14 Jun Single and childless: Should you get life insurance?
In general, if you’re single and don’t have any children, you probably don’t need life insurance. Why? Because no one is relying on your income to live.
That seems simple enough, but here’s what you may be thinking: “I’m planning to have a family one day. What if my health deteriorates before then? Should I buy life insurance now before it gets too expensive or I get sick and become uninsurable? Do singles need life insurance?”
Buying coverage before you actually need it may seem like the best way to plan for the future (and to stop your mind from running through worst case scenarios at 3:00 a.m.). But the reality is that if you don’t need the coverage today, the money you would spend on insurance premiums could be better used to contribute to retirement savings or build an emergency fund. If you’re someone who avoids risk at all costs, you may disagree with us. However, for most people, our advice is this: save your money for now, and come back to us in a few years when you’re married or have children. In other words, there’s no need to put the cart before the horse.
Should I buy a small policy just in case?
You understand that you don’t need a substantial life insurance policy right now. But what about buying a small policy today just in case you get sick in the future? We know that you’ve grown up being told that you’re better off safe than sorry. But if you don’t have dependents, we don’t recommend buying a small policy either.
Why? Because it isn’t always easy to substantially increase your coverage when you need it down the road. Insurers will typically make you prove that you’re healthy before they’ll increase your coverage. If you get sick before you increase your coverage, you probably won’t be approved for the increase anyway. So if you really want to lock in a rate today and protect yourself against the chance that you may get sick, you’d have to shell out lots of money for an expensive policy that you don’t need right now. For most people, this trade-off doesn’t make sense financially. And it can significantly affect your ability to save for retirement.
What if I have debts?
Another topic our customers often bring up is debt. What if you have debts because you spent years in school or racked up high credit card bills? Should you get insurance to protect your family members from inheriting your debts?
Well, we have good news for you: Debts don’t pass on to siblings or parents. (You can breathe a sigh of relief now if you have a sibling who makes bad financial choices). Debts do pass on to a spouse but not to other immediate family members. This means that if you’re single, no one will inherit your debts after you die. So once again, there’s no need for you to get life insurance.
What if I have unique needs?
Although most people who are single and childless don’t need life insurance, you may have a unique need that requires you to have it. For example, perhaps you’re planning to donate to a charity after you die. Or maybe you’d like to cover your nieces’ and nephews’ university tuition.
You may even be paying for your parents’ assisted-living facility fees. If you have any expected future expenses like these, you may want to use life insurance to protect them. But if you don’t, we recommend against buying it right now. Enjoy premium-free life while you can!
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