What's the reason for life insurance? Should a single person who is not married buy it?

Question

What is the real reason for life insurance? if you are single should you buy it? What is it used for? Does it have a purpose in people's lives?Why do you have to pay for it each month for? Can you use it to pay off bills like credit cards etc..?When do you get the money from life insurance? or is it something that you can own but never use in your life?

Answer 1

A single person with no dependants does NOT need life insurance.

The person who buys life insurance never sees the money--whatever beneficiaries you choose get the money when you die. There are some types of life insurance that have actual cash values (you can sell the policy and get some money--though not as much as you put in probably), but that kind is not the best kind to have anyway.

You buy life insurance to protect your dependants (kids, spouse, anybody you support financially) so that when you die, they get some money.

You have to decide how much money they'll need. Some people buy enough life insurance to cover their funeral and burial costs. Others get enough to pay for their kids' college (then they reduce their policy when their kids are actually in college). It all depends on how much you want to pay for.

PS-often life insurance and disability insurance is a benefit provided by your employer. If you want more than they provide you for free, you can have a little deducted from your paycheck each month and raise the level of the premium.

Answer 2

OK, everyone has their OWN reason for life insurance. If you don't have a reason to buy it, DON'T BUY IT. Don't let some salesperson create the market by telling you, 'oh, this is great and you need it.'

Married/single isn't as important, IMO, as KIDS.

*I* have my life insurance, so my kids can get put through college, even if I die. After they're 24, they're on their own, so I have TERM insurance. You can't use your OWN insurance to pay off a credit card, but if you leave the insurance to an ESTATE, then your ESTATE can pay off your debts with the insurance policy.

But as credit card debt isn't inheritable, what's the point?? I would NOT buy life insurance to benefit the credit card company.

You don't get MONEY from a life insurance policy until YOU DIE. Unless it's one of those "savings" plan ones, where after 5 years, 10% of what you've paid in is available for you to borrow, but you have to pay the insurance company interest to borrow your own money. And if you die before you pay it back, they take it out of the payout of the policy. It's only a good deal for people who are really bad at math.

Answer 3

You are operating under the mistaken assumption that if people buy a product it serves a purpose. Insurance companies argue that if your kid dies you may be too traumatized to work for a while. Some insurance policies for kids are structured so the kid can renew it at a set price regardless of health. If your child develops health problems down the road, he may be able to get reasonably priced insurance simply by renewing the policy you had in his name. The REAL reason people buy insurance policies on kids is because insurance companies are very good at selling stuff. They keep talking about insurance as "protecting the ones you love" and some people see insuring a kid as protecting them. Economically it rarely makes sense. The death of a child is usually (to put it bluntly) an economic windfall because kids are expensive. The amount of unnecessary premiums you spend on a young person with no dependents for decades before they need it usually amount to way more then what you save. Your child might be healthy as a horse (and able to get insurance easily)., might never have dependents (and never need insurance) or might live to be 102. Most people don't save enough for retirement or their kids education, so most people would be better off putting a few extra dollars into their 401k or their kid's 529 plan then buy insurancefor their kid.

Answer 4

Okay, everyone is going to have their own opinoin about life insurance and single people. Most don't need it. However, what you need to ask yourself is why you're buying it. If a single person *does* buy life insurance, skip the term - it's useless. I would recommend a variable universal or a universal life policy so that you can earn some money. Variable policies are tricky, and the fees can outweigh the benefits, so be careful. With that said, there are some companies (that will remain nameless) out there that have very good, competitive UL policies that are worth looking into. Why? It's PERMANENT insurance that you can buy NOW to PROTECT YOUR INSURABILITY IN THE FUTURE. Hello?! That is the point. Wouldn't you be miffed if, 10 years from now, you're diagnosed with cancer, or some other disease that makes you either uninsurable and/or highly rated, and the premiums are so unaffordable that now - you've got Baby Doc and Doc's Wife to provide for - and shucks, can't get insured. Oh well.

So, hate to be harsh, but that's the truth of it. Better to buy something modest now with an earnings feature than to try and get it when you're older and it's more expensive.

Besides, think about also whether or not if you did die in some tragic, unexpected accident tomorrow, would your family be burdened w/ paying for your final expenses? Even if they can afford it easily, do you want them to be saddled with that? Don't just think funeral expenses - if you don't have a will, probate is expensive (for anything else you might own that would go into an estate), death certificates are stupid expensive (why, I have no idea), and all sorts of paperwork and transactions that cost money. So, there is a lot to consider that I think some people don't want to tell you, they just want to say, "Oh, geez, you're single, so forget it." We can't live in the now - I think 911 taught us that. Must be as prepared as possible for tomorrow. Good luck.

Answer 5

A lot of good arguments both pro and con about the need for a single person to have life insurance but nobody mentioned the uncertainty of insurability in the future. If you are young and in good health you can get a relatively inexpensive policy. In twenty years or so you may be married with kids and a mortgage and decide that you then need the insurance to protect your loved ones. But you may have also acquired an illness that will keep you from getting the insurance or that will make the premium so high you won't be able to afford it.

Answer 6

Yes you have rightly said that it is something that you can own but cannot use in YOUR OWN life.

Life insurance is mainly to compensate the risk of no life to those who are affect due to that death. For instance, a person who is supporting a family will try to get a life insurance so that the family will not suffer financial if remains unlucky to welcome death with surprise.

For a single person - life insurance is not a very good option - although it is one of the option - one can use it as an investment tool - there are many insurance coming which expires at a certain fixed period of your life and at that point of time the sum of premium paid will be returned to you alongwith the growth/appreciation earned by investing that fund in debt/equity market. But this option is comparatively less attractive then taking an accident insurance that covers just accidental damages and hospital/operation expenses but not death. these insurance are dearth cheap - you can buy accident insurance at throw away prices.

And then for investment purpose you can perfer managed funds to invest your money into which gives you a better appreciation and you have option to enjoy that money alongwith the appreciation in your OWN LIFE.

Cheers mate :))

Answer 7

Reason for insurance- so that loved ones are taken care of. By this I mean the mortgage, debts, replace income and send your kids to college. Insurance, in its pure form, is a transfer of risk- your life or valuables, you pay a premium, and the insurance company will pay to replace, fix or give money for whatever the reason(s) were for getting the insurance in the first place. Single not married get it- maybe maybe not. Do you have kids? Do you have loved ones who will be affected by your passing? Do you have debts? Even when you die they need to be paid. Insurance can do that. Have a niece or nephew you want to send to college? Have a mortgage? Lots of reasons. You can use it to prepay your funeral expenses. I can ONLY recommend level term insurance. Any policy that has cash value, your loved ones have to decide between face value OR cash value.

Answer 8

Even if you don't have a spouse or children, you still need some life insurance, if you haven't pre-paid your funeral. Funerals are expensive, and someone is going to have to pay for your funeral. If would ease the burden on your parents or siblings. You don't have to pay a fortune every month for a million dollar policy or anything like that. You can spend very little and get a decent amount to help with funeral expenses (or to pay off your house, car, etc. that you leave behind). Sometimes you can even get life insurance with certain checking accounts, AAA, and things like that. HTH

Answer 9

There are different types of life insurance and different reasons for having it, regardless of whether one is married or not. For instance, there is the type of insurance which will, if you never let it lapse for non payment of premiums, will eventually after a number of years, return your whole premium if you live. In the meantime, it will pay if you die. The major reason for single people to be insured is so that their last expenses (and funeral, burial expenses) may be paid, so relatives (or the state or city) won't have to pay to bury you (in a pauper's grave if the government pays). Have a happy day.

Answer 10

Life insurance is not for you. It is for those you care about when you die. You die, and the insurance company gives money to whoever you sign it over to. Most single people don't get it, but many do. Why? Because even single people have loved ones. Are there people in your life that you care about and want to provide for in case of your death? Then you should get life insurance. If not, then you don't need to bother.