What Is Life Insurance For—And When Don’t You Need It Anymore?
Will Raleigh – October 2025
Life insurance is often seen as a financial safety net—something that protects your family if you’re no longer around. But while it can be a vital part of financial planning, it’s not something everyone needs forever. Knowing the purpose of life insurance and when it may no longer serve that purpose is key to making smart decisions about your cover.
The Purpose of Life Insurance
At its core, life insurance is about protection. It provides a lump sum payment to your nominated beneficiaries in the event of your death. This money can be used to:
- Replace lost income for dependants
- Pay off a mortgage or other debts
- Cover children’s education costs
- Pay for funeral and other end-of-life expenses
- Provide financial stability during a difficult time
When You Do Need Life Insurance
Life insurance is extremely important for parents with dependent children and people with debts which exceed their asset base.
Generally, you should consider life insurance if:
- You have dependants who rely on your income
- You have significant debts
- You don’t have available money to pay for final expenses
When You May Not Need Life Insurance Anymore
Life insurance isn’t a forever product for everyone. As your circumstances change, you might find you no longer need the same level—or any—coverage. Here are common signs you may be ready to reduce or cancel your life insurance:
- Your children are financially independent: Once your kids have grown and are self-sufficient, your need to protect them financially diminishes.
- You’ve paid off your major debts: If your mortgage and loans are gone, the financial impact of your death is smaller.
- You’ve accumulated enough wealth: If your superannuation, savings, or investments are enough to support your spouse or dependants, insurance may be redundant.
- Your spouse has independent income: If your partner earns enough on their own, they may not need a payout to maintain their lifestyle.
- You’re on a fixed retirement income: Life insurance premiums can be costly in your later years, and if the benefit isn’t essential, it might be wiser to redirect those funds.
When to Review
The decision to cancel or adjust life insurance should never be made without some consideration. Instead, review your needs regularly—particularly after major life events like retirement, the sale of a home, or the passing of a spouse. Never cancel insurance without completing a health check with your GP to determine you are safe to do so.
If you’re unsure, speak with our insurance specialist, Will Raleigh, who can help assess whether your policy still fits your goals.