Do I Need Life Insurance?
Understanding What It Covers—and Whether It’s Right for You
Life insurance isn’t something most people enjoy thinking about. It forces us to consider situations we’d rather avoid. But the truth is, life insurance is less about you—and more about the people who rely on you.
The right cover can provide peace of mind that, if something were to happen to you, your family wouldn’t be left under financial pressure. Still, not everyone needs life insurance, and not everyone needs the same amount. So how do you know if it’s right for you?
Let’s break it down.
What Is Life Insurance?
Life insurance pays out a lump sum to your chosen beneficiary (like your spouse, children, or estate) if you pass away or are diagnosed with a terminal illness (with a life expectancy of 12 to 24 months, depending on the policy).
The payment can be used to:
- Pay off a mortgage or other debts
- Cover day-to-day living costs for your family
- Fund your children’s education
- Pay for final expenses
- Help your loved ones maintain their standard of living
It’s a safety net designed to protect your household when they no longer have your income or support.
Do You Actually Need Life Insurance?
Ask yourself this:
- Would someone be financially impacted if I were gone tomorrow?
- Do I have debts, like a mortgage, that would need to be paid?
- Would my family have enough money to cover living costs without my income?
If the answer to any of these is yes, life insurance is worth seriously considering.
Here’s a quick breakdown:
Life Situation | Is Life Insurance Worth Considering? |
Single, no dependants | Maybe not—but consider cover for debts and funeral costs |
Couple, no children | Possibly, especially if your partner relies on your income |
Couple with children | Very likely—your family could face serious financial stress without your income |
Mortgage holder | Yes—life insurance can clear debt if you pass away |
Business owner | Often yes—particularly if others rely on you for income or debt repayment |
Stay-at-home parent | Yes—replacing unpaid work like childcare or home duties costs money |
“But I Already Have Life Insurance Through Super…”
Many super funds include default life insurance, which is a good start—but it’s often not enough.
Default cover is usually based on age and account balance—not your actual financial needs. It may also reduce as you get older, just as your financial obligations increase.
We recommend reviewing how much you’re covered for and whether that amount would realistically support your family.
How Much Life Insurance Do I Need?
There’s no magic number—it depends on your situation. A financial adviser can help you work through a calculation based on:
- Your income
- Your existing debts
- Living costs for your family
- How long your family would need financial support
- Any savings or investments already in place
The goal is to make sure the people you care about can continue their lives without additional hardship.
What If I Don’t Qualify or Can’t Afford It?
Some policies (especially through super) offer automatic acceptance up to a certain amount, which can help if you have a pre-existing condition. And if cost is an issue, we can help tailor cover to fit your budget.
Remember: some cover is better than none, and it can often be adjusted over time as your life changes.
Final Thought
Life insurance isn’t for you—it’s for the people you leave behind.
If someone would be left struggling financially without you, it’s worth looking into. It’s not about fear or worst-case scenarios—it’s about being responsible and looking after the people who matter most.
Not sure if life insurance makes sense for you?
At Just Advice Financial Planning, we offer clear, commission-free guidance so you can make informed choices—without pressure.
Book a free chat today to find out what kind of cover (if any) is right for your life stage and goals.