There are so many different kinds of insurance available Ã¢â‚¬â€ health insurance, vehicle insurance, home insurance, and so on Ã¢â‚¬â€ that it can be challenging to determine which coverages you genuinely need. Life insurance helps to guarantee that your dependents’ financial responsibilities are met if you die and your dependents lose their income Ã¢â‚¬â€ but do you need this form of insurance if you have no dependents?
Let’s see what financial planners and insurance agents have to say on this matter.
If one is single and with no dependents, they probably don’t need life insurance.
“There is absolutely little incentive to acquire life insurance if you are single and have no dependents,” said Jay Zigmont, Ph.D., CFP, founder of Live, Learn, Plan, a financial planning organization located in Mississippi that focuses on assisting childless adults.
However, if you have non-human dependents, this is something to think about.
“I’ve seen some folks get life insurance to pay for their pets when they die,” Zigmont explained.
But the best is to buy life insurance when you’re healthy.
Even if you’re single and have no dependents today, you should consider purchasing life insurance if you expect to have dependents in the future.
“One’s health may change, and a person could become uninsurable in the future,” said Shane Canfield, CEO of WAEPA, a non-profit organization that provides life insurance to civilian government employees and their families. “The easiest way to avoid that risk is to get a whole life insurance policy with the opportunity to acquire additional coverage at intervals with no underwriting.”
Life insurance is also less expensive to purchase while you’re younger and in good shape.
“Younger folks may want to buy insurance because it’s less expensive and can safeguard their insurability, or because they expect to start a family later in life,” said Chris Seabrook, a spokesperson with the insurance firm Country Financial.
Other reasons to buy life insurance
“Even if one is single and with no dependents, having life insurance may help pay off debt,” says Wilson Coffman, Coffman Retirement Group’s president. “Life insurance lets you depart or take care of financial obligations. No one wants to leave this life with the burden of duty or guilt on their shoulders.”
Life insurance helps pay funeral expenses.
“Whether you realize it or not, your death has costs,” Coffman added. “Burial costs can exceed tens of thousands of dollars. Someone must cover these ultimate costs. Again, life insurance may aid any organization or family member.”
A legacy is another incentive to seek life insurance.
“Life insurance is a tax-free advantage,” said Coffman. “Any life insurance left to beneficiaries is tax-free, allowing the money to help others or even charities.”
What amount of coverage do you need?
The amount of coverage you need and who should be your beneficiaries may be uncertain if you are single with no dependents.
“Typically, coverage is 10Ã¢â‚¬â€œ12 times your income,” Coffman says. “For your beneficiaries, you should select numerous persons who will be responsible for your estate following your death. That can be a parent, a relative, or a close friend. After paying your obligations, your residual inheritance will go to these beneficiaries.”
Seabrook pointed out that your beneficiaries might be a trust or a charity.