Insights & advice

Should you get insurance if you're single?

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Protecting your future today is smart

You’ve made all the right moves and have finally been rewarded. All that hard work at school has helped you land the job that launches your career.

Proper money management is the key to your financial independence. It gives you the power to make the decisions that shape your life. Long-term thinking inspires you to create and follow a financial security plan that covers the next 40 years or more of your life.

If you haven’t worked with an advisor to design your financial plan, chances are the only insurance you have is automobile or tenant insurance. But why bother? You’re single and don’t have kids. Surely, there’s no need for personal insurance. Or is there?

The importance of insuring your financial future

A solid financial security plan revolves around your income.  It’s important to think about your financial goals, like owning a house, having kids and enjoying a comfortable retirement.

Getting your investments up and running today is vital to growing wealth. A fast start could translate into owning your home years earlier. Investing with a vision and diversification can help you mitigate risk.

Helping you prepare for unexpected health events

Accidents happen and they could prevent you from working for a few months or even years. Being prepared for a serious health issue is also important. The probability of either situation happening to you in your lifetime is greater than you might think.

You can address those risks with individual disability and critical illness insurance. If you are unable to work due to a serious illness or injury that is covered by your policy, disability insurance provides you a stream of replacement income. If you experience a critical illness that’s covered by your policy, critical illness insurance pays a one-time lump sum amount when you need it most. This allows you flexibility and choice to help fund uncovered healthcare expenses, seek the best medical care possible and replace lost income. Both types of insurance can be important parts of your financial security plan and help you continue to achieve your goals if something unexpected happens.

Some considerations about company benefits

Many of today’s young people know they face a different career path than their parents. Rather than working the same job for decades, the expectation is that people will switch employers every few years. While this isn’t necessarily a bad thing, it does mean you’ll likely lose the insurance provided by your employer each time you change jobs, and a new employer may not offer the coverage you require.

It’s also important to remember that the insurance you get through your workplace normally provides basic coverage and benefits from a set menu of options.  Unless you get extra insurance coverage, it could be short of your actual needs. The HR department at your workplace can give you details on your workplace insurance coverage, and your advisor can help you determine if it’s enough to meet your needs.

The advantage of buying insurance while you’re young

Buying personal insurance at a young age generally means you’re getting the lowest possible premiums, since risks increase with age.  Many policies also allow you to renew your coverage without additional medical exams. Better still, coverage is guaranteed and, as long as premiums are paid as required, only you can cancel a policy.

Why a permanent life insurance policy may be right for you

Without a spouse or kids, it may seem odd to purchase life insurance. However, there are reasons to buy this kind of insurance coverage while you’re young and single.

Consider participating life insurance (one type of permanent life insurance), a powerful tool for retirement and estate planning. Yes, there’s a death benefit but also a guaranteed amount of money that grows inside your policy, combined with the investment performance of the participating account that can increase the value of your death benefit. It can also help pay for goals like an education fund, starting a new business, or supplementing your retirement income. Keep in mind what you take out can be taxed.

Permanent life insurance can play a central role in a financial security plan. An advisor has the expertise to help you decide if this route is right for you.

Keeping dependants in mind

People depend on you, even if you don’t have a spouse and kids. If your parents don’t have enough money, you and any siblings may eventually be responsible for their health and long-term care.

Here are some other instances where life insurance makes sense:

  • You have a family member with special needs

  • You took out a personal or business loan that a family member co-signed

  • You want to leave money to loved ones

  • You want to leave a large donation to a charity or cause

Your decision to start and follow a financial security plan at an early age can help put you on track to financial independence. The right insurance will help you stay on that path.

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