Do single people need life insurance?

Life insurance is one of those products that is traditionally thought of as something that only married people involve themselves in - you know, like minivans. Life insurance, in my not so humble opinion, is a MUST for those of us that have dependents. If I die, then my family will be without my income. That's a problem. My life insurance not only replaces my income, but it also funds future financial goals like college for my spawn. But what if you currently don't have dependents? Do you need life insurance? Excellent question. Good luck finding the answer. Have a great day.

KIDDING. I'm going to tell you the answer. For a moment, let's examine all the reasons that someone would purchase life insurance.

• Survivor needs- As I mentioned above, my main need for life insurance is related to the needs of my dependents. No dependents generally equals no survivor needs.

• Final expenses- Your family is already pissed that you are dead, don't stick them with the funeral bill.

• Protect future insurability- Will you always be single? Well, it depends on your dance moves. Just because you are single, doesn't mean you will always be single. You may not need life insurance right now, but you might need it in the future. Here's the problem. Whereas you are currently relatively young and healthy, currently is now over. You are less young and less healthy than you were 4 seconds ago. What does this mean? It means that technically you are more expensive to insure. You can lock in your health and age by getting life insurance right now. The price of life insurance is based on your age and health. You may not have dependents right now, but you may have them in the future. Buying life insurance now insures that you will have life insurance once you actually need it. Think of it this way, do you carry a spare tire in your trunk? Of course you do. You keep it in the trunk just in case you get a flat tire. What I'm trying to say is that marriage is like getting a flat tire. Crap. Never mind.

• To pay off your debts- If you are the only signer for your debt, then your debts will be paid by your assets at death. If you don't have enough assets to offset your debt, then the lender is up a creek. However if you have a co-signer, then your co-signer is fully responsible for your debt at the time of your death. Um, that's not cool. For instance if your parents co-signed on a loan, then they will owe money on your loans even after you are dead. In some cases parents have been forced to pay back student loans upon their child's death. If you owe money to anyone or you have had anyone co-sign on a loan, then please buy enough life insurance to cover your debt.

How much?

If any/all of these reasons have resonated with you, then you should probably buy life insurance. Consider it a hedge. But how much money should you commit to something that is not a sure thing? It all depends on your financial situation. If you are in a great financial situation, then go ahead purchase life insurance equal to ten times your income. So if you make $100,000 per year, then purchase life insurance for $1 million. Based on your health, this could cost as little as $50/month. You can always make the beneficiary your favorite charity until you switch your beneficiary to your future dependent. Leave a legacy for the organizations that you care about, then switch the policy to pay the people that financially suffer in your absence.

If you're single and your financial situation isn't that great, then at least cover your debts. Again, term life insurance isn't that expensive.

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. Don't buy it.

A very simple solution to this possible problem is to take advantage of your life insurance benefits through your employer. I generally prefer that people have life insurance outside of their group coverage (because of portability [taking the coverage with you {to your next job}]). However in this instance group coverage is a decent temporary fix to your problem, if you are unsure what to do.

Have an additional situation you'd like to run buy me? Leave your situation in the comments and I'll take a stab at it.

***Special note: Some people also purchase permanent life insurance for the investment benefits. I will address this in a different post. I personally don't buy life insurance for the investment benefit, but then again, I refuse to eat cottage cheese based on the texture.