Reasons to get life insurance with no dependents
You don’t have children now, but you might have them later
If you’re young and single, you may not have children now, but you could possibly want them in the future.
People are settling down and having children later these days, but life insurance companies still generally offer lower prices to younger people. In addition, if you are a woman and you know you want to have children, waiting until you are pregnant to apply for life insurance could make the process more involved. Any complications from your pregnancy may, in some cases, result in higher premiums or make it more difficult to get the policy you want.
So, if you know you might want kids someday, you may be better off considering life insurance now than later.
You have your own business
Thinking of applying for a business loan? Lenders will probably require you to have life insurance and to name your lender as a beneficiary in the event of your death. Also, if you have a business partner or employees who would suffer financially from your death, you may want to consider a policy to help them adjust to your loss.
You have debt that you co-signed with others
Many people have debts that they acquired with a co-signer, whether that person was a parent, friend or spouse. We’re talking about things like a mortgage, an auto loan or a credit card balance. If you pass away, your co-signers will often be held responsible for these debts. The good news is a life insurance policy could help pay those debts so your co-signers may not have to.
You have private student loans
Though federal student loans are forgiven when a person dies, private loans are another example of a debt that may be passed on to any surviving co-signers to pay. Since these loans can sometimes represent tens of thousands of dollars or more, people often consider purchasing life insurance so that any loved ones who co-signed student loans could have money to help pay off that debt.
Your spouse or other living partner would be financially impacted by your death
If you have a spouse, roommate or other partner with whom you share living expenses, life insurance might help them make up for the income they lose if you pass away. This might be especially important if you earn more than your partner.
You have elderly parents who are dependent on you
As we grow older, so do our parents—and frequently nowadays adult children take extra financial responsibility for elderly loved ones. If you pass away before your parents or elderly dependents, life insurance may help them recover from the loss of your financial support.
You have other adult dependents
If you have a sibling or loved one with special needs who will require your financial assistance their entire life, you may want to consider life insurance to help provide care for them when you’re not around.
Alternatively, even though you may not have “kids” (as in young children), you might have adult children who are still at least partially dependent on you financially. This is more common now due to higher living costs and student debt.
You need to cover the costs of your funeral and burial
Like many things, the average cost of a funeral and burial in the United States can be expensive. Americans are saving less than in previous generations, and if you don’t have your final expenses on-hand in savings, your loved ones may have to scramble to pay for your funeral—unless you have life insurance to help meet those expenses.
You want to leave a legacy
Many times, people who don’t have children devote themselves to a cause or a hobby they feel passionate about. Purchasing a life insurance policy and naming an organization you care about as the beneficiary is one way to give a final gift.
You’re over 50
As mentioned previously, the older you are, typically, the more you pay for a new life insurance policy. In fact, some companies won’t sell certain kinds of life insurance to people over 65. So, if you’re over 50, and you’ve been considering life insurance, and you still haven’t purchased a policy, now might be a good time to consider taking the plunge.
FAQs
If you're single, don't have debt, have enough cash money to cover your funeral expenses, and have resolved to not have any financial dependents, then you don't need life insurance.
Should I have life insurance if I have no dependents? ›
“The policy coverage might only extend for a certain period, making term insurance an appropriate fit for the situation,” noted Tate. The majority of individuals who are single, financially independent, have no dependents, and do not own a business, do not need life insurance.
Is life insurance worth it if there are no kids? ›
Life insurance can be a valuable way to protect your loved ones and yourself — even if you don't have children. And, that may be particularly true if you're married or taking care of elderly parents.
At what point do you not need life insurance? ›
Regardless of your age, if you are at a point where you have enough income and assets to comfortably support yourself and the people who depend on you financially, you may not require life insurance. For most people with families, this only happens later in life after their children are grown and self-sufficient.
Should I get life insurance if I have no beneficiaries? ›
Most life insurance companies require you to name at least one beneficiary. If beneficiaries are not named, the life insurance proceeds will go to your estate. If you don't have a will, your estate, including the death benefit, may need to go through probate court.
At what age should you stop paying life insurance? ›
At What Age Is Life Insurance No Longer Needed? Life insurance is no longer needed for many people once they reach their 60s or 70s. At this point they have retired, their kids have grown up, and they've paid off their mortgage and other debts.
Is it bad to not have life insurance? ›
It could cause even greater financial hardship for those financially dependent on you. In addition to children, those persons could include dependent parents. Helping to protect the financial future of loved ones is another key reason why people take out life insurance policies.
What is the downside of life insurance? ›
Cons of life insurance
One disadvantage of life insurance is that the older you are, the more you'll pay for a policy. This is because you're more likely to pass away during the policy period than a younger policyholder and will, in turn, cost the life insurance company more money.
Should I get life insurance if I have no family? ›
Even if you're single, life insurance can protect others from financial burdens that could be brought on by your passing. Plus, life insurance rates for a young person are generally lower than they are for other customers.
Is life insurance ever worth it? ›
In general, life insurance is worth it if your death would place a financial burden on other people. Consider getting coverage if: You want to cover your own burial costs. Funerals can be pricey and your loved ones may not have the cash to cover the bill.
Many life insurers don't issue term life insurance policies after the would-be policyholder reaches a certain age, with limits ranging from 75 to 90 years of age. If you're 55 or older, you may find it difficult to find term life policies up to 30 years or longer.
What does Dave Ramsey recommend for life insurance? ›
Core Ramsey Teaching: You only need life insurance while you have people depending on your income. Buy a 10–20-year term policy worth 10–12 times your annual income. Since life insurance is only for the short-term, you should only buy term life insurance.
How do you decide if you even need life insurance? ›
The quickest way to know whether you need life insurance is to ask yourself one question: Would your death have a financial impact on the people in your life? If the answer is yes, then you may want to consider life insurance. Life insurance is a contract between you and an insurance company.
Who should you never name as a beneficiary in life insurance? ›
And you shouldn't name a minor or a pet, either, because they won't be legally allowed to receive the money you left for them. Naming your estate as your beneficiary could give creditors access to your life insurance death benefit, which means your loved ones could get less money.
What happens to a trust when there are no beneficiaries? ›
A trust with no beneficiaries can have legal implications that vary depending on the specific circ*mstances. In some cases, the trust may be considered invalid or incomplete, which could result in the assets being distributed according to state law rather than the trust creator's wishes.
What happens to a 401k if there is no beneficiary? ›
Similarly, if you aren't married and haven't designated a beneficiary, your 401(k) may become part of your estate and goes through probate. In some cases, if you've named your estate as the beneficiary, it will need to go through probate.
Is it worth getting life insurance if you're single? ›
Even as a single individual, you may have financial dependents, such as aging parents or siblings. Life insurance can be worthwhile in such situations as it offers protection and support for your loved ones.
Do I need life insurance if my kids are grown? ›
Now that they're grown, and you may be left wondering whether you still need life insurance. Don't be too quick to abandon your policy. Although everyone's situation is different, there are many reasons to hang onto life insurance coverage even after the kids have moved out.
Do you need life insurance if you're alone? ›
The bottom line
You don't need a spouse or children to benefit from life insurance. It can do many valuable things for you, from giving financial security to your loved ones to providing cash you can use while you're alive.
