Should Life Insurance Be Mandatory?

Let me first start by saying that I come from a viewpoint that we probably ought to legislate (control?) behavior less in our society. Less rules about how folks ought to live their lives, the better.

I believe we should own and be responsible for our actions and choices.

That said, there are some things I realize that are in place to help protect us and others from unforeseen events that are out of our control. This is one of the reasons that insurance serves an important purpose.

In most states (except for Virginia, Mississippi and New Hampshire), you are required to carry a minimum level of insurance on your vehicle. And, for good reason: one never knows when an accident could happen.

Those who defy the law and go without cost insurance companies over $2.5 billion per year. While these costs are picked up by the insurance providers, we all know that it ends up hitting us in the wallet / purse through higher premiums.

Until driver-less cars become the norm, accidents will happen. And, we'll need insurance.

The idea that car insurance is required by most states makes sense to me. Although, I'd love to see the costs of insuring be brought down (I think insurers make a killing off the insured), it is a valuable product for helping folks to avoid financial ruin in the event they have an incident.

Is Prince's death a wake-up call?

Prince article
Prince article in BusinessWeek

Last spring, I was startled to see news trickle out in my social media feeds that Prince had died. He wasn't very old – and his residency in Minnesota is something that many folks here take pride in. He definitely could have lived in a more glamorous and warmer climate – but had always remained loyal to the state.

After his death and more details were relayed about his life – I read reports that Prince didn't have a will. This was also quite a surprise to me. Even if Prince wasn't as keen on the importance of such matters, I would assume that his assistants or those helping him manage his wealth would have relayed to him the importance of having one in place. But, he didn't.

This is not to throw Prince under the bus. In fact, my wife and I are still in the process of finalizing our will after meeting with a lawyer. It's something that is easy to put aside and forget about, especially when you are younger.

Why life insurance is essential and should be mandatory

A case could be made that a will should be required. I also believe another strong case could also be made that many of us should be required to have life insurance.

Especially if you fall into one of these categories:

  • You're deep in debt
  • You have a family to support and/or
  • You're the sole wage earner for family

Here's my reasons for each:

  • Deep in debt. If you pass on and leave a mountain of debt behind with no means to pay for it – someone will have to eat that loss. And, while a lot of these debts are forgiven – some are not. It is a tragedy that those you leave behind may have to pick up your bill. You may not think that you're hurting anyone by leaving debt behind – but someone, somewhere is going to have to pay for that.
  • Family to support / sole breadwinner. I don't need to say much about this – but if you have others relying on your paycheck and not a lot of savings / assets to help support them if you were to pass, you are showing disrespect. By getting a life insurance policy, you will be able to help bless them if you were to die unexpectedly.

A few years ago, an acquaintance of my wife was killed when he got caught in the crossfires of a disgruntled worker's rampage. He was just going about his day, and became the victim of a senseless tragedy.

One of the things that touched me is this man had a life insurance policy in place that helped those he left behind. To me, it was like a blessing and a final gift to those he loved because he never got the chance to say good-bye.

To me, these final pay-outs can help settle debts, provide financial stability or gifts to those left behind.

I believe, life insurance should be mandatory.

What do you think? Should we require that everyone take out a life insurance policy? Why / why not?

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  1. NO. You alluded to the fact of mandatory “behaviors” in the beginning of the article. Yes, it is a sad thing that all people are not as responsible and that things go wrong. Are we to “legislate” every single behavior from cradle to grave? Is there no longer any personal responsibility? Most of the ideas of wills, life insurance, caring for your family-are things that are advertised on tv, talked about at jobs, churches, all manner of places. It is not a secret. It is every persons choice or responsibility to act in the best interest of themselves and the family. NOT for the government to again take over and make it a law for our own “best interests”.

    • Well put Deb. Thanks for your thoughts.

  2. I do not believe life insurance should be mandatory as I am in the 3rd quarter of my life and do not have any dependents. I checked into the price of term life insurance several years ago and it would cost my half my earnings every month.

    • Good point KG. Older we get, it becomes cost-prohibitive.

    • Everyone should have Whole Life to cover costs of funeral/final expenses (15-20k based on inflation) and during their working years they should have Term to serve as a readjustment income (face amount should be 5-10 years worth of income) for their family incase they were to unexpectedly die. I don’t think the government should regulate life insurance as mandatory but I believe that if one cares about their family’s well-being, one would see it as mandatory responsibility for themselves.

  3. No, life insurance shouldn’t be mandatory. People won’t be able to afford all the mandatory stuff. I am already struggling with car and home insurances.

    • Seems like expenses just keep piling up. This is why I think there should be some criteria before it is required (listed).

  4. Of course it shouldn’t be mandatory. Nobody should have to pay for something they don’t want. Car insurance is mandatory in many states so that whomever/whatever you injure/damage can be taken care of and is only mandatory if a person chooses to exercise their privilege to own/drive a vehicle.

    The right to life is just that – a right, not a privilege.

    Of course, it’s nice for a person’s family if they have a will, insurance, and just generally have their stuff together. Those things don’t have to be expensive, so I don’t think expense is an excuse not to have it. But if someone doesn’t want them, that’s their prerogative. You can’t force anybody into being a nice guy. So maybe it’s disrespectful to leave your family in the lurch after your death – but being disrespectful is hardly a crime.

    As far as the debts are concerned, I think it would make more sense to make debt illegal than to make life insurance mandatory. I mean, if we’re going to take extreme measures, why not go to the root of the problem?

    • Good points Rachel. Not a fan of legislating behavior either – but in this case, I can see a need for it as more and more go deeper into debt and those left behind are left to deal with the aftermath. The idea of making debt illegal isn’t too far fetched (and something I wouldn’t totally rule out in some instances). We had it back in the day.

  5. Oooh, this is a sticky one. I’ve been on the receiving end of this, too. My mom passed away suddenly 6 years ago and didn’t have a will or life insurance. It was a huge burden not only to pay for her funeral but to eliminate her debts.

    It would be nice if wills and life insurance were mandatory, but these things are expensive. Now that healthcare is mandatory, additional mandatory needs like these would be a huuuuge burden for families below the poverty line.

    So at the end of the day I don’t think it should be mandatory for that reason. But if you have people you care about and love, writing a will is the least you can do. Life insurance is extremely helpful too.

    • All good points MPP. I think even if you are of lower means, ever more the importance of having life insurance.

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