Life insurance offers protection against income loss that would arise if you passed away. In this case, the beneficiary will obtain the proceeds and is therefore safe from the economic impact of the demise of the insured.
The goal of this product is to offer a measure of economic security for your family after your death. So, before purchasing it, ensure you consider your economic situation and the living standard you wish to sustain for your survivors or dependents.
Numerous people assume that the product is for married couples and those with children. However, singles also need life insurance for these reasons.
1. It's Cheaper to Purchase a Policy When You're Healthy and Young
One of the advantages of purchasing life insurance when you're healthy and young is that it is cheaper. You may have less apparent reasons to purchase the product when you're young, but if you could possibly save money, it's sensible.
Unfortunately, many people wait until they're married with children to obtain coverage. However, this is likely to be more costly because the older you're, the higher the chances of contracting a chronic disease. This could increase your insurance premiums or make you ineligible for insurance coverage at all.
Nevertheless, the healthier and younger you are, the less of a liability you're to an insurer. Therefore, when you purchase life insurance you lock in that rate for the duration of the policy.
2. Student Debt
You're fortunate if you're debt-free. However, most people have some type of debt-whether it's a mortgage, student loan, or credit card debt. Numerous people assume that their debt dies with them, but this isn't always the case.
Federal loans are typically discharged upon your death but personal loans with a cosigner aren't. For instance, if your parents co-signed a loan for you, they would eventually be responsible for it in the event that you died.
Furthermore, there are funeral expenses that would need handling. On average, funerals cost $7,000, which could set your loved ones back in terms of finances. If you think that your demise could place financial strain on your loved ones, perhaps you should consider life insurance.
If your debts or funeral will cause considerable hardship for somebody else, consider obtaining a low-cost policy to cover the costs. With high unemployment rates, the last burden a loved one needs is a loan company harassing him or her for payments.
3. You have Dependants
This is perhaps one of the major reasons a single person needs life insurance. Almost 16 million unmarried parents reside with their children. Even if you do not have children, you may have elderly parents who depend on you financially or siblings with special needs.
The suitable policy can function as an economic safety net for your loved ones. It's important you collaborate with a financial planner to establish the life insurance you require on top of other assets you own to make sure your dependents have proper care after your death.
4. You Want a Lasting Business
If you run a small business with partners, life insurance can permit your partners to buy your segment of the business seamlessly.
The company's partners would enter into a buy-sell agreement (either as a company or individuals) on the co-owners' lives with the understanding that the deceased's beneficiaries would receive the payout without having a stake in the company.
5. Future Family
Whether you're contemplating having one or more children, you'll need life insurance. Having kids comes with expenses, including college education. Securing your policy before you start a family is advisable because things typically get hectic once you get a family.
6. Charitable Causes
If you have a charitable cause, life insurance is an excellent way of ensuring the work you do continues after your demise.
Just because you are single, doesn’t mean you lack responsibilities. Various expenses will arise in the event that you die. Therefore, life insurance will ensure you don't leave a burdensome legacy behind.