You may think that life insurance is for people who are married, have children or who are the sole breadwinner of a household. This is largely true, but as a single person you should consider taking life insurance out.
If you are earning a lower income and are considering taking out life insurance, there are companies who are willing and able to help you, such as African Unity Life. If you are unsure as to why a single person would need life insurance, the below reasons should convince you to consider it.
It can be used to repay your bond or debt
A bond for your house is arguably one of the biggest debts many people have, whether they are part of a couple or not. If you die or are injured and unable to make an income to make the monthly repayments, the bank can repossess your house in order to make their money.
Your life insurance can be used to repay this bond or any other debts you may have, allowing the house to remain in your name and your parents or siblings can use the house as an asset in your absence if you have been helping with financial contributions to the family.
It saves your family from stress
This is a very personal reason to take out life insurance. Single people often take out life insurance to save their family from having to deal with the stress of planning and financing their funeral, and dealing with the financial gap after their death. This is especially true if the person has been sending money home to elderly parents or relatives to help with expenses.
Your family will be able to provide you with a dignified funeral, and the money from the life insurance will help them to grieve without worrying about how to pay for your funeral.
You can protect yourself
Many life insurance packages include income protection cover as an added extra to your policy. If you are single and do not have a secondary household income to help cover expenses, this is an option you should seriously consider. This is a safety net for those times when you are unable to work due to illness or injury.
Not only will this allow you to continue living comfortably if you are injured or ill, it will allow you to provide assistance to any other family members you may help with finances. Many young people today send money home to elderly parents or to younger siblings and if they were to lose this contribution for any period of time it could be disastrous.
The rates are more affordable
A young, single 25-year-old who is planning to have a family is likely to pay less on their life insurance premiums than when they decide to take out life insurance at age 32 as a new parent. Planning ahead is the ideal way to avoid trouble and adding a spouse or child as your life insurance beneficiary is simple.
Rates tend to increase with age, which is why a young, healthy 20-something will pay less than an older 30-year-old who has some minor health problems. If you wait for too long, it can become prohibitively expensive to take out life insurance and you may end up not being able to take it out at all.
You can preserve your inheritance
Some single people have very close relationships with their nieces, nephews, cousins and siblings and would like to leave an inheritance for them when they pass away. Life insurance will preserve this and provide a tax-free monetary inheritance to those who matter the most to them.
If you do not have someone you wish to list as a beneficiary, you can stipulate that your favourite charitable organisation gets the life insurance payment. This is ideal for those who may not have a close family relationship or who are passionate about a cause.
You want your business to continue
If you are a small business owner with business partners, you will most likely want your business to continue after injury, illness or death. Upon your death, a life insurance policy will allow your partners to seamlessly purchase your portion of the business.
The partners in the company would enter into a buy/sell agreement in which they would buy policies on the lives of coworkers in such a way that the payout would go to the deceased partner’s heirs without giving them a stake in the company itself.
Think of the future
Taking out life insurance while you are young, single and healthy means lower premiums, but it also allows you to plan for the future. You may never know what is around the corner, but if you are prepared, you, your family and loved ones will be able to deal with whatever happens in a dignified manner.