Life insurance is a financial tool that’s often associated with providing financial security for a family in the event of the insured’s person’s death. However, that’s not the only reason to purchase a policy. From there, a question arises: Should single individuals also consider purchasing life insurance? Traditionally, the idea of life insurance has been closely tied to familial responsibilities, but there are compelling reasons for single people to contemplate this decision as well.
Reasons to Consider Life Insurance
Financial Obligations: While it’s true that singles may not have immediate dependents, many individuals still have financial obligations that could impact others in the event of their passing. Outstanding debts, such as student loans or credit card balances, could become the responsibility of the deceased person’s estate. Life insurance can help cover these debts, ensuring that loved ones aren’t tasked with managing these costs.
Funeral Expenses: Even if someone is single, they likely have family and friends who may want to honor their memory. Funeral and burial expenses can be significant, and life insurance can provide the necessary funds to cover these costs. This can alleviate the financial strain on grieving loved ones during an already challenging time.
Locking in Low Premiums: One of the key factors in determining life insurance premiums is age. The younger and healthier you are, the lower your premiums are likely to be. Purchasing life insurance early, even when single, allows you to lock in lower rates. As age increases, so do the associated health risks, which can result in higher premiums. By securing life insurance early, you can potentially save money in the long run.
Future Planning: Life insurance can also play a crucial role in future financial planning. For singles who anticipate getting married or starting a family down the line, purchasing life insurance now can be a proactive step. It ensures that, regardless of changes in life circumstances, there is already a foundation of financial protection in place.
Business Ownership: Many single individuals are entrepreneurs or small business owners. In such cases, life insurance can be a valuable tool for business continuity. If a business owner passes away, life insurance proceeds can be used to settle debts, provide for the business’s transition, or even fund a buy-sell agreement among business partners.
Charitable Contributions: For those who are passionate about charitable causes, life insurance can be a means to leave a lasting impact. By designating a charity as a beneficiary, single individuals can support the causes they care about, even after they’re gone. This adds a philanthropic dimension to the decision to purchase life insurance.
Peace of Mind: Life is unpredictable, and unforeseen circumstances can occur at any time. Having life insurance in place provides a sense of security and peace of mind. It ensures that, regardless of relationship status, loved ones and beneficiaries can be taken care of financially.
Finding the Right Policy
There isn’t a right or wrong approach to buying an insurance policy. Much of it comes down to your needs and what works best for your financial plan. That’s where the different types of policies can influence your decision.
Term life insurance is a type of policy that covers you for a specified period, or term. It gives you extra financial protection for a period of years when you might need it most, such as while you’re raising kids or paying off student loans.
Permanent life insurance typically covers you until death, provided you continue paying your monthly premiums. They build a cash value as they age, with many of them earning interest over time. You can often use the cash value while you’re still alive, making them integral parts of some financial plans.
While the traditional narrative around life insurance often revolves around family and dependents, the reality is that single individuals also have financial responsibilities and considerations. Ultimately, the decision to buy life insurance as a single person is a personal one, but it’s worth considering the potential benefits and peace of mind it can provide in the face of life’s uncertainties.
Resource Links
“What Is Life Insurance and How Does It Work?” via Nerd Wallet
“Do I need life insurance?” via Progressive
“Do single people need life insurance?” via Progressive
“LIFE INSURANCE” via the National Association of Insurance Commissioners