Is life insurance for single people necessary ? If you are single, do you really need any protection ?
The answer is no in many cases but it could possibly be yes in many others. Generally, a single person wakes up to the need of life insurance after he gets married but this is generally not a blanket decision one should make.
Let us see why single people need life insurance too.
Do you have any dependents ?
Marriage could bring home a wife who is dependent on you. In our country this is quite a common feature. But if you are not married, you should check to see whether you have any dependents. Dependents for single people could be parents or siblings. Ask yourself the question that if something were to happen to you, would someone in your family face financial difficulty ? If your answer is yes, then you have dependents !
You could possibly be funding the monthly expenses of your parents or sending some money to your younger brother or sister for their college education.
And if that is the case, you want insurance even if you are single. This is irrespective of the fact whether you are a male of a female. In our country where more and more females are stepping out of their homes to work, the requirement for life insurance for them as individuals is same as is the case for males.
Single and debt ridden ?
Single folks have more money at their disposal when compared to married individuals. In such a case, one is tempted to splurge money away. The difference between needs and wants is often blurred and the lure of gadgets, electronic accessories, vehicles and other materialistic comforts can make one pile up loans and debts very quickly.
So if you are a single person and have debts, you obviously would not want a situation that when you are not around, the loan companies come knocking on the door of your dependents demanding they pay up the loan you had taken ! So in this case life insurance for individuals becomes very important.
In India, we often make our parents and siblings as co-guarantors to sign on the loan documents. Legally, this makes them answerable when you are not around. So make sure you cover your loans with life insurance.
Insurance for Single – The best strategy
When you are single and just starting your career, you generally do not have huge money at your disposal each month. With little savings, if you are misled into buying the wrong products among the different types of life insurance policies available, then your financial planning could go awry. Avoid the investment cum insurance products and instead opt for term life insurance to cover your dependents and debts.
Also be aware of how many insurance policies you should have and do not go overboard into buying many with the reason to protect yourself.
What will come as a comfort is that at such a young age, the cost of term insurance can really be cheap. It’s not going to hurt your wallet at all.
Check what a 25 year old will have to pay for Rs 15 lakhs for 20 years. Why would you not want to cover yourself with term insurance.? Even if you are single and the situation so demands ?
Do you think there are other reasons why one should get term insurance if you are a single person ? Will be glad to know your thoughts…
@Radhey,
If a person has decided to remain single all his life then i don’t think he would need insurance.
@Rakesh, O man! why would somebody want to do that?
Even if for some reason a person decides to do that, he/she can take it for charity. Wait a minute, is that allowed? Can I take a life insurance and make some charity a nominee?
@Vivek K, No you cannot, for life insurance, you need to have “insurable interest”. One does not and cannot justify that for a charity.
@Radhey Sharma, Ah ok, good to know. So, if person decides to live single for rest of his life he does not necessarily need a life insurance assuming parents are well off by themselves.
@Vivek K, Yes not really required if you don;t have any huge loans and any other kinds of liabilities.
@Vivek,
Writing a will in the name of charity would work. If the person dies the insurance amount would directly go to the charity.
@Rakesh, But who would the nominee be in the life insurance in the first place ?
@Radhey,
Can’t he appoint the trust as a nominee itself?
I think that option should be available if a person is single and want to take insurance.