Do I need life insurance if I'm single?
Life insurance is a key part of many people's financial plans. It offers security and peace of mind by providing a safety net for loved ones if you pass away. For married people and people with children, the benefit is easy to see. But what if you're on your own? Do you need life insurance as a single person?
The answer might surprise you. Below, we explore why life insurance is worth considering, no matter your relationship status.
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Do I need life insurance if I'm single?
Don't discount life insurance if you're single. Here are some ways you could benefit from it.
It can cover end-of-life expenses
Funerals, burials and cremation can be expensive. The average funeral costs anywhere from $8,000 to $12,000. Life insurance proceeds can be used to pay for these costs, sparing your loved ones from stress or financial difficulty when they're already going through a tough time.
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It can pay for medical expenses
Whether or not you have a family history of health illness, you never know what the future might bring. For example, you could develop a serious condition that's expensive to treat or even makes it hard for you to work. In these cases, a life insurance policy can help pay for medical costs — especially if you opt for a rider like critical illness, long-term care or accelerated death benefit.
Bear in mind that the younger you are and the better health you're in the more affordable your premium payments may be. If you can pass a medical exam, you can get cost-effective term life coverage and convert it to a whole policy if you decide you want to later. Or, you could lock in whole life coverage at a much lower rate than you might if you waited until you were older. While you can get coverage as a senior, your choices will likely be fewer and the cost will likely be higher.
Learn about other ways you can utilize life insurance benefits and provide a safety net for your family or friends.
It can take care of those who rely on you
Spouses and children aren't the only people who qualify as financial dependents. If you're caring for a parent, sibling or other loved one, life insurance can also provide for them if you die. You can name anyone your beneficiary to ensure they'll continue to be taken care of after you're gone.
It can provide cash while you're alive
Whole life policies build cash value, which you can access while you're alive. You can use these funds in many ways, from funding a major expense to getting you through a rough patch. In addition, the interest rates on a life insurance loan are often considerably lower than other financing options such as credit cards.
It can pay off debt
If you have significant debt, such as a mortgage or student loan, your life insurance policy can cover it if you pass away. Otherwise, if you leave an estate, your creditors will turn to it for payment, leaving less inheritance for your heirs. If you have co-signers on your debt, life insurance can spare them from paying the balance out of pocket.
It can keep your business running
If you own a small business, you can safeguard it after your death by taking out a life insurance policy and naming your partner as the beneficiary. They can use the death benefit to keep the business afloat. For example, they could use it to help pay off any debts, hire someone to replace you or buy out your shares.
The bottom line
You don't need a spouse or children to benefit from life insurance. It can do many valuable things for you, from giving financial security to your loved ones to providing cash you can use while you're alive. To find the best life insurance for you, take the time to shop around, compare rates and consider which type of life insurance suits your needs and goals.
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