A common misconception is that a single person without children doesn't really need to buy life insurance. This is primarily built on the premise that single people typically have no financial responsibility towards anyone else but themselves. But if you're single, you may want to decide if you need life insurance and how that can benefit those you love.
Covering your outstanding debts
There are many ways as a single person that you could use life insurance to take care of financial obligations that might potentially burden those you love should you die unexpectedly. For example, do you have outstanding balances on credit cards or a vehicle loan? Has a family member or friend cosigned on a student loan or mortgage on your behalf? If you were to die unexpectedly, who's going to satisfy these obligations?
If you're thinking that your creditors will simply write-off the debt, think again. Having outstanding debts means that your estate will have to deal with what you owe. And any loans supported by a cosigner means that the person who has helped support you, would now be on the hook. Life insurance could help release the people you love from the financial burden of cleaning up your debts when you die.
Paying for your funeral
What is final expense insurance? Paying for funeral/final expenses is something everyone needs to plan for. The average traditional American funeral costs between $7,000 and $10,000.0.1 You may not want to think about the inevitable while you're still alive, or even care about what happens to you once you're gone. However, the people who are left to cover your final expenses (including the possibility of outstanding medical bills) care. The fact is, when you die, those that love you will need to have readily available cash to pay for these very real, and very immediate expenditures.
The truth is, funerals and final expenses can't wait - this means that the money will need to come from somewhere. Imagine your family having to pull from their savings accounts, having to take out a loan, or establishing some type of payment arrangement with the funeral home that could burden them for years to come. You might want to consider final expense insurance to help cover these costs.
Helping to support others
Even if you don't have children, you may have a special needs family member or even elderly parents who might require extended support as time goes on. Although you're not obligated, the support you leave for them in the form of a life insurance policy can help provide the needed funds to meet these special needs. You may also have a nonprofit organization that you would like to see carry on the good work that they do after you're gone.
Being single doesn't necessarily mean that you are total void of financial obligations that could burden your loved ones. Even with a small life insurance policy, you can ensure that those you love will have some readily available cash they'll need should you die unexpectedly.