Life insurance is one thing people tend to avoid thinking about until it is too late. While there are many reasons people put off getting coverage, the most common one is because they do not think they need it at all. Life insurance is for everyone; it is not just for families with children and spouses.
If you are single and under 40, there are plenty of reasons why you should consider getting coverage. While life insurance for a single individual may not be as common as for other demographics, it is still important to know that you can get coverage if you are not married or don’t have children.
Why Singles Get Life Insurance
Life insurance is a pivotal part of your financial plan. It can help you protect the things you care about most in the event of your death. If you are single and childless, chances are other people depend on your income: parents, siblings, friends, and family members who rely on your financial support. Life insurance can help them through difficult times when they need it most.
In Canada, funeral costs can add up to $20,000. Your Life Insurance coverage can help cover these unexpected costs by providing a lump sum payment to help you cover funeral expenses and pay off your mortgage, credit card debt, or other outstanding loans. If you do not have an estate plan, this money can also help distribute funds according to your wishes.
Top 5 Benefits of Life Insurance for Singles
You may think you do not need it, but there are many reasons why a single person without kids should buy a policy. The fact is that no one knows when they will die or what their medical expenses will be in the event of an accident or illness. If you are a singleton, here are some reasons why it is wise to look into life insurance.
1. Money Management
Life Insurance is an investment. Permanent life insurance can help build your net worth by providing a stream of income for retirement, savings, or other purposes. You can use it as a savings or estate planning tool to fund future needs such as retirement or paying off debts.
A policy can help you manage your money when it comes time to pass on assets to heirs or beneficiaries after your death. If you have no dependents but still have debt or other financial obligations to pay, obtaining a policy is an excellent way to ensure these debts are paid by someone else if something happens.
2. Prepare for Unexpected Health Events
Life insurance with a Terminal Illness Benefit allows you to plan for these unexpected events by saving money for medical expenses, uncovered medical bills, and lost income due to illness or injury. It can also provide coverage if someone else needs long-term care or other services that their medical insurance does not cover.
When faced with an emergency, having money on hand can make all the difference in whether or not you have sufficient resources to get through tough times. For example, hospice care or home health aides may be necessary after a terminal illness or permanent disability diagnosis. By investing in life insurance, you are putting money aside for these moments.
3. Company Benefits and Retirement Plans
Many companies offer a certain amount of money in case of death, including your salary, pension, and company benefits. You can use this money for many things, but it is often a substitute for life insurance. If you have company-provided health insurance and other benefits through work, those may be lost if something happens to you.
If you are young and healthy, you will likely qualify for a good-value business owner life insurance. On the other hand, if you are a co-owner of a business with someone else, the other person would need to buy out your share for them to continue running the company. Term premiums are often tax-deductible. And since term policies do not have cash value, they are much less expensive than whole life policies.
4. Estate Planning
If you leave behind any assets when you die, like savings, property, or investment accounts, they could be vulnerable to creditors if there is no beneficiary listed on them. Life insurance can help protect those assets by paying out a death benefit to someone else in case something happens.
You may want to leave behind an inheritance for your nieces, nephews, or other living relatives. If you have no one else who will inherit from your estate, then buying a policy is a great way to ensure they will not be left out in the cold when you die. You may prefer to have your money go toward helping family members instead of going into probate court and being distributed among creditors.
5. Invest the Cash Value
Some people use the policy as an investment vehicle rather than just something that protects their families in the event of death. For example, if you plan on buying a home in the next few years but do not have enough money, getting life insurance could be an excellent way to build up some extra cash for this purpose over time.
Permanent life insurance includes whole, universal, and variable life policies. These policies last forever and may offer savings or investment accounts that allow you to build cash value over time (typically through premium payments).
How Much Life Insurance Do Singles Need?
If you are single and considering buying a home or paying for a college education, consider buying life insurance without dependents instead of depending on other people’s help. Life insurance without dependents is often less expensive than the traditional kind because it does not include any additional coverage for family members.
You can buy term life insurance policies that cover significant expenses like mortgage or tuition payments up to age 100 at reasonable rates. If you are single and childless, most experts recommend buying life insurance that covers at least ten times your annual salary. For example, if you earn $80,000 annually, you should buy a policy that pays $800,000 upon death (10 times $80,000).
Final Thoughts
When you are single, it is easy to think that life insurance is not something you need. After all, if you are single, there is no spouse or children to cover. However, this is a misconception. Life insurance can be a great way to protect your income and assets after you pass away.
It is also a flexible form of estate planning because it allows you to choose exactly how much coverage you want. You also decide who will benefit from it should something happen to you prematurely.
Learn more about Singleton Life Insurance options. Contact the professionals at Hometown Life Insurance.
External Links
- https://eirene.ca/blog/government-funeral-assistance-for-end-of-life-expenses
- https://www.forbes.com/uk/advisor/life-insurance/life-insurance-terminal-illness-benefit/
- https://www.sciencedirect.com/science/article/abs/pii/S2214635020300496
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