When we are young and healthy and single, buying life insurance seems like the farthest thing from our minds. Why worry about purchasing life insurance when we are virtually invincible and have no one to care for, right? Well, maybe not. The following are six reasons why purchasing life insurance is a good idea even for single people.
1) What You Get from Work Is Not Enough
Most employers offer some form of life insurance. And while what they offer may be sufficient to cover some of the initial costs associated with your death and burial, according to the US Bureau of Labor Statistics, the insurance that most employers offer is usually inadequate to cover the needs of the loved ones they leave behind.
Most companies will give their employees a life insurance policy that is equal to their yearly salary, or at most that doubles their yearly salary. Financial planners recommend that a person’s life insurance policy be at least 10 times their annual salary.
2) You Can Afford It
The number one reason that people, especially young people, give for not purchasing life insurance is that they cannot afford it. Many millennials mistakenly believe that life insurance policies are a lot more expensive than what they really are. In most instances, a life insurance policy is going to cost less than what you pay every month for your cell phone or for your cable-television. And while it is true the prices are going to change depending on how old you are, any health challenges you may have, and your gender, it is also true that the expenses your death could leave behind are a lot more than what you would pay for life insurance.
3) It’s Easy for You to Understand
Another objection people throw out when talking about getting life insurance is that it is so complicated they will never understand it, and they don’t want to throw their money away on something they don’t understand. But the truth is that insurance policies are very simple. Boiling down to the most broadest terms, when you buy insurance, you have two options. You can either get permanent life insurance or term life insurance.
You can think about permanent life insurance like buying a car. Every single month, you pay for the car. As long as you make your payments on time, the car is yours. It is the same thing with permanent life insurance.
Term life insurance, on the other hand, is like leasing a car. You pay every single month for a set amount of months. However, when that term is over, you will have to renew the term to continue having insurance. If you’re still confused, talk to a professional and they will walk you through it every step of the way.
4) It’s Cheaper the Earlier You Start
The sooner you buy life insurance, the cheaper the policy is. If you buy a life insurance policy for a quarter of million dollars, it’s a 20 year term policy, and you are 25 years old, you’re going to pay in the neighborhood of $15 a month for your insurance as long as you’re healthy. However, to buy that same policy at age 50 is going cost you almost $50 a month. The older you are, the higher the premiums.
5) You Want to Protect the People You Love
Even single individuals have people they care about. Think about this, if your life was to end suddenly, who would have the responsibility of caring for your end-of-life needs? It would fall on your parents, would fall on your friends, would fall on the people you love? Do you really want them to be worrying about getting the money together to pay for your burial and cover other expenses while at the same time grieving for your loss? Of course not. For this reason, life insurance makes sense.
6) You Have Student Loans
Life insurance can help cover the debt you leave behind. Some loans, like government provided student loans, may be discharged after death. But other loans, like those taken from private institutions, may be assigned to your parents, especially if they cosign for you.
When you buy life insurance, you show that you are a loving, caring, responsible adult. You protect the people you care about. You leave them with a security net that they can use to go on with their life after you are gone.