Nearly half of Americans don't have a life insurance policy — about 48% don't have coverage, according to a 2026 study from life insurance brokerage Choice Mutual.
Without coverage, families could face financial strains after the loss of a partner. After all, over half of people (51%) reported facing financial setbacks after losing a loved one, according to 2025 data from insurance company Western & Southern.
Life insurance's death benefit can not only be used for unexpected funeral expenses, but it can also cover things like day-to-day expenses, remaining mortgage balance or other debts, and the future cost of college for children.
What's more, it won't break your budget: A 20-year term life policy with a $500,000 death benefit costs under $20 a month for a healthy 30-year old, according to life insurance brokerage LifeStein.
If you're one of the many Americans who doesn't have life insurance, getting it could be a smart and affordable way to protect your family. Below, we look at four key reasons it should be a part of your financial plan.
4 key reasons to get life insurance
- 1. Protect your family
- 2. Earn cash value and dividends
- 3. Leave an inheritance
- 4. Cover final expenses
1. Protect your family
If you were to die while your family was still dependent on your income, a life insurance policy can ensure they maintain their standard of living. The death benefit could help pay for daily expenses after the loss of your income. It could also help with things like mortgage payments, education and paying off other debts you might leave behind.
2. Earn cash value and dividends
Term life insurance policies tend to be the most affordable coverage, but they don't earn cash value that you can tap later in life.
Permanent life insurance policies, like whole or universal life, build cash value over time that grows tax-deferred. You can tap into that value while you're still alive to pay premiums, borrow against or make cash withdrawals.
Whole life insurance policies earn dividends, a portion of the insurer's profits that is returned to shareholders. Dividends are not guaranteed, but they can increase the value of your policy, reduce premiums or provide cash payments.
Northwestern Mutual, one of our top picks for whole life insurance, has a strong record of offering dividends, providing them every year since 1872.
- Highly rated for customer satisfaction
- Has paid dividends, though not guaranteed, annually since 1872
- Standalone long-term-care policy and rider available
- Can't buy policies online
- Customer service not available on weekends
3. Leave an inheritance
Life insurance can be an effective way to pass on wealth. Unlike other assets, the death benefit typically isn't taxable, so the entire amount goes directly to the beneficiaries you choose. A beneficiary can be any person or entity you choose — family members, friends and even trusts and charities.
Another benefit of transferring to a beneficiary is that the funds also skip the probate process, which can take a long time.
4. Cover final expenses
The median cost of a funeral is $6,280 with cremation and $8,300 with a burial, according to the National Funeral Directors Association's most recent data from 2023. Other options like cemetery upkeep can raise the cost even higher.
Burial insurance, also known as final expense insurance, is a whole life policy that covers burial, funeral and cremation, as well as outstanding medical and legal bills, estate fees and other end-of-life expenditures.
These are generally friendly to older applicants, with policies available to those up to age 80, and tend to be guaranteed acceptance, so even those with health issues can qualify. Payouts typically range from $10,000 to $30,000, depending on the company and plan you choose.
Transamerica Life Insurance
Cost
The best way to estimate your costs is to request a quote
Online quote for term policy
Yes
Policy highlights
Transamerica offers term life insurance, as well as whole, indexed universal and final expense policies. Term products offer coverage for those ages 18 to 80 for up to $10 million, with the option to skip the medical exam for policies under $2 million.
There are some exceptions for those who want higher limits. The Transamerica FE Express Solution, for example, pays out up to $50,000 with no medical exam required. Approval can take as little as 10 minutes and the plan's concierge service comes with free estate planning and assistance in filing legal documents and finding a funeral home.
Life insurance FAQs
How many kinds of life insurance are there?
While there are many permutations, there are five basic types of life insurance: Term life is fairly cheap but expires according to a preset timeline, while group policies are usually bought for employees or other larger groups and have limited benefits. Whole life remains active as long as you keep paying premiums and may earn a cash value, as can a universal life policy, which is tied to the market.
Lastly, a final expenses policy may be automatically approved with a death benefit big enough to pay for a funeral and other end-of-life costs.
How much does life insurance cost?
Life insurance costs vary based on your age, gender, health status, and the type of coverage you're considering. A 20-year term life policy with a $500,000 death benefit may cost under $20 a month for a healthy 30-year old, according to life insurance brokerage LifeStein.
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