Single and Childless: Is Life Insurance Worth It if You’re Single?

Is life insurance worth it if you're single? 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 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?"

Continue reading 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 for a single person worth it?

Is life insurance worth it if you're single? 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 the reality is that if you don't need the coverage today, you could use the money you'd spend on insurance premiums to contribute to retirement savings or build an emergency fund instead.

If you're someone who avoids risk at all costs, you may not agree with this idea. However, 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.

Should you buy a little life insurance if you're single?

If you don't have dependents, we don't recommend buying a small 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? We know you've grown up being told that you're better off safe than sorry. But that's simply not the case with life insurance.

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 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.

It's best to wait until you have a spouse 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 can help you find the right coverage for you and your family.

What if you have debts?

Debts should not impact your 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. So once again, there's no need for you to get life insurance.

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. But if you don't, we recommend against buying it right now. Enjoy a premium-free life while you can! 

When should you buy individual life insurance? 

We've already established when it's not the right time to buy life insurance as an individual.

The rule of thumb is 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.

However, once someone begins to rely on you financially, this is a good time to secure a life insurance policy.

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.

Buying a policy as soon as you need it will help you lock in your monthly premium at a younger age and potentially save tons of 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

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. It’s just a matter of when they’ll get it.

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 much more expensive than term life insurance.

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. However, 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

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.

Term insurance also offers peace of mind that the policy payout will give your dependents an income replacement if you pass away that can cover burial expenses, everyday living expenses, and other expenses. 

Because your insurer isn't forced to also cover you in your older years, they’ll typically charge you much less for term insurance than for permanent insurance.

A term policy's downsides are its limited coverage period and its lack of a cash value option. However, you can take the life insurance premium savings that a term policy offers and invest in the stock market, a 401(k) or other traditional investment vehicles or retirement accounts, and likely see more returns than you would from the cash value part of a permanent policy. 

Are you ready to find the perfect term life policy for you and your family? You can shop for and compare affordable term insurance with PolicyMe.

What should you look for in a good 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: It's best to skip the life insurance if you're single

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's best to skip the insurance policy and use the money you'd pay in premiums to pay off debt or save toward retirement. Then, once you have people relying on you, get a term life policy to cover your family when they need it most. 

Follow our blog to stay connected with our company and track our progress as we make life insurance faster, easier, and (dare we say) more enjoyable to get. Our goal is to create a whole new insurance industry that puts its customers first, and we'd love your valued input and support to guide us on our journey.

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

When considering life insurance, many questions are likely flowing through your head. These are some of the more common questions that arise: 

What is single premium life insurance?

Single premium life insurance is a type of policy that requires only one lump-sum premium payment for lifelong coverage. This policy type is typically reserved for the wealthy who can afford the large lump-sum payment and need lifelong coverage. 

What is the best life insurance for a single female? 

As is the case for a single male, a single female without dependents does not need a life insurance policy. However, if a single female has children or dependent adults, a 10-, 20- or 30-year term life insurance policy would likely be the best bet. 

Laura McKay

COO & Co-Founder

About the Author

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