Should You Get Life Insurance If You’re Single?

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The typical advertisement for life insurance seems to always feature a smiling family together enjoying themselves, without a care in the world. It leaves the viewer with the message that they should buy life insurance and have the peace of mind that their family’s financial future will be secure if they’re no longer in the picture.

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That makes sense if you can identify with the adults in the ad because your paycheck is needed to keep your family well fed, well educated, and living in their own home. As the insurance companies say, “We’ll keep the paychecks coming when you don’t.”

If you’re single, you might not be able to relate to these messages. You could be living out on your own, self-sufficient, gainfully employed, and in excellent health. So why could you possibly need life insurance protection?

Maybe you’ll need it someday when you have a family of your own, but now? That’s a good question that you should be asking yourself if you’re single and are diligent about having your financial house in order.

7 Situations That Call For Life Insurance For a Single Person

Single adults do buy life insurance. Whether it’s because of a parent’s advice, a financial advisor’s recommendation, or books on money management, some single people feel the need to have life insurance. 

There are situations in life that call for a single person to own a life insurance policy. Here are seven of them.

1. You have co-signers on your personal debt

When single people are asked about the debt they're carrying, they’ll most often refer to their student loan debt. They’re not alone.

According to Student Loan Hero, there are currently 44.7 million Americans with student loan debt, amounting to over $1.7 trillion owed. If a student borrowed money under a federal student loan, the debt indeed disappears when they die. But that’s not the case with private student loans, which many students take out because the borrowing limits on federal student loans prevent them from borrowing as much as they need to pay colleges costs.

If your parents co-signed your private student loan, they will have to pay back the loan balance if you die before the loan is paid back in full. Instead of saddling your parents with large debt when they’re very likely saving for their retirement, a life insurance policy will provide them with the money to pay off your student loan if you die. 

And that applies to any other type of debt you’ve accumulated with a co-signer, such as a mortgage, jointly owned credit card, or a car loan. Your co-signer would be very grateful if you thought enough of them to buy a life insurance policy to pay off the balances.

2. Someone depends on you for their future

Aging parents? Disabled sibling? It could be any number of people or situations that leave you with someone dependent on you financially for their future needs.

For example, home health care, where an aide helps adults remain at home instead of going to a nursing home or assisted living facility, can cost upwards of $40,000 per year per adult. 

You might need the assistance of a financial advisor or professional life insurance agent to help you find a life insurance policy that is affordable and will meet the future needs of your loved ones. Ask friends for a referral or find a Certified Financial Planner online.

3. You have business partners

If you own a business and have partners, each of you will be affected financially when one of the partners dies. A “buy-sell agreement” drafted by an attorney can avoid a long, drawn-out legal battle when a partner passes away.

A buy-sell agreement funded by life insurance allows partners to pay the survivors of the partner that died a sum of money equal to that partner’s share of the business. 

So if you have a partner and you own 50% of a business worth $1 million, the life insurance policy will pay $500,000 to the deceased partner’s estate, and the surviving partner will own the business 100% and not have unqualified or unwanted business partners.

4. You might want to have kids in the future

If you think you might want young ones someday, the time to buy life insurance is before you have them. If possible, you always want to purchase life insurance when you’re younger and healthy.

That way, you can buy a larger death benefit at a lower cost than if you wait. If you’re in your 20s, you’ll find a 30-year term life policy to be very affordable.

5. You live with a significant other or roommates

Does your financial contribution keep the household running? A life insurance policy can replace your contribution and take a lot of pressure off the person or people you live with if you die.

You don’t need to buy enough life insurance to provide them with income for the next 10 years; enough to pay your share of the rent for the remainder of a lease is adequate.

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6. Your family’s health history isn’t favorable 

Many diseases and disorders are hereditary. For example, if your parents and their parents had diabetes or heart disease, you’re at a much higher risk of having the same conditions.

Buying life insurance while you’re healthy and can still qualify medically is a wise move. You’ll have peace of mind knowing that if you are married and have a family when you’re older, your loved ones will have the financial security you want them to have.

7. Someone is going to need to pay your final expenses

Another reason why life insurance is important for any single person is that if you don’t leave money behind for your funeral, cremation, burial, and other final expenses, someone you care about will have to assume the responsibility for those costs. 

Final expenses can easily exceed $10,000. To help cover these expenses when you die, a small term life insurance policy of $10,000 to $25,000 is inexpensive. It can save someone else from having to come up with a lump sum of cash at what may be a very difficult time for them emotionally. 

It doesn’t take long to apply for and get approved for a life insurance policy when you’re young and single. You may not even need any type of medical exam when you apply.

Situations Where a Single Person May Not Need Life Insurance

Life insurance companies and their agents will not tell you this, but not every single person needs life insurance. Most do, but not all.

Let’s look at an example. Jane is a 24-year old female. She works as a project manager for a large consulting firm that implements financial software. Her income is $80,000 per year, and she lives alone in an apartment building, with her rent being very affordable for her.

Jane has no student debt other than some federal loans, but she had no co-signers for any private student loans. She also has $22,000 in her savings account, $8,000 in an IRA, and no credit card balances. Her family members are all in good health.

Does Jane need life insurance? Let’s examine the evidence:

  • Her federal student loan won’t need to be paid off when she dies
  • She’s not leaving behind an unpaid mortgage
  • She has no roommates that will be stuck with her share of monthly rent and expenses
  • She has enough money in savings that family members could use to pay all of her final expenses

Based on this picture, Jane has no pressing need for life insurance. However, if one of the conditions shown above changes, it will be a different story.

What are Good Alternatives to Life Insurance For a Single Person?

There are two alternatives that single people have to negate their need to buy life insurance:

  • Savings
  • Investments

In Jane’s situation, the money she had in her savings account and her IRA were more than enough to pay for her final expenses and even leave some extra money behind for family, friends, or charity.

Frequently Asked Questions: Life Insurance For a Single Person 

These are a few questions that are typically on the minds of single people when thinking about life insurance:

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Is it OK to live without life insurance?

It is certainly OK; there’s no need to feel guilty about it. Maybe you can’t afford it right now, or perhaps your health prevents you from getting approved for coverage.

Not all single people have life insurance. Yes, you will feel relieved by having it, and you want to apply for a policy as soon as you can. But you can still be considered a financially responsible adult if you don’t have life insurance.

Should divorced people without kids have life insurance?

If you’re divorced and have no kids, you qualify as single! Unless you would like to leave money behind for your ex-spouse, or you have any of the other reasons to buy life insurance that we looked at earlier, there’s nothing that says you must have life insurance.

Consider your entire situation; don’t let family, friends, or the media talk you into buying something you don’t need. The decision is entirely up to you.

How do you pick a life insurance beneficiary if you’re single?

Your selection of a beneficiary will depend on who will be negatively impacted financially when you die. 

Are your parents going to be held responsible for a loan they co-signed for you? Then, it would be fair to have them be the beneficiary. 

Are you a co-owner of a business that you’d like to carry on when you die for the benefit of your family and employees? Your business partner should be the beneficiary.

But remember, you can own more than one life insurance policy and have policies with different beneficiaries to meet different needs.

Life Is Uncertain 

If you’re single and on the fence about having life insurance, consider that life can change in the blink of an eye.

If you’re like Jane, who had perfect financial circumstances, you’re an exception to the rule. If you don’t have enough cash to take care of your financial obligations, seriously consider buying life insurance for the benefit of others. It’s an unselfish thing to do, and people will see your act as one of kindness and generosity.

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