4 signs you should already have life insurance, according to a financial planner

When you're young, life insurance probably isn't on your mind. But, if you have a family or people who depend on you, it should be.

Life insurance can help family or dependents replace your income or pay off debts if you die unexpectedly. For anyone who has someone counting on their income to survive — including children, a spouse, or even a parent — having life insurance is a must. 

"At the end of the day, it's income replacement," says Andrew Rosen, a financial planner. "If someone is tied to or reliant on your income and you don't have enough to provide what they're relying on forever, you need life insurance."

If you don't already have life insurance, there are four sure signs that you should, Rosen says. 

You have a family

If you have people depending on your income to make ends meet each month, you should probably already have life insurance. "You're a father, you're a mother, someone is dependent on you, but you don't have the funds already there. That's what insurance provides," says Rosen. 

For many families, it's a good idea to get life insurance coverage well before there's a baby on the way. It's cheaper to get coverage while you're still young, and waiting to buy coverage only makes it more expensive. 

Whether you buy now or later, parents almost always need life insurance. If it takes two incomes to raise your children the way you'd like to, life insurance is the best way to ensure they'll always have access to the money they need.

You've made plans with your spouse or partner that depend on both of your incomes

Even without children, having life insurance could still help protect your spouse. If your spouse or partner depends on having your income each month, you should have life insurance, even if they have their own income. 

Couples tend to plan for their financial goals together. Whether it's your retirement plans, a home you own together, or even your day-to-day living expenses that you cover with two incomes, protecting your spouse with life insurance is a must.

You earn an income

Rosen says that there are some instances where families have enough cash to support themselves without life insurance. "If I had $10 million in a bank, I may not need life insurance," he says. Especially when dealing with retirees who are living off of savings already, life insurance may not be essential. "If [one partner] died, it's sad, but it doesn't affect the fact that the money is there."

While a large cash cushion is one scenario where life insurance might not be necessary, it's not a common position to be in. For anyone earning a paycheck, income is still a consideration in how much life insurance to get. In general, the more income you earn, the more life insurance you should have. 

For the typical American family, life insurance just makes sense. "It's a very inexpensive way, generally speaking, to provide potential dollars that aren't there," Rosen says. With the average life insurance policy costing about $44 a month, it's an affordable way to make sure your family will be supported.

You own a home or have large debts

If you own a home, you should already have life insurance. The reason is simple: If you die while you own the home, someone will be responsible for it. 

"If you die, we'll still need to pay down this debt," he says. "Say I have a $500,000 mortgage ... we need assets to pay that off somehow. If my family's relying on my income to pay it, but [my income] stops tomorrow, where are they getting that money from?"

While homes can be sold, that could mean a move for your family in an already hard time. Life insurance could help prevent that. Your home's mortgage balance should be a consideration in how much life insurance you buy, along with your income. If anything happens, life insurance could help to pay off your home and help your family stay there without worry.

The same goes for other large debts — things like credit card debt and private student loan debt don't go away if someone dies. Generally, it means that someone else will become responsible for it. A co-signer or a spouse could be held responsible for this debt, but life insurance could help cover it.