth of savings or investments and need to say within a budget, term life insurance could be a good choice for you.

Here are the top three benefits of term life insurance policies:

  • Term life insurance offers lower premiums
  • Term life insurance offers flexibility
  • Term life insurance can be converted into permanent insurance

Since term life insurance policies only last for a certain amount of time, you could live for the entirety of the policy’s period which means that your insurance company is assuming less risk.

This allows the company to offer lower rates for such policies. A young and healthy individual could purchase a term life insurance policy for very little.

The flexibility of term policies is also very appealing. If you have great aspirations for a new business you’re starting or for your financial future, you can pick how long your policy will last.

You could get a 10-year or 20-year long policy so you know that you’ll have protection as you work towards your financial goals.

You’ll also know how to plan your budget for those years since your premium will change, and you’ll know how long your policy is going to last.

Of course, if you reach the end of your policy period and decide that you would like to continue having life insurance, you can convert the policy into a permanent life insurance policy.

That being said, this conversion could increase your rates; however, doing so could also allow you to partake in the living benefits that permanent life insurance can provide.

What are the benefits of permanent life insurance?

Permanent life insurance can be a great investment as it offers tax-deferred growth, lifetime coverage, and allows you to borrow against the cash value that is built up in the policy.

You can use permanent life insurance policies to grow wealth for yourself and your family since there are no taxes on any interest or dividends until you withdraw funds from your policy’s cash value.

Aside from that, permanent life insurance is so popular because it is what it says it is — permanent.

If you have people counting on you financially or want to build up a larger death benefit for a cause that is important to you, permanent life insurance policies can help you provide lifelong protections for those people or institutions.

You can also use your permanent policy while you’re still alive. For example, if you need money to invest in a new business, you can take a loan out on your policy without worrying about paying it back.

Accelerated benefits are also a key selling point of a permanent life insurance policy.

You can receive as much as 100% of your death benefit prior to your death if you find yourself stuck with end-stage renal failure, a stroke, a heart attack, or aggressive cancer. These accelerated benefits can be used to pay your medical bills.

Is it bad to not have life insurance?

You may find yourself wondering, “Should I get life insurance in my 20s? Do I need life insurance after 60?” The answers to those questions all come down to you, your lifestyle, and what kind of legacy you want to leave behind.

If you want to make sure that your loved ones have financial protection after you’re gone, but the cost of insurance keeps you up at night, you can find affordable life insurance companies that can work with you and your needs.

Stop asking yourself, “Is it bad to not have life insurance?” and enter your ZIP code to get free life insurance quotes today.