Side note: The picture above has nothing to do with the article below but I’ve come to realize that any pictures relating to ‘financial planning’ are boring and redundant… maybe I’m just not creative enough. So, I’ve decided to post pictures of places I’ve been. Want to learn more about the photo above? Read the article and find out at the bottom! I mean you could scroll right to the bottom but… come on…
Being in my late 20’s I speak to a lot of individuals in my age group about financial planning. Most of them are single, have no children and have 0 interest in discussing life insurance.
I understand, why purchase life insurance when you don’t think you need it?
Below are 6 reasons why you should consider a life insurance policy even if you’re single.
1) You are young, healthy and insurable. The major reason to get life insurance at a young age is to lock in your insurability. Often people will wait until a major life event, such as a mortgage or children, to get life insurance. This makes complete sense, BUT what if you couldn’t get it? Life happens, far too often people wait for these major life events but can’t get insurance because of health issues. Buy term insurance, lock in your insurability – if something happens to your health you can convert it to permanent life insurance without going through a medical.
People tend to overestimate the price of life insurance. 44% of Millennials overestimate the cost of life insurance by five times the actual amount. Here are the numbers: $1,000,000 of 10-year term coverage for a 30-year-old male is approximately $45 / month. Less than a coffee per day.
2) Co-signed Debt. You needed help paying for school, your first car or your first house but did not have the ability to get a loan on your own. To help you out, your parents co-signed on a loan and you’re fully confident you’ll be able to pay back the loan, no problem. However, if you pass away the responsibility of your loan falls on to your parents (or whoever co-signs). Life insurance can be used to ensure that your debts don’t become a burden to the people trying to help you.
3) You’re living with your significant other. Although you’re not married you and your significant other live together and share the cost of the rent/mortgage. Not only do you share the cost but you’re dependent on each other’s income to pay the rent/mortgage. If one of you dies prematurely how would the cost of living be met? Sell the property or try to move out immediately? A life insurance policy is an easy answer to ensure you or your partners lifestyle is not altered.
4) You have a business partner(s). You own a business 50/50 and your partner passes away, what happens to his/her shares? If his/her spouse inherited the shares would you want to be in business with that person and would that person want to be in business with you? Is there enough cash in the business to buy back the shares from the widow(er)? Business partners tend to buy life insurance on each other to ensure enough liquidity is in the business if one partner unexpectedly dies. The liquidity can be used to not only purchase shares back but to also ensure the business runs smoothly after the unexpected death of a key member.
5) Someone is depending on you for their future. Even though you don’t have children someone else may be financially dependent on you such as an aging parent or disabled sibling. If your plan is to support this person, a life insurance policy can make sure he/she is taken care of even after you’re gone.
6) Final expenses. Morbid, I know. As the saying goes, two things in life are guaranteed, death and taxes. Unfortunately, there is a cost to death in the form of a funeral. A small life insurance policy is a good way to ensure your loved ones don’t have to go into debt to cover these expenses.
Did I miss something? Feel free to comment on this article or send me an email at email@example.com.
— David Miklas
Yep, that is me in the photo. When my wife and I visited Morocco, we spent a night in the Sahara Desert organized by a tour group, Sahara Tours 4×4. They were great and the experience was even better. From the base camp we rode camels for about an hour before landing on a group of tents in the middle of the desert. When the sun went down, the sky lit up with more stars than you could imagine. I’ve never seen anything like it and I doubt I will again.