I Have No Debts and No Kids. Do I Still Need Life Insurance?

The quick answer? It depends.

You'll often hear that life insurance is something everyone needs. But there are limited exceptions to that rule. And if you're childless and have no debts, then you may be okay to skip out on getting life insurance.

But that's not automatically the case. Ultimately, there's one question you'll need to ask yourself to determine whether life insurance makes sense for you.

Will people in my life struggle financially in my absence?

The purpose of life insurance is to protect your loved ones from financial upheaval in the event of your passing. If you can say with certainty that no one in your life will struggle financially in your absence, then you can probably pass on getting life insurance. But to be clear, having no debts or kids doesn't automatically mean that life insurance isn't necessary.

Granted, a big reason many people sign up for life insurance is that they want to make sure their kids are taken care of in the event of their untimely passing. And often, people who have large joint debts with a spouse or partner buy life insurance so those debts can be paid off in their absence. For example, if two spouses have a mortgage loan together and require two incomes to keep up with that mortgage, life insurance becomes a necessity.

But maybe you have no kids, no debt (say, you've paid off your home, or you prefer to rent), and a spouse who's financially independent -- they have their own career, a great salary, and plenty of money in savings. In that case, you may decide not to buy life insurance and to do other things with your money -- such as invest it. That's not necessarily a terrible choice.

Look at the big picture

The decision to buy versus skip life insurance is a big one. Before you make that call, do a really thorough assessment of your situation to make sure you're choosing wisely.

It may be that you're not married, or that your spouse is financially independent, and you don't have any children. But what if you have a sibling who tends to rely on you for occasional financial support? In that case, buying a small life insurance policy and naming that sibling as its beneficiary could be a smart move -- and it may not cost you a lot.

Similarly, let's say you have aging parents you care for. You take them to doctor appointments, run their errands, and make sure their home is maintained. You may not provide them with financial support per se, but the help you give them will cost money to outsource to an aide. And so in that case, buying life insurance and designating your parents as your joint beneficiaries makes sense.

Remember, when it comes to life insurance, the question to ask is whether people in your life will struggle financially without you around. If the answer is yes to any degree, then a life insurance policy is worth acquiring -- even if it's a smaller policy with only a modest benefit.