Does Everyone Need Life Insurance?

Word count for this week's article:  383

Approximate time to read:  About 1.5 minutes



Does everyone need life insurance? That headline was the subject line of an email I received from AAA. Not surprisingly, since AAA offers life insurance through New York Life, the answer was yes, but I believe a more accurate answer is a bit more nuanced.

It really comes down to one’s definition of “need.” If one’s death would result in her dependents having to downsize, would that constitute need? One could argue both sides of that question.

What if a couple was sending their children to private school and the death of one of them would mean the children would have to transfer to public school, would that constitute need? Again, valid arguments could be made supporting both sides.

Because everyone has a different interpretation of the word need, maybe that is the wrong question to ask. I had a philosophy professor who was fond of saying “If you ask the wrong question, the answer doesn’t matter.”

Hopefully, we can agree that “Does everyone need life insurance?” is the wrong question. Who cares what everyone needs or doesn’t need? We need only concern ourselves with what we need or don’t need.   Or want or don’t want.

So because everyone has a different interpretation of the word need, it must follow that everybody doesn’t need life insurance. But that is very different from saying that everyone shouldn’t have life insurance. I’m not saying that everyone should have life insurance, because any generalization that broad will surely have exceptions.

Instead of positing the question in terms of need, perhaps it should be framed in terms of wants: Does everyone want life insurance? Well, certainly not if they have to pay for it! But free, well that's a different story.  I’ve never met anyone who told their employer they didn’t want the free group term life insurance tbat comes with the job.

When looked at it in terms of want, the two examples above could come down in favor of life insurance. A breadwinner could take the position that private school for his children is essential and therefore wants life insurance to guarantee that no matter what happens to him, it will be available. Another person could take the opposite position, so it’s not a matter of need, but a matter of want. And wants should be insured.