When Should Single People Get Life Insurance?


You know the typical market for life insurance: People with families to protect. When these people die, their life insurance policies make payments to their beneficiaries, whether that be their children or their spouse.

But what if you're single without children? Is buying a life insurance policy ever a smart move?

In most cases, no, you won't need life insurance if you don't have a spouse or any children who count on your income to pay for their daily living expenses. But as with most financial matters, there are exceptions.

Here are some of the most common reasons why a single adult without children might consider buying life insurance:

Policies Are Cheaper When You're Younger and Healthier

If you are a healthy and a nonsmoker, you'll pay less for life insurance when you are 24 than you will when you are 30, 35, or older. That's because you're at more of a risk to die.

According to Trusted Choice, an independent insurance agent, a 20-year-old male nonsmoker at a healthy weight would pay about $32.53 a month for a $500,000, 20-year term life insurance policy. That cost rises to $35.69 a month for that same healthy male at 35-years-old. And it soars to $111.38 a month when this same male reaches 50.

So, it might make financial sense to buy a life insurance policy when you are in your 20s. Then, when you do get married and have kids, you can change the beneficiaries on your policy to your spouse and children.

You Owe Money With Someone Else

Have your parents co-signed on an auto loan with you? Maybe they've co-signed for that mortgage loan that you are paying off each month. What happens to that debt if you should suddenly die? Your parents will be responsible for paying it off.

However, if you have a life insurance policy with your parents named as the beneficiary, they could use the payout from the policy to pay off the debt that they owed with you. Taking out life insurance in this case would serve as a form of protection for whoever was generous enough to take on the risk of co-signing a loan with you.

You're Providing Financial Support to Others

Just because you're not married and you don't have children, doesn't mean that you are not providing financial support to someone. Maybe an elderly parent lives with you and counts on your financial support each month. If you should unexpectedly die, what would happen to that parent? By naming that parent as a beneficiary, you can make sure that they are financially protected.

You might even be providing financial support to siblings, nieces, or nephews. The right life insurance policy can make sure that this support continues even after your death.

You Want to Leave a Gift

Maybe you simply want to leave a financial gift to someone who holds a special place in your life, even if this person doesn't really need your financial support. By naming that special person as a beneficiary — it could be a niece, nephew, partner, or friend — you'll be leaving behind something of great value should you die.

Term or Whole Life?

Once you've decided that you do want a life insurance policy, it's time to determine what kind of policy you want and how large of a policy you need. There are two main types of life insurance policies: the cheaper term life, and the more expensive whole life.

Term life insurance provides coverage for just a set period of time — usually 20 years — but can be bought for as little as one year, or as many as 30. Your premium will usually remain the same during the entire term. Whole life insurance instead lasts, as the name suggests, until you die. Whole life premiums also include an investment component, what is known as the policy's cash value. The cash value will grow during the life of your policy.

It's best to meet with a financial planner to determine which type of policy makes the most sense for you. A planner can provide recommendations, too, on how much insurance you should take out to meet your financial goals and how best to structure your policy so that you can provide the most financial protection to your beneficiaries if you should die.

Do you have life insurance?

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Guest's picture

In the section regarding, 'Leaving a Gift', this is also a great way to leave a Legacy Gift to a charitable organization that is important to you. In many cases your premium payments would also be considered tax deductible charitable gifts each year!

Guest's picture

Yes it is cheaper the younger that you are but by waiting, you are paying for a fewer number of years, so it should balance out.

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