Some single people without dependents may feel that life insurance is a waste of money. And in certain circumstances, it may not be a necessary purchase.
However, there are also times when simply being single doesn’t alleviate the need for a great life insurance policy. Here are 4 reasons why a single person could need life insurance and the types of policies to consider.
You Have a Co-Signer on Your Debt
If parents or another co-signer helped you take out a student loan or mortgage, they’d be on the hook for the unpaid debt if you passed away. But taking out a life insurance policy large enough to cover that debt means co-signers wouldn’t need to carry that burden.
You’re Financially Supporting Dependents
You may be single and not have children, but have financial obligations toward loved ones that aren’t biological children, like siblings or parents. If you’re actively caring for aging or disabled loved ones or are paying for someone to do so, your death could have a negative financial impact. Taking out a term life insurance policy means loved ones can continue to be cared for, even if you’re not the one doing it.
You Have a Business Partner
If you’re part of a company where you took out a small business loan, a life insurance policy is a logical move. In fact, you may have been required to take out a policy as part of securing the loan. That’s because your death could have outsized negative impacts for the remaining partner (or partners). But having a life insurance policy in place can give other partners time to decide how to move forward without you.
You Want to Cover Burial Expenses
Some single people don’t have any debt or dependents, but they still don’t want to burden family members with needing to cover the cost of a funeral. Luckily, many employers offer small life insurance policies that can be used for just that. But taking out a larger policy on your own may mean you can get more coverage that can extend beyond funeral expenses to cover a potential hospital stay or terminal diagnosis. A whole life insurance policy can offer a life-long, permanent death benefit, as well as being a useful financial tool throughout your life.
The Bottom Line
As a healthy, young, single person, you may feel life insurance is unnecessary. But there are solid cases for it if your death could cause financial hardship on someone else. If you’re a co-signer of debt, financially support dependents, have a business partner, or simply want to cover burial expenses, a term or whole life insurance policy may be worth considering.