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Life Insurance

Life insurance for single people

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Being single certainly comes with its perks - you don’t have to share the duvet, there’s no fighting for bathroom time in the morning, and you don’t need to take out a life insurance policy when you’ve got no dependents, right?

You’ll often hear that in the event of unexpected death or illness, having a life insurance policy is a great way to ensure your spouse or whanau are financially taken care of. So, this begs the question:


Do I need life insurance if I’m single?

Typically, single people with no kids don’t need life insurance because no one is relying on their income. If you’re considering buying a policy, ask yourself: “Will someone be financially worse off, if I was to pass away?” A business partner, a debt co-signer or ageing parents can all qualify as financial dependents? If the answer is yes, then life insurance could be a wise call. If the answer is no, consider putting money aside for an emergency fund.

To help you make an informed decision about your insurance cover, here’s five scenarios where life insurance could be a suitable option for singles:


Five reasons why a single person might need life insurance

  1. You have a mortgage or debt

    Debts, no matter how little or large, are very common. An insurance payout could be used to clear any debts you may have, and is especially useful if you have a joint loan with a family member, friend or even business partner. Take the time to look through your current debt paperwork - are there any instances where a co-signer might be on the hook for your loans?

    If you have a mortgage, it’s likely it will take some time to sell your property. In the interim, your family may have to take on mortgage payments, or any other regular repayments you might have, such as credit cards or appliance hire purchases. A life insurance payout will lessen the financial burden on anyone who could be accountable for your debt. It’s also important you have a will written which states how these assets, and your other wishes, should be dealt with when you pass away.

  2. You have financial dependents who aren’t your biological children

    Many Kiwi provide financial support to aging parents, grandparents, disabled siblings or children who aren’t biologically theirs. If someone’s financial future is dependent on your support, make sure you account for that in your Life Insurance cover. Your policy will help pay for living expenses, schooling or health care, if you were to pass away.

    This is where calculating your cover can get tricky. Not all insurance calculators offer options for aging family members or non-biological relatives. For non-biological kids, it’s pretty straight forward. Figure out how much funding you want the child to have, and for how many years. Take education, housing and other lifestyle needs into consideration.

    For aging relatives, here’s a handy hack: input their information as if they’re your partner and list them as not working. Include their debts or mortgage. This should give you an idea of the nest egg they’ll need to be financially stable, if you weren’t around. Having a will is especially important in this case. Be sure that your will and beneficiary lists match and clearly specify what money goes to whom for what purposes.

  3. You have a business partner

    Whether you own a software startup with a friend or sell organic skincare as part of a family business venture, there’s always an element of financial risk involved in entrepreneurship. If you’ve started a business with a partner, it’s likely you’ll need a contingency plan, in case one of you were no longer around.

  4. You want to leave a legacy

    When deciding whether or not to buy a policy, it can often seem that the focus is solely on the negative — planning for dire situations such as death or terminal illness. But remember, a life insurance payout is intended to ease some of the financial burden - a loving gesture in what is otherwise a difficult time.

    As the insured, a policy means you’re leaving behind a legacy. Whether you’re an aunt, uncle or grandparent, being able to provide your loved ones financial support is a beautiful gift to receive at a hard time. The money could ensure debt-free education, or provide a big contribution towards owning a home.

    Alternatively, perhaps you feel strongly connected to a particular organisation or charity, and would like them to receive a monetary boost after your passing. In taking out a policy and being specific with your wishes in a comprehensive will, your payout could go towards to the cause of your choice, helping many and having a long lasting impact on society.

    Business partners need insurance as a means of income replacement and to protect the future of the company. With the right level of cover in place, the surviving business partner will have enough capital to keep the company running, manage any outstanding business loans, or to buy out the deceased partners’ shares.

    As a business owner, there’s always a never-ending to-do list to tackle. But don’t let insurance be pushed to the bottom of that list. Without cover in place, your premature death could impact the financial structure of your business.

    How much cover you need will depend on your company’s expected revenue over your lifetime, existing debts, future expenses and the general structure of your business. Shop around and compare life insurance quotes to find the best policy for your business’ needs. We’d suggest working with a certified financial planner during this process.

  5. You want to cover end of life expenses

    While leaving a financial legacy behind is a great reason to take out a policy, the payout can also be used to take care of costs that would otherwise be passed on to family members.

    Everyone wants a fitting farewell for their loved ones, though funerals can be expensive to arrange. Likewise, significant medical bills quickly accumulate if you suffered from a illness requiring a lot of care, including payment for care facilities, such as nursing homes. Even if you only have a small policy, the consequent payout could be used to cover these expenses.


Benefits of having life insurance when you’re single

  1. Lower insurance premiums

    Investing in life insurance early on in life might help you secure lower premiums.

    If you’re healthy, your premiums are generally lower than someone with a known medical history. Often as we age, our health might get worse, so the older you are when you purchase a policy, there is a risk that your premiums may be higher. Remember, if your health changes once you’ve locked in your policy, your premiums should be unaffected.

    And while it’s true that life insurance is particularly important if you’re married, that doesn’t mean that it isn’t beneficial to have your own policy just because you’re single.

  2. Future proofing

    For many singles, life is almost guaranteed to change at some point in the future.

    That may mean taking out a mortgage and buying a home, entering a long-term relationship or marriage, or having children. And for many it will even be a combination of all three!

    It’s always wise to revisit your life insurance policy if your situation changes. In some cases, you’ll need to increase your insured sum, or list new beneficiaries. While you never truly know what the future will hold, having a life insurancepolicy as a single adult is a smart investment to protect whatever and whoever may join your life over the years.

  3. Peace of mind

    Another thing that life insurance can help with is giving you peace of mind and in today’s frantic society this is something that shouldn’t be undervalued. More of us are suffering from anxiety than ever before, brought on by things such as uncertainty over jobs and being over worked, relationship issues, and changes in living arrangements, amongst many more. While investing in a policy obviously won’t rid you of worry, the making and executing of future plans can be a huge reassurance and ease your mind.


Talk to us

If you’re curious about whether investing in a life insurance policy is right for you as a single adult, Chubb Life is happy to talk to you more about it. Simply contact us and we can take you through your options. 


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