What Motivates People to Buy Life Insurance?

Shawn Plummer

CEO, The Annuity Expert

Final/Funeral Expenses

One primary motivation for purchasing life insurance is to cover final expenses, including funeral costs. Funerals can be expensive, often ranging from several thousand to over ten thousand dollars. Life insurance can provide peace of mind, knowing these costs won’t burden family members.

Example: A policyholder might choose a plan that specifically covers funeral expenses, ensuring their family won’t have to worry about financial strains during a time of grief.

Income Replacement

Life insurance is often bought to replace income that would be lost with the death of a wage earner. This ensures that the policyholder’s dependents can maintain their standard of living.

Example: If a primary breadwinner passes away, a life insurance policy can provide ongoing income to cover daily living expenses, educational costs for children, or retirement savings for a surviving spouse.

Paying Off a Mortgage

Many people purchase life insurance to ensure their mortgage can be paid off in the event of their death. This can provide security to the family, knowing they can keep their home.

Example: A term life insurance policy might be set up to coincide with the length of a mortgage, ensuring that the home is paid off if the policyholder dies before the mortgage is fully repaid.

Starting a Family

The decision to start a family is another common reason for buying life insurance. Parents often want to ensure their children’s financial security, especially for costs like education and childcare.

Example: New parents might take out a life insurance policy that includes enough coverage to pay for their child’s education and other significant expenses through adulthood.

Life Insurance Purchase Motivations

MotivationPurposeExample Use Case
Final ExpensesCover funeral and burial costsPay for a funeral costing $10,000
Income ReplacementMaintain family’s standard of livingProvide monthly income for dependents
Mortgage PaymentEnsure family retains homePay off remaining mortgage balance
Starting a FamilySecure children’s financial futureFund children’s education and upbringing


Purchasing life insurance is a decision driven by the desire to provide financial security and peace of mind for one’s family. Whether it’s for covering final expenses, replacing income, settling a mortgage, or preparing for a new family, life insurance plays a crucial role in financial planning. Understanding these motivations can help in choosing the right policy for specific needs.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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