Yeah, it’s true that most people who consider buying life insurance have families. After all, you want to make sure your dependents are taken care of should something happen. But what if you’re single?
The times they are a-changin’. People aren’t getting hitched like they used to, and the U.S. birth rate has reached a 30-year low as more and more people are opting to postpone parenthood, have less children, or live completely child-free altogether.
So, if you’re single, does that mean you don’t need life insurance?
Do Single People Need Life Insurance?
There are lots of reasons why someone might buy a life insurance policy, even if you don’t have a partner or family.
1. You Have Debt
If you have student loans, mortgage, business loans, credit cards, personal loans… any kind of debt, you may need a life insurance policy.
You might be thinking, ‘I don’t have a cosigner, so don’t the debts go away when I die?’ No. According to the Consumer Finance Protection Bureau (CFPB), your estate now owes the debt. Generally, no one is legally obligated to pay out of their own pocket for those debts — but there are some exceptions.
If you have a cosigner, authorized user on a credit card, or have a joint bank account, the other account holder will still owe the debt. Did your parents cosign a hefty student loan for you to go to law school? They’ll still be on the hook for that $200,000+ student debt if you were to pass away.
2. You Have People Who Depend on You
Just because you don’t have children doesn’t mean that people don’t count on you. If you have aging parents or siblings that have special needs, a life insurance policy can provide a safety net to help take care of them should something ever happen to you.
Designating a beneficiary on a life insurance policy is pretty simple. Generally speaking, if anyone in your life has an insurable interest — meaning that they would suffer a financial, emotional, or any other type of loss because of your death — you can name them as your beneficiary on your life insurance policy.
If several people depend on you, like both of your parents or multiple siblings, you can designate them all as primary beneficiaries and allocate the death benefit accordingly. The death benefit is the amount of coverage you elect when you buy the policy (between $50,000 and $1 Million if you’re a Bestow customer), and you can choose to split it equally or assign different percentages. It’s up to you.
3. You Own a Business
Do you have business loans and lines of credit? Much like reason numero uno, you wouldn’t want to leave your business partner on the hook for your business debt.
Think about what would happen to your business should you pass away unexpectedly. It might be time to make an appointment with a lawyer to draw up some documents and a contingency plan.
4. You Want to Plan Ahead
You might be young and healthy, but you’re not invincible. Life is unexpected, and should something happen to you, a life insurance policy can cover your funeral costs and any other end-of-life expenses — in addition to covering the scenarios above.
Even a $50,000 term life policy can provide some much-needed financial protection for those who would be handling your estate. For example, the cost of a funeral today ranges between $8,000 and $10,000. If you have any medical bills that might need to be paid, the death benefit can cover that, as well.
5. You Want to Lock In a Low Rate Now
You’re single now, but maybe you won’t be five years from now. Life insurance rates become more expensive as we age and our mortality risk increases (we don’t live forever… yet). If you’re young and healthy, you can buy a 10 or 20-year term life insurance policy at a low monthly rate and enough coverage to take care of all of the above.
For example, with Bestow, you can buy a term life insurance policy online for under $10 a month, without a medical exam. In fact, you can apply right now and if approved, be covered in just a few minutes.
While not every single person may need a life insurance policy, it’s important to take a hard look at your own circumstances to see if you need to cover your bases.