Life insurance is probably the last thing you want to think about in your 20s and 30s, but it is something that you should start thinking about and planning for.  

You might wonder: Why do I need life insurance? Do I need it or should I have it? 

The answers to these questions vary among individuals.   

If you are married, plan on getting married, having children, or have any liabilities that someone else would be responsible for upon your death, then it is likely you need life insurance.  Fortunately, term life insurance is a pretty affordable way to cover your insurance needs. 

Term life is a pretty straight forward insurance policy - it has no cash value and simply pays out the death benefit if the insured dies during the term for the policy.  For example, a $500,000 20 year policy will pay out $500,000 if the insured dies during the 20 year period (and has been making their premium payments each year!).  By far, this is the cheapest and most effective way to cover your insurance needs.

Now.  How to determine those needs?

This is what really varies among individuals.

If you were to pass away early, what would you leave behind?

A spouse? Children? A mortgage? Other debts?

How much life insurance do you need to “replace” your income?

What goals do you have that you would still want to fund?

Paying off the mortgage?  Paying for your children's college tuition?

Taking time to think through each of these questions is a good starting point for planning out your life insurance needs.  Working with a Financial Planner can help fine tune your plans and decrease the costs.