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Does a Single Person Need Life Insurance?

August 30, 2022
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

If you’re single, with no dependents, and have money to pay off your debts and cover the cost of a funeral, then you don’t need life insurance. But this isn’t the situation for all single people.

7 Reasons Why Singles May Need Life Insurance

1. Life insurance can pay off your debts.

The majority of Americans have some kind of debt whether it’s student loans, a mortgage, or credit card debt.

Some debt is discharged at death, like federal student loans, but the majority of debt is not. If you die, creditors still want to be paid.

Let’s say you have private student loans that were co-signed by a family member. They would ultimately be responsible for that debt if you were to die.

If you own a home solely in your name, the home is passed onto a new owner by trust, will, or probate court. This person can choose to take over payments and live in the house, or take over payments just until it sells. Alternatively, the new heir can decide to let it be foreclosed on if they don’t want to take responsibility.

In any of these scenarios, life insurance could help make things easier. The life insurance death benefit can be used to help co-signers pay off loans. The death benefit can be used to pay off a mortgage.

» Learn more: How to Use Life Insurance to Cover Your Debt

2. Life insurance can pay for your funeral and end-of-life expenses.

End-of-life expenses are expenses your loved ones incur when you die. These expenses can include a funeral, burial, and medical bills.

Funerals cost on average between $7,000-$10,000. If you were to die unexpectedly, could your family afford this sudden bill?

And what if you end up in the hospital prior to death? Can your family afford to cover the out-of-pocket medical bills?

If you believe that your death could put any financial strain on your loved ones, then it’s a good idea to look into a term life insurance policy. They’re easy to buy and budget-friendly.

3. Life insurance can protect your partner, even if you’re not married.

More and more couples are living together, but waiting to get married. Living with someone means shared expenses. You may even own a house together.

Could your significant other afford your house or rent on their income alone if you were to die? What about all of your combined living expenses?

The death of a loved one is tragic, emotional, and stressful. The last thing you want is financial strain added on top of that. A life insurance policy can save the person you love from that added pressure.

» Learn more: Can I Buy Life Insurance on My Significant Other?

4. Life insurance is important if you support other family members.

If you’re single but supporting your parents, grandparents, siblings, or other loved ones, a life insurance policy could help provide for them if you were to pass away unexpectedly.

These loved ones depend on you and your financial support. They would be affected if you were to pass away. A life insurance policy would provide the needed funds to ensure they’re cared for and their standard of living goes unchanged.

Even pets are prompting single people to get life insurance so that Fido will be taken care of and not shipped off to an animal shelter to spend their days in a loud kennel, or worse, euthanized.

See what you’d pay for life insurance

Comparison shop prices on custom coverage amounts from the nation’s top carriers with Quotacy.

5. You can get life insurance now if you plan on having a family later.

Would you like your future to include children? If so, whether you hope for one, three, or five children, you will have a need for life insurance.

Along with having kids comes having many more expenses. Raising a child is not cheap.

Securing your life insurance policy before you have kids can be a great idea because as soon as children arrive, life gets busier. You can also lock in a great rate. The younger you are when you buy a life insurance policy, the cheaper it is.

$250,000 Term Life Insurance Policy with a 30-Year Term
AgeMaleFemale
25$17.36$14.55
30$18.07$15.52
35$20.82$17.91
40$28.11$22.91
*Monthly quotes for healthy non-smoking applicants

6. Life insurance is essential if you’re a business owner.

A small business owner has many reasons for life insurance. If you die unexpectedly, what happens to your business? Your employees?

You can buy a life insurance policy on yourself and name a co-owner or the business itself as the beneficiary. The death benefit can help keep your business running, even if you die suddenly.

If you need funding for your business, taking out a small business loan is common practice. However, lenders want collateral. They want to make sure they’re paid, even if something happens to you.

Lenders often gladly accept life insurance as collateral. For example, if you apply for a $250,000 SBA loan with a 30-year repayment schedule, you can buy a $250,000 term life insurance policy with a 30-year term and collaterally assign it to the lender.

» Learn more: Small Business Administration (SBA) Loans and Life Insurance

7. Buying a policy now may be wise if family members have significant health histories.

Some health conditions are hereditary. If you have an immediate family member who has been diagnosed with or died from a serious condition, such as cancer or heart disease, it can be more affordable for you long-term to buy a term life insurance policy now versus waiting.

Once a person’s health begins to decline, life insurance can become very expensive to buy. In some cases, you become uninsurable.

If you’re concerned you may not be able to qualify for life insurance in the future, look into it now.

Takeaway: If you have people depending on you, you definitely need life insurance. If you don’t, there are only a few cases in which life insurance makes sense.

Things to Consider When Buying Life Insurance at a Young Age

Your Insurability Limit

Depending on how young you are and where you’re at in life, you may not be able to buy a large life insurance policy right now. This is because the underwriter needs to confirm that you’re actually able to pay for the coverage you apply for before they’ll be willing to give it to you.

The maximum amount of life insurance you can have active on yourself at any given time is known as your insurability limit, and is determined based on your age and annual income.

This limit also means that you may not be able to purchase a large policy if you’re not working full time. For example, if you’re a student working part-time, you won’t be able to get approved for a $1,000,000 life insurance policy unless you have a strong financial argument to present to the underwriter, like a positive net worth or assets that you need to protect.

Smaller policies, like those within the $100,000 to $250,000 range, are much easier to purchase. Once you’re in the workforce and making money consistently, you can quickly begin to purchase larger policies if and when you need them.

Insurable Interest

Additionally, when you apply for a life insurance policy, you’ll need to choose a beneficiary, the person or people who will get the money if you pass away and your policy pays out.

As part of the buying process, you’ll likely need to justify your chosen beneficiary by explaining how they’d be impacted by your death. This is known as insurable interest.

If you’re naming your parents as beneficiaries, you likely won’t run into any issues when purchasing a small policy. However, if you’re naming a sibling or friend as the beneficiary of your policy, you’ll likely need to provide a reason that they would be impacted financially due to your death.

For a single person, naming a parent as your beneficiary is often the best move, since they will likely be the ones who will end up paying for your end-of-life expenses, like your funeral.

Even if you don’t need life insurance now, you probably will in the future. It’s easy to get term life insurance quotes online. Run some numbers to get an idea on how much it costs. It may be worth it to lock in a low rate now and be glad you already have coverage once you need it.

Unsure about how much life insurance you need? Check out our free and easy-to-use life insurance needs calculator.

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