Today we’re going to talk about whether you, a single person living your best life, should be worried about whether or not you have life insurance. We’re not going to go into details like ‘How much insurance do I need?’ or ‘Is life insurance taxable?‘ We’re going to talk about you and whether you should even bother talking to a life insurance agent. Ready? Let’s get started.
Advertising for life insurance is often filled with images of young families with small children. Much of the discussion on the topic centers on how best to safeguard your family’s prospects in the event of an unexpected death. As such, if you are single and have no kids, you may be inclined to believe that this type of policy is simply unnecessary. However, this is simply wrong.
The truth of the matter is that single people without kids may need life insurance for a number of different reasons. If you fall into this category, however, take heart in the fact that your policy can likely be smaller, and therefore, less expensive. If you are still confused as to why someone with no dependents might benefit from life insurance, keep reading.
Debt Repayment via Life Insurance
Certain types of debts, such as federally-held student loans, may go away once the borrower dies. However, if you previously received private student loans for which your parents co-signed, the scenario is altogether different. Upon your death, your parents will still be stuck for the remaining balance, provided they are still named on the loans. This is also the case for any other type of obligation that someone else co-signed, so it really is wise to have sufficient life insurance to pay the loan in the event of your death.
Even if there are outstanding debts for which only you are obligated, the creditors can make a claim against your estate, something which can prove cumbersome for whoever is handling your affairs. Given that term life insurance is very affordable, it makes good sense to make certain that your debts can be handled promptly if you die.
Support for Friends, Colleagues, and Loved Ones Left Behind
Though you may be childless, perhaps there is another person in your life relying on you for support. Perhaps this takes the form of a disabled sibling or elderly parents. If your long-term plan includes providing financial resources for such a person, make sure you have enough insurance to do just that, even if you are no longer around.
If you are a partner in a business enterprise, surely other people depend on your assistance to ensure that things run smoothly. It is critical that you have written provisions in place for how the business will continue in the event of a partner’s death. Such an arrangement may require that life insurance is in place to fulfill the objectives of the agreement.
While you have not yet started a family, perhaps you already know you will want to in the future. Purchasing life insurance while you are young and healthy is a great way to secure significant discounts on a baseline policy to which you can add when the need arises.
If you cohabitate with a significant other or even with close friends, your contributions to the household may be critical to their survival. Because of this, it may be worth considering purchasing enough life insurance to cover your portion of a lease and any other expenses you typically cover, just in case the unexpected happens.
Foresight for Final Expenses
Hereditary risk of disease may be another reason to put a life insurance policy in place while you are young. If you are currently healthy but have reason to believe you may fall seriously ill in the future, locking in coverage now will result in a much more affordable rate.
Bear in mind that even if you carry no debt, have no dependents, and wish to remain single, a small policy of life insurance is still a wise idea. If you die, your final expenses will still need to be paid by someone, and a minimum policy of between $10,000 and $25,000 is typically sufficient to meet this need so that your family will not have the added burden.
Financial Planning for the Savvy Single
No matter if you are single, child-free, and planning to live unfettered for the foreseeable future, life insurance is still something you should strongly consider. There are numerous online tools and policy aggregators that can help you determine exactly what kind of coverage makes sense and what you can afford.