Why Is Life Insurance Worth It for a Single Person?

One question we often get asked is, “do single people need life insurance?”. Life insurance is predominantly seen as a tool to protect loved ones from financial burdens in the event of your death. But what if you don’t have dependents or you’re single? In fact, only 44% of Millennials were married in 2019, which is a significant shift from past generations according to the Pew Research Center. This shift and the common misconception that life insurance is only for those who are married with kids could potentially leave more adults without the financial protection that life insurance offers.

In reality, life insurance may be a smart move even if you’re flying solo. Whether you want to secure your financial future, protect your loved ones or plan ahead, we’ll explore how life insurance might fit into your life.

In What Circumstances Should You Consider Getting Life Insurance While You’re Single?

Even if it’s just you, there are smart reasons to consider life insurance. One of the compelling reasons to get life insurance now is that the younger you are, the lower the premium. Buying life insurance when you're young and healthy is a great benefit, rather than waiting when it will cost more. And when older potentially developing health conditions that could increase premium rates or even disqualify you.

Check out these scenarios to see if life insurance could be a fit for you:

You Have a Mortgage

If you own your home, a life insurance policy can be a huge help to whoever would inherit it should the unforeseen happen. It can help cover the remaining mortgage payments, so they’re not left to foot the bill. This can be especially helpful if someone else co-signed the mortgage with you, since they might not have planned to take on those payments. With term life insurance, you can choose coverage that lasts until your mortgage is paid off.

You’re a Single Parent

If you’re a single parent, you already manage a lot. A life insurance policy may help ease your mind when you’re thinking about your child’s future. It can provide financial security for your little one, covering costs ranging from daily expenses to college tuition if you should pass away.

You Have a Co-Signed Loan or Student Debt

According to data from Debt.org, Americans owe $1.55 trillion on vehicle loans and $1.6 trillion for student loans. And many of us have co-signers for these types of debts. A life insurance policy can be a proactive way to protect those who have supported you, so your co-signer won’t be left carrying the financial burden if something happens to you.

You Plan to Start a Family Someday

Even if you have no dependents and don’t have a family yet, it’s never too early to plan ahead. Plus, life insurance premiums are usually lower when you’re young and healthy. Locking in a policy now can save you money in the long run. Your future family will thank you!

You Own a Business

If you’re an entrepreneur, a life insurance policy can be a game-changer. By naming your partner(s) or the organization as beneficiaries, you can help keep things running smoothly even if you’re not around. Plus, the death benefit could be used to hire a successor, allow your partner(s) to buy out your shares or support your employees if the business needs a boost. Did someone say “Boss of the Year”?

You Want to Offset the Burden of Final Expenses

Thinking about final expenses can be a lot, but it’s an important part of planning. By having a life insurance policy, you can cover these costs and make sure your loved ones aren’t left holding the bill during a tough time. It’s a thoughtful way to ease their burden and give them one less thing to worry about.

You Want to Donate to Charity

Got a cause you’re passionate about? A life insurance policy can help you leave a lasting legacy. By naming a charity as your beneficiary, you can make a big impact and support the things you care about. It’s a great way to keep giving back and making a difference after you’re gone.

You Want to Provide for Your Pets

If you have animals, you know that your pets are just as much part of the family. But did you know your life insurance can help protect your furry friends, too? If something were to happen for you, life insurance can provide funds to cover your pet’s ongoing care, from food to medical expenses and grooming. Some life insurance policies also offer the option of setting up a pet trust, which could help make sure their designated caretaker has what they need to take care of them. Whether it's covering their medical bills or deciding where they go, you're making sure your pets stay happy and healthy even if you can't be there.

What Type of Life Insurance Policy Is Best for Singles?

Choosing the right life insurance policy can be tricky for anyone. Here’s a quick rundown of your options:

• Term Life Insurance: Provides flexible, affordable coverage for a specific period, usually 10 to 30 years. It’s generally more affordable than whole or permanent life insurance. Term life insurance typically provides the most amount of coverage for the lowest cost.
• Whole Life Insurance: Also known as permanent life insurance, this coverage lasts your entire life and provides a cash value feature that can grow over time as long as premiums are paid. Whole Life policies are typically purchased with lower coverage amounts, due to premiums being higher. They are often used to cover final expenses
• Accidental Death and Dismemberment Insurance (AD&D): Provides financial protection in case of death or disabling injury caused by qualifying accidents. It pays a benefit to you if you are alive and suffer a covered disabling injury or pays your beneficiary if you die as the result of a qualifying accident.

How Much Life Insurance Do You Need as a Single Person?

It really depends on your finances and what’s on your horizon. Think about your debts, future expenses and financial goals. A handy tip is to aim for coverage that’s 5 to 10 times your annual income. And if you want extra support, it can be a good idea to talk to a financial advisor who can help you nail down the perfect plan for you.

Life insurance isn’t just for families. As a single person, you can still benefit from the financial security it provides. Starting young can also mean lower premiums, making it more affordable to get coverage now rather than later. Plus, life insurance policies can adapt to your needs. It's a flexible way to stay prepared for the future, no matter what comes your way.