Do You Need Life Insurance As A Single Person?

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Life insurance is a risk protection mechanism to cushion the insured or their beneficiary against life’s adversities. The insurance type is popular with married people with families because they want to protect their dependents from cash constraints in the unfortunate event of their demise. However, life insurance does not only provide benefits for married people but is relevant for single people too.

Some benefits of life insurance beyond payments to dependents include - settling estate taxes, funeral expenses, charity donations, dividend payouts within the policy term, etc. Therefore, the notion that unmarried people or those without partners and families do not need life insurance is false.

Taking up a life policy means you have identified specific circumstances in your present or beyond your lifetime that would suffer a disadvantage due to the loss of your income. Such situations manifest with or without a partner. Insights on the value of life insurance for single people are as below.

Do Singles Need Life Insurance?

The simple answer to the query of singles needing life insurance is, yes, they do, like any other person. The essence of life insurance is to relieve others of a financial burden you would leave behind in case you pass on.

In addition, there are other benefits of life insurance you can enjoy when still alive depending on the type of policy you take up. The benefits include the following:



Retirement Payouts

Some life policies are for retirement payouts to a business owner. You may be an entrepreneur and envision retiring from business operations when you reach a particular age.

However, there is a need for an income to sustain yourself. You can take up a permanent insurance policy for retirement payments for the rest of your life after retiring from running the business.



Earning Interest Income

Some insurance policy contracts allow for cash payouts when you are still alive. Such is popular with a single-life premium policy which earns you a dividend payout. Such a policy enables you to prepare for the eventualities of suppressed income, probably due to commitments you made and anticipate they will interfere with your cash flow.

A single person may not have dependents to worry about in case they suddenly pass on, but expenses associated with post-death need attention. People in a family situation have others who probably take up bereavement responsibilities. However, in a singlehood situation, there may be no known person who can sort out things.


Calculating Assets

Funeral expenses are one such concern. For a decent send-off, a life insurance policy covers the funeral expenses. The cover varies and allows you to meet bills up to $25,000, depending on the type of contract. Other after-death expenses you may worry about include the costs of selling off your assets, continued contribution to charity, etc.

You may have a business, house, or other assets you leave behind with the instruction of selling them off. The sales process needs funding, e.g., legal costs, contracting, etc. Also, you may have been contributing to a charity cause and wish to bequeath them a lump sum if you pass on or continue with periodic contributions. The Life insurance policy enables such payments.



Breaking Down Coverage Levels

There is a wide variety of life insurance policies, and the onus is on you to select one that suits you best. Start by establishing your needs for a life policy and identify which one would be the best fit. Below are different types of life insurance in the US you can consider based on coverage:


Whole Life Insurance

The insurance covers you for your entire life. The policy has a cash value component that earns interest over time. You can access the cash payouts in your lifetime or borrow money against them. You will likely have unchanged premium payments your whole life, enabling you to budget better to maintain the policy.


Term Life Insurance

Term life insurance is just like it sounds, only lasting for a particular period. The period typically ranges from 10 to 30 years. At the end of the term, premium payments stop, and if you are still alive, there is no cash payout expectation.


For example, benefits to 20-year-term life insurance include payouts to beneficiaries in case you pass on within the 20 years of the policy term. You do not have a claim after 20 years unless you renew the policy.


Universal Life Insurance

This type of insurance is a mix between whole and term insurance. With universal insurance, you can obtain a policy cash value and still enjoy coverage benefits in your lifetime. Such a policy is popular with singles because they benefit during their lifetime and their beneficiaries after death.


Attain Peace of Mind

The best value in insurance is to provide peace of mind that comes from knowing you are cushioning yourself from the unknown in life.. You require that protection, single or married. What’s most important is to identify a solution that best suits your personal and unique circumstances and use that as the guide to choosing the right amount of insurance coverage. With or without dependants, it’s a fact of life that everyone is better off with a plan than without.