Single Persons Life Insurance - Do I need it?

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By Chloe Dickenson
Updated on Friday 18 March 2022

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Unlike policies such as car insurance, life insurance isn’t a legal requirement. However, for people with families, children or people who rely on them financially, it can offer a great deal of security and peace of mind knowing their loved ones will be financially taken care of once they pass away.

As a single person with no partner or children, you may be wondering whether you need to take out life insurance and in today’s guide, we discuss the circumstances in which you may need life insurance as a single person and how it can benefit you and those around you. 

Do I need life insurance for a single person?

Single person life insurance can be a good option if you’re single but if you still have someone who relies on your financially.

You might not have a spouse or any children to provide for, but you may have another dependent such as a family member or a close friend or relative who relies on you for financial matters. In this situation, life insurance for a single person could be advantageous to you.

Life insurance for single people can also come in handy if you have any outstanding debts or a mortgage still to be paid off at the time of your death; a single person life insurance policy is a means of clearing debts such as credit card loans and mortgage payments when you die.

If you do have someone relying on you financially, it means they don’t have to suffer the monetary burden when you pass away, so life insurance isn’t just for those with families.

Do I need life insurance if I’m a single mum?

If you’re a single parent with children, the decision to take out a life insurance policy might be more obvious if you want to put a financial plan in place so that your children are taken care of if you pass away.

Some single parents go down other routes to ensure their children will be taken care of upon their death, such as writing a will or asking close family members or friends to be the child’s caregiver if something happens to them, but a life insurance policy should be a consideration too.

Life insurance for a single parent could cover costs such as school fees, clothing, food, mortgage payments, childcare costs, household bills and more if the single parent is the main financial provider for the children.

Do I need life insurance if I don't have a mortgage?

If you don’t have a mortgage, it can still be worthwhile taking out a life insurance policy so that its payment can go towards your close friends, family members or any other beneficiary you chose when you die.

The money from a life insurance policy could also be given to any charities you decide to leave money to at the time of your death. It will also help to pay off loans and other debts you have, even if that’s not a mortgage.

Different types of life insurance policies for a single person

There are three main types of life insurance policy you can take out, both as a single person and as someone with a family. The only difference is you wouldn’t be able to take out a joint life insurance policy as a single person.

  • Level term life insurance - this is when you choose how much cover you want and the period of time you want to cover. It’s intended to cover any expenses you would have to pay for during its time period, such as providing for your children until they turn 18 or until your mortgage is paid off.
  • Decreasing life insurance - this type of life insurance is typically taken out to cover any outstanding mortgage payments and the amount that will be paid out decreases over time as you pay more money off your mortgage.
  • Whole-of-life insurance - this policy is usually the most expensive because it lasts for the policyholder’s lifetime. You pay an amount that you want and whenever you die at any point in your life, the policy will be paid out upon your death.

When do I need life insurance?

If you’re still not sure whether to take out life insurance if you’re single, it can help to ask yourself the following questions to help determine whether it would be the right thing for you:

  • Does anyone (such as a parent, other close relative or friend) depend on you financially?
  • How do you intend for your funeral to be paid? Would life insurance help cover the costs?
  • Do you want to leave any money behind to anyone in the form of inheritance once you pass away?
  • Do you have any outstanding debts, loans or other payments still due? Could life insurance help cover those costs?

If you think that life insurance could benefit you or your loved ones when you pass away, it might be worth looking into a policy. Alternatively, you could consider other types of insurance policies that can give you extra peace of mind such as income protection insurance or critical illness cover.

What are the benefits of life insurance?

Whether you’re single or you’re married with children, life insurance can offer a great deal of comfort and peace of mind to you.

While life insurance policies are usually more synonymous with people with spouses and families, as a single person, there are still many benefits you can take comfort in by having a single person life insurance policy.

  • Financial protection for your loved ones upon your death.
  • If you’re a single parent and the main breadwinner for your children, it can offer protection for your children by paying for things like mortgage payments, childcare costs and more.
  • It can pay off any debts you have at the time of your death such as credit cards payments, loans or a mortgage so that the money doesn’t have to be taken out of your estate.

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