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Why do I need life insurance?

5 reasons to consider buying life insurance

Life insurance is one of the selfless gifts you can give to the people you would leave behind if you pass away.

Life insurance is not as complicated or expensive as many people may think. So rather than view it as such, consider what it could mean to your loved ones someday if they lost you — and think of it instead as a potentially happy ending to a difficult situation.

Here are five important reasons why life insurance is important.

Life insurance is not for you — it's for your family

If you think you don’t need life insurance, you’re right — technically, at least. You don’t purchase life insurance for yourself. You purchase it for the loved ones you leave behind.

Here are the ways life insurance can help loved ones in your absence.

Short-term family needs

Upon your death, would your spouse or partner be able to pay the rent? Afford the bills? How about pay for funeral, burial or cremation costs, which average between $5,000 and $10,000?1

At a time of great emotional stress, financial concerns can pile on — especially if they are forced to move, re-enter the workforce or make other significant lifestyle changes.

Would you leave behind significant credit card debt or student loans? If you’re young and your parents cosigned on your loans, they may be liable for your debt. If your loan includes an acceleration clause, your parents may have to pay off the loan immediately.

Life insurance can help keep your family members from having to tackle large financial issues when they may be least equipped to do so.

Long-term family needs

Your family can feel the economic impact of your loss well into the future.

Sometimes family members must make major changes that create additional expenses, such as a non-working spouse returning to the workforce and needing to pay for daycare. Life insurance proceeds can help cover those new expenses.

If you have children, life insurance can help provide stability and normalcy in their lives — for example, remaining in their school district, participating in sports, having the ability to go to college or pursue other dreams.

Perhaps your family includes a child, sibling or parent who is disabled and will require lifelong assistance and financial support. Life insurance can help ensure the continuity of their care.

Protection for your business

For business owners, life insurance can help your business keep its lights on, employees paid and vendors satisfied in the event you die unexpectedly.

There are also ways life insurance can benefit business owners during their lifetimes. Read more about how life insurance can be maximized in business.

Life insurance may not be as expensive as you assume

Let’s address this first, because it seems to be a stumbling block for many people.

While the cost of life insurance coverage depends on a lot of variables like age, sex, overall health and type of policy, it typically costs far less than people think.

In fact, for healthy people under age 40, a $500,000 20-year term policy can be less than $37 per month for men and $33 for women. If you're under age 30, it can cost less than $30 per month.2

Naturally, as you age, buying life insurance becomes more expensive because your health declines and the odds of dying sooner increase. So lock your rate in now while you’re young and healthy and save yourself from paying a higher premium later.

When you finally need life insurance, you may not be able to qualify

Not all deaths are unexpected — in fact, more adults age 25-44 die each year from serious illness than by accidental injury,3 many leaving significant medical bills behind.

Unfortunately, by the time someone is diagnosed with a serious illness, it is often too late to get life insurance coverage. You can help ensure your family is able to stay in their home and not dip into savings to pay medical bills by having life insurance.

It can be an additional source of funds

All life insurance is not the same. While term insurance is just that — a temporary policy that lasts for a specific time period and then ends — permanent life insurance is meant to cover you for the remainder of your life.

Permanent life insurance also accumulates cash value. Each policy may differ, but typically you can use it to withdraw cash, take a policy loan to borrow cash you repay later, or terminate your policy and take its value in cash.

Many people use cash value to help fund important events in their lives, such as a college education or additional income in retirement.

Life insurance can help you leave a legacy

When you purchase life insurance, you choose at least one beneficiary — the people or entities that would receive a benefit from your policy.

In addition to naming family members as beneficiaries, some people choose to name their church, favorite charity or nonprofit organizations that supports causes they care about.

In some cases, life insurance can enable you to give in death more than you might have been able to donate to the cause during your lifetime.

Learn more about life insurance

There are different types of life insurance, with features to benefit you in different ways.     

Review the types

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How do I purchase life insurance?

Our insurance products can be purchased through a financial professional or may be offered through your employer, financial institution or association.

To see how much insurance you may need, use our easy-to-follow calculator. 

Start calculating

1. National Funeral Director's Association. Statistics. Updated May 22, 2023.

2. Minnesota Life Insurance Company term life insurance quotes provided July 10, 2023 for a 20-year term life insurance policy with a face amount of $500,000. Quotes for a male, age 39, preferred nonsmoker, < $37 per month; male, age 29, preferred nonsmoker, +/- $29 per month; female, age 39, preferred nonsmoker, < $33 per month; and female, age 29, preferred nonsmoker, +/- $24 per month.

3. National Center for Health Statistics. "Health, United States, 2020-2021: Age-adjusted death rates for selected causes of death for all ages, by sex: United States, 2007–2017."

Please keep in mind that the primary reason to purchase a life insurance product is the death benefit.

Life insurance products contain charges, such as Cost of Insurance Charge, Cash Extra Charge, and Additional Agreements Charge (which we refer to as mortality charges), and Premium Charge, Monthly Policy Charge, Policy Issue Charge, Transaction Charge, Index Segment Charge, and Surrender Charge (which we refer to as expense charges). These charges may increase over time, and these policies may contain restrictions, such as surrender periods. Policyholders could lose money in these products).

Policy loans and withdrawals may create an adverse tax result in the event of lapse or policy surrender, and will reduce both the surrender value and death benefit.  Withdrawals may be subject to taxation with the first fifteen years of the contract. You should consult your tax advisor when considering taking a policy loan or withdrawal.

DOFU 8-2023