Do I Really Need Life Insurance? (29 Years Old, $100K/Year)

Question from Rasteb. Is there any reason for me to have life insurance? I'm 29, 100k a year income, but no dependents and only 30k in student loan debt. It seems like a waste since nobody relies on income for financial support. So I thought this was an interesting question. When should you need life insurance? So Rasteb, first let me give you the really good financial advisor disclaimer. We don't know your unique circumstances. We don't know you as a unique person. So we cannot give you specific advice as to whether you should or should not do something. So please do not misconstrue what we're about to say as specific advice for your situation. What we will say is, okay, when does it make sense to have life insurance? When is the point where you normally do that? And you already hit on it. The purpose for life insurance is if someone else, if other people are depending on your ability to generate wealth and create income, then you have an insurable need on your life. Now what's interesting is those people are not always just a spouse or not always just some children. Maybe you have a business partner and if something were to happen to you, there needs to be life insurance so that the business has continuity. Or maybe you're a key man, employer, a key employee for your company and it's needed for there to be capital resources should you not be there. So the first thing you have to assess is, is there an insurable need on my life? And then once I determine if it is there, do I need to do it? Now let me tell you what the insurance salesman will tell someone like me who's 29 with a great income and, oh, you know what? Hey, life insurance right now is going to be as cheap as it's ever going to be. It's going to be as cheap as ever. And right now, by the way, you're healthy. So right now, here's what you ought to do. You go buy your life insurance. You're going to get the absolute best health rating because you're super healthy because you're only 29 and it's going to be really, really inexpensive. So you go ahead and buy that life insurance, take the test, do the thing, lock in that low premium, get you a 30-year policy. And then when you need it, it's already there. Maybe that's the right answer for you. Maybe it's not the right answer for you. I do know just kind of like living around the life insurance world that I think the premium chains between ages 20 and 40 isn't really all that significant just based on mortality table. So I don't know that like when I see young people get like forced into life insurance prematurely because it's as cheap as it'll ever be and you're as healthy as you'll ever be. I don't know that there's a ton of merit in that argument. Well, I would love, it comes back to once again, the financial order of operations, go to moneyguy.com slash resources. And the fact that I know for a lot of people, now you shared that you're not married, you don't have children yet, but I think you might be surprised how much things change over the next decade. And there will be some insurable needs coming up, but right now you're in that phase where you don't have a lot of people and maybe even though you make a hundred grand, I know the government's going to take a good chunk of that with taxes. You're trying to get to 25% investments. There's going to be a lot of things pulling on your back pocket. You just need to prioritize where every dollar goes. And what I don't like about, especially when somebody sells permanent insurance to young people early is that there's just so many other things that are pulling at your cashflow that I would hate for you not to build the assets that are going to create wealth because you're focusing on something that may happen or may be needed. And it's just a little out of order. Here's the healthier way I think you look at it. And it sounds like he's on the right path. First, look around and see if you have a need. That's why Beau focused on, do you have somebody counting on your income? And is that need, if you do have a need, is this something that's going to go away over a period of time, let's say a term, because you'll be able to self-insure? Or is this something that's going to be permanent forever you'll have this need? And if that answer is it has a term, then maybe you ought to go look at term insurance where you're just paying for the coverage, a level premium for this specific need because you think you'll be able to self-insure afterwards. Or if this is something that will be here forever and you're worried that maybe you can't be underwritten in the future, then yes, there's a time and a place for permanent insurance. I think, unfortunately, what I see though is there are a lot of people sold permanent insurance that has a term need and that money could have been utilized to build wealth and other things, pay for the kids, pay for education, and it just gets misrepresented because that person is a hammer who's trying to hammer in screws, trying to hammer in fasteners, and anything else just because they have one product, one tool, and they think everybody ought to have it because guess what? They make a lot of money selling it. And just be careful with that. By the way, that's not a crap because I know I'll get some comments from some life insurance people who are watching this because they love our content too. I'm not picking on you because if you're doing it right, you're not offended by that because you also see it all around you that people are misusing these important tools and sending them to the wrong people and giving the bad advice is giving you a bad reputation. So help self-regulate and clean up your people too.