Best Individual Life Insurance: Needed If You’re Single and Childless?

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If you're single and don't have any children, you might not need individual life insurance. Because no one relies on your income to live.

But what if you're thinking, “I'm planning to have a family one day. What if my health deteriorates before then? Isn't it cheaper to buy life insurance now?" Read on to learn more about the life insurance needs of a single person and if it's worth investing in a policy in your situation.

Is life insurance worth it if you're single?

Is life insurance worth it if you're single? Life insurance might not be worth it for you right now. Buying coverage before you 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 if you don't need the coverage today, you might consider using the money you'd spend on insurance premiums to contribute to retirement savings or build an emergency fund instead.

Generally speaking, for most single people, we suggest saving your money for now and returning to us when you're married or have children. There's no benefit to putting the cart before the horse by buying a life insurance policy when you're single and have no children, especially when you can put that money to other uses that still support your financial goals.

What about buying just a small life insurance if you're single?

If you don't have dependents, we don't typically recommend buying a small, individual life insurance policy.

You understand that you don't need a substantial life insurance policy when you're single, but what about buying a small policy today just in case you get sick in the future?  

For most people, this trade-off doesn't make sense financially. And it can affect your ability to save for retirement. It's best to wait until you have a partner or children who rely on you financially, then take out a term life policy that'll cover you when they rely on you the most.

If you're ready to shop for an affordable term life policy; PolicyMe has some of the most affordable rates in Canada, so you can pay for a policy while saving and investing at the same time.

Should you get individual life insurance if you have debts?

Debts should not impact your individual life insurance needs when you're single and childless, because 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.)

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?

Some debts can pass on to a spouse or your estate but not to other immediate family members. So, if you're single, no one will inherit your debts after you pass away.

Do you need life insurance if you are single and 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 pass away. 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.

When should you buy individual life insurance?

You should buy individual life insurance as soon as someone relies on you financially. if you’re single and don’t have kids or aging parents, it's likely you don't need life insurance. This is because if you pass away, the loss of income wouldn't affect anyone financially.

When you have dependents and you're young and healthy, it's easy to think you can save cash by delaying buying a life insurance policy until you're older. Unfortunately, there's no crystal ball and you never know for sure what the next few years have in store. Maybe a health scare!

Also, remember that life insurance rates increase as you age, even if you stay healthy.

Getting a life insurance quote as soon as you need it will help you lock in your monthly premium at a younger age and potentially save money throughout the policy's term. 

What types of individual life insurance policies are available?

You can choose from a range of life insurance policy types, with each having its own benefits and drawbacks. 

The two most common types of life insurance policies are term life insurance and permanent life insurance. Let's explore these two types of insurance and their benefits to find out what type of life insurance is best for you. 

Permanent life insurance for individuals

Permanent life insurance covers you for your entire life, as long as you continue making the required premium payments. This policy guarantees your beneficiary receives your death benefit.

This policy puts the insurance company on the hook for paying out your death benefit at some point, even after you've reached your golden years and the chances of passing away increase significantly. It's this added risk that makes a permanent life insurance policy (commonly whole life) much more expensive than term life insurance (up to 15-20x more expensive!).

On the other side of the equation, permanent coverage gives you lifelong financial protection at a fixed premium. It can also work as an investment vehicle with its cash value attribute. But most individuals are better off saving on the premium and investing that difference in other, more profitable areas.

Unless you are a wealthy individual who needs a permanent policy to help with estate taxes and other post-life expenses, it's likely you won't need this lifelong coverage. Instead, you’re probably better off getting term insurance.

Term life insurance for individuals

What is term life insurance coverage and how does term life insurance work? Term life insurance is a type of policy that covers you with a death benefit for a fixed period of time. You only make monthly payments of premiums during your coverage period. 

A term life insurance policy offers coverage for a certain number of years (typically 10, 20 or 30 years). If you pass away during your policy term, the insurance company will pay your death benefit to your life insurance beneficiary. If your term expires, you will have the opportunity to take out a new policy for a new term, if needed.

Most people buy term life insurance because they only need coverage when they have dependents relying upon them financially. When you choose term life insurance, you're paying for coverage and peace of mind only for the years when you’ll actually need it, such as when you have dependents and other financial obligations, such as a mortgage payment, auto loans, credit card debt, student debt, or other outstanding debts.

Are you ready to see how much a term life policy might cost? Get a no obligation quote in minutes!

What should you look for in a good individual life insurance policy?

When shopping for your next life insurance policy, you should look for these signs that indicate a good policy option:

  • Price: In many cases, buying the cheapest item isn't always the best. With life insurance, things are different. Typically a lower-cost life insurance policy simply means one company is pricing its life insurance plan more aggressively than others, and we recommend going for the lowest-cost policy. 
  • Financial health: You want to make sure you're dealing with a quality company that'll be able to deliver your life insurance payout if you pass away. So always look at a company's financial health and choose one in the best shape. Fortunately, most life insurance companies in Canada are in great financial shape, so this shouldn't be a big issue. 
  • Digital application and documents: Today, receiving paper documents is tedious and unnecessary. So, finding an insurer that handles the application and documentation digitally is another thing to seek in a quality insurer. With an online application and electronic document delivery, you'll get insured far faster than mailing out hard documents. 

In summary: skip life insurance if you have no dependents

While life insurance is an important part of most people's financial life, it's not for everyone. If you're single and have no one depending on you financially, it might be best to skip the insurance policy and use the money you'd pay in premiums to pay off debt or save toward retirement.

Curious how much life insurance might cost you? Use our free, 0-commitment life insurance calculator tool.

FAQ: Is life insurance worth it if you’re single?

What is the difference between individual and group life insurance?

The difference between individual and group life insurance is that group life insurance is typically provided by an employer to their employees (also referred to as optional life insurance or employee life insurance).

An individual life insurance policy refers to a policy purchased for and by the individual. Psst, that's you!

Can a single person get life insurance?

A single person can get life insurance, however more often than not, it's not a necessary purchase for the average Canadian. Life insurance is a tool used to protect those who rely on you financially, in the event that you pass away.

If no one is currently relying on you financially, it might be a better idea to take the money you would spend on an individual life insurance policy and save or invest it!

Who should be my beneficiary if I'm are single?

You can technically name anyone as a beneficiary, whether you are single or not. But if you are single and childless, we recommend naming other family members as a beneficiary. For example: maybe your niece and nephew can use the lump sum payment as tuition. Or your sibling can use it as a down payment for a house.

You can also consider naming a charity as a beneficiary of your life insurance policy.

Laura McKay

COO & Co-Founder

About the Author

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