Why get life insurance when no one depends on you? Well, here are some extra situations to think about.
The world of life insurance can get complicated, and the goal of this article is to teach you the absolute basics. You will learn why most people buy life insurance and how being single with no kids changes those reasons.
Why Do Most People Buy Life Insurance?
Life insurance is meant to financially protect everyone from your death. If someone depends on your paycheck coming in the mail, then you need to get life insurance. This can include married couples without children, single parents, siblings taking care of each other, or grandparents raising grandkids.
Stay-at-home moms and dads should also get life insurance because, without them, it gets expensive to replace all the childcare, cooking, and cleaning they do.
There are other reasons people buy life insurance. Businesses might insure owners and key employees. Life insurance can be used as a way to save for retirement or pass on wealth to your family.
What About Single People With No Kids?
Since there isn’t anyone who is dependent on your paycheck coming in the mail, the reasons for a single person with no kids to get life insurance dwindle to only a few.
Funerals are expensive, and your final wishes might be costly to carry out. It might be cool to launch your ashes to the moon, but last I checked, it costs $12,500. If you want to relieve your family of your final expenses, think about getting a small life insurance policy.
If you have ever had someone co-sign a loan for you, they are on the hook if you bite the dust. It’s common enough for parents to help their children get different types of loans. If your parents (or a sibling, grandparent, or friend) co-signed a loan for you, consider getting life insurance to pay off the loan if you kick the bucket.
You may be single with no kids right now but that might not always be true. Life insurance gets more expensive as you age, and getting a policy today means you could save money when you add more insurance later. For example, I clicked over to Geico’s website for some life insurance quotes. A healthy, 20-year-old male can get a $50,000 policy (term insurance) for 30 years for about $11 a month. For a 40-year-old, the price goes up 64% to $18 a month.
What Kind of Life Insurance Should I Buy?
It depends on your goals. Term life insurance covers you for a certain amount of time (my example above only lasts 30 years) and could be a good solution for covering a loan that someone co-signed for you.
Whole life or permanent life insurance covers you until you launch into eternity and could be a good solution to cover funeral costs. Be warned, the term “whole life” covers a broad range of life insurance products, including universal life and variable life policies.
I say these different types of insurance could be a good solution because it depends on how much you can afford and how you feel about spending money on something you won’t benefit from (because you’ll be dead). I strongly suggest you decide what you want the life insurance to pay for before talking with an insurance agent.
In the end, if no one’s wallet is going to hurt after you walk the plank, the need for life insurance goes away. If you still want life insurance, it can be a great gift to someone you love or a cause you care about.