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What happens if you don’t have life insurance?

How about you? Do you need life insurance? In this article, we’ll explore the questions you should ask yourself before you decide to go without it.
August 9, 2023
3 min read
What happens if you don’t have life insurance?

Only about 52%1 of Americans have life insurance. That leaves a lot of people who either haven’t gotten around to getting coverage or decided they don’t need it.

If you're asking yourself, "do I need life insurance?", then keep reading to discover situations in which life insurance becomes a necessity.


Who will pay for my funeral and final arrangements?  

Final expenses are a fact of life. And of death. Funerals, burials, cremations all cost money. In 2021, the median cost of a funeral with a viewing and burial was approximately $7,848.2 Depending on your final wishes, it could come to much more, especially if you would like your resting place to be in a different state or country. 

If you haven’t saved money for that purpose, your loved ones may have to foot the bill. That can be a challenge these days, when statistics show 37%3 of Americans don’t have $400 available for an emergency. Loved ones might have to take out a loan or arrange a payment plan with the funeral home, or even launch a crowdfunding campaign. If no one steps forward to pay, it’s possible the coroner’s office will bury or cremate you without a family service.

One of the main reasons people buy life insurance is to help spare already grieving loved ones the stress of coming up with money they might not have. A life policy could help cover the expenses for funerals, burials, and/or cremation.


Will out-of-town loved ones be able to afford the trip to my service?

Are you counting on having loved ones travel to your service? Many families are spread throughout the country or the world. Often people want to be there, but the cost of travel and accommodations makes it a challenge. If you have money set aside for their travel expenses, great. If not, a life insurance policy could help reimburse the people dearest to you for those costs. 


Who will pay for my end-of-life care? 

Often families are left with big medical bills after a loved one dies. If you haven’t left the money to cover the costs of your care, they may inherit that debt. A life insurance policy can help provide some or all the money needed to cover these expenses.


Will someone be hurt financially by my loss?

In this era of two-income families, the loss of your income could put a strain on a spouse or partner. It could cause even greater financial hardship for those financially dependent on you. In addition to children, those persons could include dependent parents. Helping to protect the financial future of loved ones is another key reason why people take out life insurance policies.


Will I have estate taxes?

If you have a large estate, and that estate is taxable, your survivors might be responsible for paying estate taxes.


Do I need life insurance?

Making our loved ones struggle to pay for our final arrangements and obligations is not the legacy most of us want to leave. There are people who have saved up enough money to cover all the potential needs discussed above. Many either have no children or children who are financially self-sufficient. With few or no debts, no dependents, and a healthy nest egg saved up, life insurance might not be necessary. But don’t decide to go that route until you take a close look at what your passing would mean financially to your family. If you don’t have money saved up for after you’re gone, you may want to consider a life policy big enough to cover your needs.


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