Why Single People Need Life Insurance
by Amanda Austin |
Many people wonder if single people need life insurance.
It’s easy to believe the answer is “no.” After all, the main purpose of life insurance is to provide cash to your family if you were to pass away. So it seems logical to think you don’t need life insurance if a spouse or kids aren’t depending on your earnings.
However, there are definite times when single people need life insurance. Here are some of the most common reasons to consider life insurance if you’re flying solo.
7 Reasons Why Single People Need Life Insurance
You have debt.
Not saddling others with debt is a major reason why single people need life insurance. This is typically the case when there’s a cosigner on your loan or when you share a mortgage with a friend, relative or someone else.
Private student loans can be especially burdensome to your cosigners. That’s because unlike federal loans, they aren’t discharged when you die. This could leave a cosigner like a parent on the hook for many thousands of dollars. Shared mortgages could also leave your fellow borrower in the same predicament.
An easy and affordable solution if you have debt like this is to get term life insurance. It will step in and pay off your portion of the loan if you were to pass away prematurely.
You have people who depend on you.
Just because you’re single doesn’t mean people don’t depend on you. Perhaps you’re a single parent with young children. Or you have aging parents or disabled siblings who rely on you. If anyone counts on your income to make ends meet, you almost certainly need some form of life insurance.
You own a business.
In most cases, the financial institution that issues your business loan will require you to have life insurance. That’s to ensure they get their money back if you die before the loan is paid off.
Life insurance is also needed when you have a business partner. Your death will probably leave the business in a lurch. Fortunately, there’s special insurance known as “key person” insurance that can help keep the business afloat in the event of your untimely passing.
You want to pay for final expenses.
Did you know that a funeral can easily cost more than $10,000? (The FTC outlines out all the costs of a funeral in case you’re curious.)
A potential five-figure price tag for a proper burial is a big reason why single people need life insurance. Without it, your friends and family will be on the line to cover those costs. (Or you might not have the send off you would want.)
You want to grow your wealth.
Life insurance isn’t just there to take care of things if you’re not around. It can also benefit you while you’re living if you have permanent life insurance.
Permanent life insurance gives you a death benefit while also accumulating cash value on a tax-deferred basis. You can use that accumulated cash to increase your personal wealth or to buy a home, supplement your retirement income, cover an emergency expense and more.
You want to lock in coverage while you’re young and healthy.
Your health affects whether you get life insurance and how much you pay for it. Generally speaking, younger people in better health have an easier time getting life insurance. They also usually pay less for it.
For these reasons, it’s often a good idea to lock in coverage at an affordable rate when you’re young and healthy. If you wait until you develop a health condition, it can be difficult (if not impossible) to get life insurance coverage. This can be tough news to swallow if you have a partner or children depending on you by that time.
You want to leave a legacy.
Leaving money to a beloved school, religious organization, charity or person is another reason why single people need life insurance. Some or all of the policy’s proceeds could help further a mission near and dear to your heart. It could also help someone realize their dreams if you choose to give the money to someone you care about.
These scenarios show why single people need life insurance. If any one resonates with you, show yourself some love by talking to an insurance professional about your options.
We have helpful information on how to choose a qualified insurance professional. And you can easily find one in your area by using our Agent Locator.
Amanda Austin is a freelance writer who has worked in the insurance industry. She lives in Erie, Penn., and holds the CPCU, AINS, and AIS designations.