Life insurance for single people

Do I need life insurance if I’m single?

Many people think of life insurance primarily for the benefits it can provide to their immediate family—helping a spouse stay in the family home, for instance, or providing for the care of minor children. But a life insurance policy can also be an important part of your financial strategy as a single person. Policies are often more affordable than you might expect, making them a practical and valuable investment.

Benefits of life insurance for single individuals

Purchasing a life insurance policy can be worth it for a single person in several ways:

Supporting family members

Even if you don’t have children, you may want to provide for other relatives such as parents, nieces and nephews, or siblings. You can also use the policy to provide for a close friend.

Planning for a future family

If you’re planning to start a family in the future, getting coverage now (and updating the beneficiaries of your policy later) can offer several advantages. We’ll have more on that below.

Protection against debts and liabilities

Although outstanding debts usually aren’t transferred when someone passes away, a life insurance policy can be helpful when you’re a cosigner on a loan. Naming the other cosigner as a beneficiary could help them satisfy your portion of the debt and avoid a forfeiture if you were to pass away before the debt is repaid.

Growing tax-advantaged cash value

If you’re a single person, life insurance can be a dependable addition to your financial strategy that you can take advantage of while you’re still alive. Permanent life insurance with cash value can provide access to cash and tax-advantaged growth that can help you build your net worth. A portion of your premiums is set aside to grow tax free. You can access this money during your lifetime for major purchases or unexpected needs by borrowing against the policy often at rates that are more competitive than market rates, or you can cash out the policy entirely.

Cash value policies include whole life insurance, which provides lifelong coverage if the premiums are maintained and universal life insurance, which offers long-term coverage with the added flexibility to change certain terms like premium amounts and the length of coverage. A key point to remember is that accessing the cash value through partial surrenders or policy loans will reduce the available cash surrender value and the death benefit. Also bear in mind that policy loans involve interest payments.

Final expenses

A life insurance policy can ease the financial burden on your next of kin—whether that’s parents, siblings, close friends, or other loved ones—who may be responsible for your end-of-life expenses. Some insurance policies are designed specifically to cover these costs, ensuring that your loved ones are not left with unexpected bills.

Leaving a legacy

An insurance policy can be a great way to make a significant donation to a charity or cause that you’re passionate about. You can name a single organization as the beneficiary or divide the payout among multiple causes.

Types of life insurance coverage suitable for singles

The type of life insurance you purchase as a single person will depend on your specific goals and needs. Permanent or whole life insurance is the better option if you want to take advantage of cash value and/or ensure that your loved ones receive a death benefit. Term life insurance can be a suitable option if coverage is needed only for a specified time—for example, If you’ve committed to providing assistance for someone’s college tuition, you can purchase a policy that provides protection for the years they’re expected to be in school.

Key considerations when purchasing life insurance

When purchasing life insurance as a single person, there are a few things you’ll want to consider:

The best age to start life insurance

As the saying goes, there’s no time like the present. The cost of life insurance typically increases with age. By purchasing a policy while you’re young and in relatively good health, you can secure a considerably lower premium throughout your life that is often guaranteed not to increase. This is especially beneficial if you have a family history of certain health conditions. Locking in coverage at a younger age can save you money and ensure that you’ll have coverage later on. You can always add beneficiaries in the future if you decide to start a family.

Calculating coverage needs

How much life insurance do you need as a single person? Well, that depends on your goals. For example, if you’re purchasing insurance to guarantee a cosigned loan, cover educational costs, provide for an individual with special needs, or leave a donation to charity, these goals will determine the amount of coverage you need. Consulting with a financial professional is the best way to make sure you get the coverage that best suits your specific circumstances.

Budget and cost considerations

If you’re working within a certain budget as a single person, term life insurance can be a cost-effective solution, providing coverage for the period when it’s most needed. Many term policies can be converted to permanent policies later. While whole life and universal life insurance policies may be more expensive than term life insurance, they are often more affordable than you think. And keep in mind that universal life insurance offers the flexibility to adjust coverage and premiums as your financial situation changes. Just be sure to monitor the policy closely to make sure all requirements are met to maintain it.

Choosing the right provider

Life insurance policies are only as good as the company backing them. That’s why it’s important to choose a company with a proven record and a high credit rating. New York Life has a history of over 175 years of honoring claims, and has the highest ratings currently awarded to any life insurance company from the major credit rating agencies. 

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