Life insurance is one of those things that lots of folks tend not to think about until they start creating a family or get a bit older. This is why you’ll find that most life insurance commercials tend to focus on these “target groups”.
Individuals who don’t necessarily fall into one of these two categories can be left thinking that they may not need to purchase a life insurance policy right now because nobody really depends upon them “financially,” and it’s not like they are going to die anytime soon!
For this reason…
We wanted to take a moment and list ten reasons why a single person may still want to purchase a life insurance policy for themselves even though conventional wisdom might say otherwise.
Top 10 Reasons Single People Should Buy Life Insurance
#1. Life insurance does have benefits for the “living insured”.
Most of the best life insurance companies offer additional living benefits, in some instances at no additional costs to you.
There are a variety of different living benefits (i.e. You can use while alive) available.
Disability income rider.
A disability income rider is an add-on available on life insurance policies that would allow the policyholder to receive a monthly payment if they were to be permanently disabled.
Terminal Illness Rider
One often included living benefit rider is the terminal illness rider, AKA accelerated death benefit rider.
This living benefit allows an insured to access the death benefit while they are still living if they meet the eligibility requirements set forth in the policy.
Critical Illness Rider.
A critical care rider would allow a living insured to collect a portion of his or her life insurance policy to pay for unexpected medical expenses that could arise due to a medical emergency in which one is expected to survive.
Examples of such emergencies may include suffering from a heart attack or a stroke, being diagnosed with cancer or suffering from some type of serious injury.
A Chronic illness rider.
If you are diagnosed with a qualifying chronic illness, the chronic illness rider allows you to have access to a portion of your death benefit.
Generally, the requirement set forth in the policy to qualify for this living benefit is the insured is unable to perform two out of six daily living activities (ADLs). ADLs includes eating, bathing, dressing, toileting, walking, and continence.
#2. Financial Strategies.
Owning a life insurance policy (particularly a whole life insurance policy) can allow an insured to utilize various financial strategies that can significantly benefit the insured while alive. Unfortunately, many of these “strategies” go beyond the scope of this article.
However, if interested in learning more about how a whole life insurance policy could be used as a financial “tool”, we would suggest that you read our article: Infinite Banking: Top 10 Pros and Cons which goes into great detail about how some individuals choose to use some whole life insurance policies as a way grow and manage wealth.
#3. Just because your “Single” now doesn’t mean you’ll always be single.
If and when you ever decide to purchase a life insurance policy, it’s important to understand that it will be something that you will need to be able to qualify for. Which means that just because you “can” qualify for a life insurance policy now while you are single, there is no guarantee that you will be able to qualify for coverage later on.
age is one of the biggest factors in determining what one will have to pay for their insurance, so if you choose to wait until you do become “married” or gain dependents, the cost of your life insurance then, as opposed to now, will likely be higher than what you would have to pay if you choose to purchase a life insurance policy today.
Not to mention the fact that it’s almost always easier to qualify for a no medical exam life insurance policy while you’re young and healthy so this may be another factor that you’ll want to consider as well.
#4. Are you sure you don’t have any dependents?
It’s not all that uncommon for young single people to fail to realize that their death could potentially affect a lot of people around them financially. This is because in many situations, the debt that they “own” frequently doesn’t only belong to them.
Early on, as one finishes their schooling and begins developing “credit” of their own, it’s not all that unusual for a young single person to require a “co-signer” or “co-borrower” for many of their larger expenses.
Unfortunately, should our young single borrower die while these loans remain on the “books,” their co-borrower will likely remain responsible for these debts, which could significantly affect them financially.
Such debts may include:
- Credit card debt,
- Auto loans,
- Mortgages, and
- Privately held student loan debt.
#5. Not everyone is born into wealth.
In many families, adult children will find that their parents may become dependent upon them as they grow older. So, while you may not have any dependent children of your own, it’s quite possible that you may need to financially support someone else in your family, whether that be a parent or a sibling.
In cases like these…
Were you to pass away prematurely without a life insurance policy in place, it could be that this family member who is, or will ultimately become dependent upon you, will now be left on his or her own at a very vulnerable time in his or her life.
#6. Diagnosed early.
There are a variety of different pre-existing medical conditions which, on their own, may be insurable; however, when one or two of these “different” conditions coexist within the same applicant, that person will now be ineligible for coverage.
For this reason, if you have already been diagnosed with a pre-existing medical condition like:
You may want to purchase a life insurance policy in advance while you are still eligible for coverage before you find yourself adding additional health issues into the “mix”. Conditions such as:
#7. Genetic Disposition.
Along these same lines, if you know that your family has a predisposition for certain genetic disorders (such as breast cancer) that could make it difficult, if not impossible, for you to be able to purchase a life insurance policy later on in life, you may want to seriously consider purchasing a life insurance policy now while you still can.
Even if you are single and don’t necessarily believe that you need one right now, otherwise, you may end up waiting too late, and now you’ll be unable to qualify for coverage later on.
#8. Insurance policies as collateral.
Because insurance can be seen as an asset, it can also be used as collateral for business loans or for business partners’ buy-sell agreement policies.
So while you may not need to purchase a life insurance policy to protect a spouse or a child, you might need or want one to be able to leverage it for a loan or a partnership.
#9. Legacy building.
With this one, let’s just assume that you never marry or have a child (which isn’t necessarily a bad thing). For some, however, it does leave one feeling like maybe they didn’t leave their “mark” on this world. In cases like these, some single individuals may choose to purchase a life insurance policy and make the beneficiary of their policy their:
- Alma mater,
This way, they can know that they were able to make a difference in some way in their passing.
#10. Funeral Expenses.
OK, so let’s assume that the last nine reasons we have laid out on why a single person might want to purchase a life insurance policy haven’t convinced you that you need coverage. But it is important to remember that
“Dying may be free, but being cremated or buried isn’t!”
This means that unless your estate has around $10,000 in liquid assets to pay for your funeral, your friends and family may be the ones stuck with the bill, which is why even a small final expense or burial insurance policy may be ideal.
Because the last thing anyone wants…
is for family and friends to have to start a “Go Fund Me” page for you.
And there you have it…
Our Top 10 Reasons Why a Single Person may want to purchase a life insurance policy.
Now at the risk of sounding too confident, we here at IBUSA believe we have provided some pretty compelling reasons why a single person should purchase a life insurance policy on him or herself.
But let’s be honest, at the end of the day, whether or not someone “chooses” to purchase a life insurance policy will usually come down to affordability.
This is why…
We would encourage everyone to at least explore what it might cost before they immediately rule out the possibility of buying a life insurance policy because the truth is, life insurance has become significantly less expensive over the years, and you might be surprised at just how affordable it could be!