You may have friends with children or are aware that a married couple should have some level (a good level) of life insurance in case of premature death. However, as a single person, you may wonder if you need life insurance. You aren’t married and have no children, so really what is the need? No one relies on your income, right? In this article, we discuss the reasons why a single person needs life insurance.
Several Reasons Why A Single Person Needs Life Insurance
There are many singles who have no children. No one depends on their income, either. They have no financial obligations, only to themselves. Do you know any of them? Are you one of them?
Fact is, a single person, even with no dependents such as children, needs some amount of life insurance. Think about the following common scenarios. Do any of them apply to you?
- Do you provide support to another person or family member? For example, do you pay for your nephew’s school or college, routinely make gifts to family members, or partly take care of your aging parents? All of these scenarios require your time and investment, which will cease upon your death.
- Did you cosign a loan? Maybe you cosigned a student loan for your niece or nephew, or someone else? Upon your death, the loan servicer may require the borrower to pay the balance in full because the borrower no longer has a payment “safety net” i.e. you.
- Conversely, did someone cosign a loan to help you out? You need life insurance for the same reason as above.
- Likewise, did you take on any debt that will be passed on to a family member?
- Did a family member or friend help you with anything financially, which requires your payment back to them?
- At some point, you will die. That costs money. Have you prepaid your funeral and other end-of-life expenses? Life insurance is an easy and income tax-free way to ensure money is there. If you don’t, your surviving loved ones will have to pay some way. Do you want to burden them with that?
If A Single Person Needs Life Insurance, But Doesn’t Get It, What Happens?
The results could range from nothing to being disastrous for your surviving loved ones. While we are not estate lawyers, and the following should not be understood as legal advice, it does give a good overview.
- If you have a home mortgage with yourself on the deed, where the home is transferred to depends on your Will and other estate planning documents. If you don’t have the proper estate documents, your home and value will most likely be processed through probate. Is that what you want?
- Are you a business owner? Upon your death, the value of your business has to be transferred to SOMEONE. If there is no SOMEONE, then the value of your business will go through probate. If you did have someone lined up to take over your business, that person would have a tough time obtaining ownership through probate. Is that what you want?
- As mentioned earlier, we all will die someday. Do you want your loved ones to figure out the financial plan on your death while they are mourning. You could imagine the stress that comes with that. Is that what you want?
The list can go on and on.
Think of the repercussions of these scenarios. Life insurance can help solve the problems with these scenarios. If you don’t want to pursue using life insurance to solve these problematic scenarios, then at least inform your family and business partners why so there are no surprises upon your death.
What To Do Next
Hopefully, you can see that a single person needs life insurance. Maybe the need is not the amount a married couple with 3 children needs, but there can be some level of need. What should you do next? Take inventory of what you want, or need, your money to do upon your death. We outlined most of the scenarios above. The most common situation for a single person, and everyone, to prepare: your death. A simple policy, set up the correct way, will provide peace-of-mind to yourself and loved ones.
In conclusion, the decision you make is yours and yours alone. We hope this article showed you the ways a single person needs life insurance. Feel free to contact us to learn more. We at My Family Life Insurance have your best interest first and foremost. We hope, through our educational articles, you can see we truly care about you and your family.