When most people think about building a strong financial foundation, a few staples come to mind:
- An emergency savings fund
- A 401(k) with employer match
- A Roth IRA
- Maybe even some investing on the side
But life insurance? It’s often left out — and that could be a big mistake.
According to a recent study by New York Life, nearly half of Americans don’t consider insurance — including life and disability — as part of their overall financial plan. This trend is raising serious concern among financial advisors who say skipping this step could have long-term consequences for families.
“Wait… I Need Life Insurance Now?”
For many, the idea of needing life insurance today — especially if they’re young, healthy, or single — feels unnecessary. After all, if you’re not supporting anyone yet, why worry?
But Melissa Murphy Pavone, founder of Mindful Financial Partners, says this mindset is exactly why so many people get caught off guard.
“Most people think their employer’s life insurance is enough,” Pavone explains. “But usually it only covers one to two times your salary. That’s nowhere near what a family may need after losing a primary income.”
The Numbers Speak for Themselves
New York Life’s study asked participants to rate how strongly they believed that insurance is a necessary part of a financial plan. Only 23.5% strongly agreed. Shockingly, over 12% said insurance isn’t part of their plan at all.
Even more telling — a full 12.1% fell right in the middle, unsure whether they should prioritize it. That uncertainty, experts say, can be dangerous.
Why Insurance Needs to Be in Your Budget — Even If You’re Young
It’s easy to delay purchasing life insurance when you’re just starting out. But buying it young has two major advantages:
- Lower Premiums: You’re healthier now than you’ll ever be — and insurers know it.
- Protection While Building Wealth: If something happens before you build assets, your family is protected.
Plus, life insurance isn’t just about death — it’s about planning for the unexpected. Disability insurance can protect your income. Long-term care insurance can protect your retirement savings. And yes, life insurance and health insurance can ensure your loved ones aren’t burdened financially if the unthinkable happens.
Real Planning Means Preparing for What-Ifs
Many financial advisors say life insurance is just as essential as a savings account. Insurance related QnA
“It’s not a luxury — it’s a responsibility,” says Pavone. “If you love someone or owe someone, you need insurance.”
Ignoring life insurance because it feels awkward or unnecessary today can cost your family deeply tomorrow.