Why To Consider Life Insurance, Even If You're Single

Although only 50% of American adults have life insurance, financial experts say that life insurance is a non-negotiable need if you're married with children. But what if you're single, child-free or both?

While you may not think life insurance is essential without a spouse or kids, it may still be necessary. Depending on your situation, you may need a policy to provide adequate protection.

Why Singles May Need Life Insurance

In its most basic form, life insurance provides a death benefit to your loved ones if you pass away. It ensures they can cover the bills without your income, and keep a roof over their heads. For those with young children, life insurance can provide for the children's care, including for their future education expenses.

Life insurance may not seem necessary if you're single and without kids, but there are several reasons why it may in fact be a smart purchase:

1. You Care for an Elderly or Disabled Relative

Children aren't the only dependents you can provide for with life insurance. If you have other family members or friends who you care for, such as an elderly parent or a sibling with disabilities, life insurance can provide for their continued care if you're no longer around to care for them.

Considering the high cost of assisted living facilities, life insurance protection can be a critical safeguard if you're a caregiver.

2. You Have Debt That’s Co-Signed

You may have debt that was co-signed by a parent, relative or partner. Whether it's a car loan or student loan, your co-signer may still be responsible for the loan payments after your death. Insuring your own life ensures that your co-signers will have the money they need to pay off the loan if you're no longer around to pay it.

3. You Want to Lock in a Low Rate

Life insurance can be quite inexpensive when you're young. If you buy life insurance when you're in your 20s or 30s, when you're most likely in good health, your premiums can be as little as $20 to $30 per month for a 20-year term life policy with a $500,000 death benefit.

If you wait to buy coverage until after your 20s and 30s, perhaps when you’re married, your premiums may be significantly higher. And, if you're diagnosed with health conditions, it may be more difficult to secure coverage. Getting coverage now allows you to lock in a policy at a lower rate.

The Best Insurance If You're Single

There are two main kinds of life insurance: term and permanent.

Term Life Insurance

When it comes to life insurance for singles, term coverage tends to be the most popular option. It has a simple structure; it pays out a death benefit if you pass away during the policy's term. And it's usually much cheaper than permanent coverage since the policy expires. With term coverage, you can typically purchase between $50,000 and $5 million of coverage, in terms that range from 10 to 30 years.

If you're single, term life policies make sense because they provide a death benefit only in the case of your death. They tend to be less expensive, yet they can provide a significant death benefit to your loved ones to pay off your existing debt or provide care for your relatives.

Permanent Life Insurance

Permanent life insurance, such as whole life or universal life policies, can last for your lifetime; as long as you continue to pay the premiums, the policy stays in place. For those worried about health conditions that could make them ineligible for life insurance later in life, permanent policies can provide peace of mind.

However, permanent life insurance policies are typically more expensive than term life policies; depending on your age and health, the premiums can be about 10 to 15 times higher than the premiums for term life coverage.

Whole life insurance for a single person can be a good idea if you're at risk for health conditions, or if you want to add riders to your policy to take advantage of endorsements like long-term care coverage.

Shopping for Life Insurance

As a single person shopping for life insurance, ask yourself the following questions to choose the best policy for your needs:

• Who relies on my income? When deciding whether you need life insurance (or how much coverage to buy), consider everyone who may be negatively affected by the loss of your income. If you were to pass away suddenly, think about who within your circle might have issues paying their bills without your contributions.

• Would anyone receive additional debt because of my death? Make a list of any debt held in your name, and note any accounts that may have a co-signer or co-borrower. If you have any debt with another borrower, life insurance ensures that the other borrower isn't solely responsible for the debt repayment after your death.

• How large a policy do I need? In general, experts recommend purchasing a life insurance policy with a benefit equal to 10 times your salary. However, that recommendation is just a guideline. Depending on your situation, you may need more or less coverage. For example, if you have a relative with special needs you care for, you may need a larger policy. But, if you're debt-free, and without dependents, a smaller policy may be sufficient.

• How long do I need coverage to last? For most people, term life coverage — an affordable option that provides protection for a limited time — is the better choice. You can get coverage for a term of between 10 to 30 years. But if you think you'll need protection beyond the normal term life policy, and are concerned about your ability to qualify for coverage later in life, permanent policies may be more suitable.

Coverage options, term lengths, riders and premiums vary by insurer, so it's wise to shop around and get quotes from several insurers. To help you get started, we identified the eight best life insurance companies based on their rates, policy options and customer service.