Life Insurance Is Really Important. Here's Why I Don't Have It

Life insurance is a way to buy peace of mind that your loved ones will be able to manage without you, at least from a financial standpoint. If you have people that rely on you for income or services that would otherwise need to be paid for, dying without life insurance (or another financial cushion you're leaving behind) could be catastrophic.

I used to have an inexpensive term life insurance policy, but I canceled it a few years ago when money was tighter than it is now. But even after my financial situation improved, I didn't bother replacing it with a new policy. Here's why.

I have no (human) financial dependents

At the time I canceled my old life insurance policy, I was facing a pay cut at my job thanks to the COVID-19 pandemic, and was trying to find ways to lower my already fairly minimal monthly expenses. I had also gotten divorced again the previous year, and at that time, canceling or modifying the insurance policy (which had my ex-spouse listed as a beneficiary) didn't really occur to me. (Note: Don't be like me -- if your personal situation changes, review existing insurance coverage to ensure the right people are listed as beneficiaries.) So the life insurance policy ended up on the chopping block, and I haven't felt the need to get a new policy for one major reason.

I have no other humans depending on my income, and this isn't likely to change in the foreseeable future. I'm not a parent and won't be getting married again -- I'm not single, but my personal finances are. I do currently have three furry dependents, in the form of the cats I've adopted. Their care is important to me, but I've provided for them by allocating funds in my will, rather than by getting a life insurance policy.

How can you make life insurance cheaper?

If you have a spouse or children (or both), life insurance really should be on your radar. And even if you aren't married or a parent yet, if you intend to be in the future (or will have other people relying on you financially), the time to get a policy in place is "as soon as possible." The same is true if you co-own a business with someone else who might struggle without your help. You might assume that you'll be stuck paying a lot for life insurance. This isn't the case, though! A term life insurance policy is your best bet for finding affordable coverage -- whole life insurance gains a cash value over time, but it is markedly more expensive than term life.

The trade-off with term life insurance is that your policy only covers a specific period of time (or term, if you will). These are commonly 20 or 30 years, which is likely enough time for your children to grow up and no longer be financially dependent on you, if you get a policy before they're born or while they're still young. To make this type of policy as cheap as possible, get it in place as soon as you can. According to PolicyGenius, a 30-year-old woman can expect to pay an average of $22.99 per month for a 20-year term life policy that pays $500,000 in the event of her death. That's not a bad price for peace of mind.

The other tactic to try to save money on life insurance is to shop around with multiple companies. Motley Fool Money even has a list of the best cheap life insurance companies, which would be a great place to start looking. If you do need life insurance coverage, the time to act is now -- so for the benefit of your loved ones, add it to your to-do list.