Should You Buy Life Insurance if You Live Paycheck to Paycheck?

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You might struggle to afford life insurance if money is very tight. 

There are certain expenses in life you basically have no choice but to pay for. These include things like housing, food, transportation, and medication.

But what about life insurance? If you don’t have a policy in place, your loved ones could end up in a dire financial situation if you were to pass away unexpectedly.

But if you’re living paycheck to paycheck and are barely able to cover your basic expenses, you may not be able to afford life insurance. And in that case, waiting may be your best option.

You shouldn’t go hungry or take on costly debt to get life insurance

The purpose of life insurance is to protect your loved ones financially and make sure they can pay their bills in your absence. And it’s especially important to get life insurance if you’re the sole income earner in your household.

As such, it’s a good idea to prioritize life insurance over other expenses. That could mean canceling streaming services or even buying less expensive groceries in order to cover your premium costs.

But if you’re living paycheck to paycheck and truly have zero wiggle room in your budget for life insurance premiums, then buying coverage is something you might have to wait on. While life insurance is important, it’s not more important than putting a roof over your head and food on the table. And if given the choice between paying for life insurance premiums versus covering the cost of the medications you need to stay healthy, the latter should take priority.

Furthermore, you shouldn’t put yourself in a position where you’re forced to rack up costly debt just to carve out money for life insurance premiums. That could damage your finances.

A risk not worth taking

The whole purpose of getting life insurance is to make sure your loved ones have a means of paying their bills if you were to pass away. But if you can barely pay your bills now, and getting life insurance will compromise your ability to keep up with your current essential living costs, then you may be better off waiting to buy it.

If you purchase life insurance at a time when you really can’t afford it, you might quickly fall behind on your premiums, resulting in a loss of coverage. And that’s just a waste.

Instead, do your best to break free from the paycheck-to-paycheck cycle. That could mean reworking your budget, fighting for an overdue raise at work, or boosting your income with a side job.

Once you’re in a more stable place financially, it definitely pays to start shopping around for life insurance. Even if your circumstances improve, you may find that money is far from free-flowing for a while, so it pays to do your research and secure the coverage you need at the lowest possible cost. But until you get to that better place, you don’t want to add another expense to your plate that you could fall behind on.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

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