Do I need life insurance? A decision guide

The short answer

Ask yourself one question: if you died tomorrow, would anyone be financially worse off? If the answer is yes, whether that's a spouse who couldn't cover the mortgage alone, kids who'd lose your income, or a parent you support, you likely need life insurance. If truly no one would be financially affected, you may not need much, or any, at least for now.

Signs you probably need coverage

• You have a mortgage and someone else would be responsible for it, or would need to sell the home, if you died.
• You have kids who depend on your income, your caregiving, or both.
• You have a spouse or partner whose household budget assumes your income continues.
• You've co-signed a loan or debt with someone who can't easily cover it alone.
• You support a parent or family member financially.
• You own a business with a partner, and your death would create a financial gap for them.

If two or more of these apply to you, coverage is worth taking seriously, not as an emotional decision but as a practical one about who's left holding a bill.

Signs you may not need it, or not much

• You're single, with no dependents and no debt that anyone else would inherit.
• You have enough savings and assets to cover your own final expenses without leaving anyone in a hole.
• Your kids are grown, financially independent, and your spouse could manage on their own assets and income.
• You're retired with no dependents and your estate is already settled the way you want.

None of these are absolute. Someone with grown kids but a much younger second spouse, for example, might still want coverage. Use these as starting signals, not a final answer.

A quick way to size it up

If you land on "yes, I need it," the next question is how much. A simple starting method: add up debts you'd want cleared (mortgage, loans), plus a number of years of income you'd want replaced, plus any specific goals like a kid's education. A 40-year-old with a $400,000 mortgage, a spouse earning less, and two kids might reasonably land on $750,000 to $1,000,000 in coverage. Someone with no mortgage and no dependents might land on $0, or just enough to cover final expenses.

What it typically costs to close that gap

Term coverage is often more affordable than people assume, particularly when young and healthy. As an illustrative example, median standard rates from four fully underwritten Canadian insurers for $500,000 of 20-year term (Alberta, September 2026) run around $44 a month for a 40-year-old non-smoking man and about $33 for a woman the same age. These are estimates, your price depends on underwriting.

Common situations, quick answers

What if you're not sure yet

Not every situation sorts cleanly into "yes" or "no." A few grey areas worth thinking through on your own:

• You're planning to have kids soon: it's often cheaper to buy coverage now, while you're younger and presumably healthy, than to wait until after the fact.
• You're self-employed with no group benefits: you don't have the small employer top-up other people rely on, so your personal coverage is doing all the work.
• You've recently changed jobs and lost group coverage: the gap between leaving one employer's plan and getting personal coverage in place is exactly when something can go wrong.

In each of these, the safer default is to lock in coverage while you can, since price and eligibility both get harder with age and health changes, not easier.

What to do next

If this points you toward "yes," the next step is figuring out roughly what it costs for your age, which is life insurance worth it? covers in more depth. When you're ready to see real numbers, get a quote in a few minutes.

FAQ

About the author

Philip Setter has been a licensed life insurance advisor since 2014 and founded Affinity Life in 2020. He's a climber, ice climber and ski tourer based in Calgary.