You may think that you don't need life insurance as a single person with no children, but I'm betting you haven't thoroughly thought through all the different aspects of life just yet. After all, you've got all the time and freedom in the world!
Take it from a man who was once single and never thought he was going to have kids, let alone two kids. My first child was born in 2017 and I suddenly felt the need protect him and my wife from financial insecurity for the next 20 years. Then my daughter was born in 2019 and the financial responsibility only increased.
If you're young and have the whole world ahead of you, part of your goal is to consistently try and predict the future to make better choices. Given you can't predict the future with 100% accuracy, this is why you should get insurance like life insurance.
Why You Should Consider Life Insurance While Young
Besides insuring against an unpredictable future, there are plenty of reasons why young people who are single and without children may want to get life insurance.
Here are seven reasons why:
1. You Have Cosigners For Your Debt
If you have private student loans cosigned by your parents, rich uncle, or friendly friend, they will assume your debt if you were to pass. You don't want to put your loved ones on the hook for debt you took out. That would be a dishonorable thing to do.
If the Bank of Mom & Dad or the Bank Of G-Mom & G-Pop cosigned for a mortgage, then your early passing will be an even bigger problem given mortgages are generally the largest type of debt people own. They will already be devastated by your passing. To saddle them with mortgage debt would be too much.
If you have an auto loan or jointly-owned credit card with cosigners, the same thing will happen.
Bottom line: if you have cosigners for your debt, you should always have enough life insurance to cover all your liabilities so you don't hurt your friends and loved ones who tried to help you.
2. You Have Debt, Regardless If It Has A Cosigner
Regardless if you have a cosigner, if you have debt, you should have enough life insurance to cover paying off all your debt in case something happens. If not, at least have enough assets to cover all your liabililities.
If you are unfortunate to have not set up a revocable living trust before you die and have to go through expensive probate court, then having an inexpensive term life insurance policy can cover your court costs, taxes, and debts.
You want your estate to be free and clear for the court to divvy everything up as equitable as possible according to your will. You have created a will right? If not, get to it!
3. You Have A Dependent
Even if you don't have children, someone else may depend on you, like your parents who spent 20+ years raising you to become the man or woman that you are.
You may also be fortunate enough to have grandparents as well who could use your assistance, especially if they don't have long-term care insurance. Paying for a long-term care facility can cost upwards $10,000 a month.
If your parents, grandparents, god-child, or someone you love depends on you for financial support, then it's important to get life insurance to cover their needs.
If you live with roommates you care about, you may want to get life insurance that partly goes to them so they can help keep the property. Imagine a situation where you guys are renting a rent controlled apartment in New York City that's 80% below market rent and your roommate is on disability. You want to hold onto that property for dear life!
4. You Own A Business With Partners
Owning a small business has been one of the most rewarding things in my life. Our small business allowed my wife and I to retire from the daily grind when we were 34 and live our lives the way we want.
However, if we had business partners and/or key investors, we would have a responsibility to keep the business going if one of us should pass away. One way is to name your business as a beneficiary to keep your business going.
Another way is to get key person life insurance, which is a life insurance policy taken out by the business that gets to keep all the premiums if the key person in the business were to die.
5. You Want To Start A Family One Day
As I said in my introduction, I wasn't sure whether I wanted to have children. Work was always a grind and surviving in San Francisco cost a lot of money. It was only when both my wife and I left our day jobs did we finally slow down and have some breathing room to think about children.
After almost three years of trying, we had our first son! Luckily, I had the foresight to get a $1 million, 10-year term life insurance policy four years before he was born. Unfortunately, I should have gotten a 20 or 30 year policy given the policy runs out when he turns six.
If I had better forecasted my future, I would have gotten a longer term policy. If you are young and single, having kids may be something that's really hard to envision. But since the beginning of time, once we find the right partner, deciding to have children becomes a natural next step.
The younger you can lock down a life insurance policy, the cheaper it is. When I went back to see how much it would cost to renew my policy four years later, my premiums shot up because I was diagnosed with sleep apnea after visiting a sleep doctor.
6. Your Family Has A History Of Health Issues
If your family has a history of cancer, heart disease (#1 killer), obesity, and any number of hereditary issues, chances are higher than average that you will also inherit such issues.
Therefore, it is strategically wise to get life insurance before any one of these issues come up. Have a heart-to-heart with your parents and any close relatives above their medical issues as soon as you can so you know what you may be up against.
I always knew my dad snored, but I never asked him about anything else wrong with him. But it is apparent to me now that I inherited his snoring and sleep apnea. I shouldn't have seen the doctor before I renewed or locked down a new term life insurance policy. Because I did see the doctor first, I hurt myself because all medical records are recorded and seen by the health insurance companies.
8. You Want A Proper Burial
One of the things I thought about when I was single was who would come to my funeral? Then I wondered, who would pay for my funeral? Obviously, if I remained single, the answer would be me.
A casket can easily cost $5,000. And a funeral can easily cost over $25,000. You can get life insurance to cover your end-of-life expenses. Sound absurd? Well, the average wedding cost is over $35,000 today. The more popular and impactful you are in society, the higher your funeral expenses.
Life Insurance While Young Is Good
Life insurance is an act of kindness. If you have people you care about and people who dependent on you, you should get life insurance.
If you plan to grow as a person and not stay single and childless forever, getting life insurance is a wise move too. You can learn about the many different types of life insurance policies here. But in general, getting a term-life insurance policy makes the sense for most young and single people.
Even if you don't end up finding a life partner and having kids, you can always cancel your life insurance policy once you determine you're destined for the single life.
Term life insurance isn’t very expensive when you are young, especially if you are in good health. Don't be like me, and wait until after 40 and after having kids to get life insurance. My premiums went up by 10X.
The wisest thing you can do is lock in a low-cost term life insurance policy before life gets too complicated.
The most efficient way to get competitive life insurance quotes is to check online with PolicyGenius, the #1 life insurance marketplace where qualified lenders compete for your business. It's much easier to apply on PolicyGenius than go to each carrier one-by-one to get a quote.
Not only does PolicyGenius provide competitive life insurance quotes from the best life insurers, they also have tools to help you learn how to choose the right policy for you, how to divide the death benefit, and more.
May you live the best of life!
About the Author: Sam worked in investing banking at Goldman Sachs and Credit Suisse for 13 years. He received his undergraduate degree in Economics from The College of William & Mary and got his MBA from UC Berkeley. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $250,000 a year in passive income. He spends time playing tennis, taking care of his family, and writing online to help others achieve financial freedom too.