Does a Single Person Need Life Insurance?

If you’re single, you might assume that life insurance isn’t something you need to think about. After all, life insurance is often associated with married couples, parents and people with financially dependent children. But does a single person need life insurance?

The answer is not necessarily, but being single doesn’t automatically mean life insurance has no value.

If nobody depends on you financially and you have no significant debts or financial commitments that would affect somebody else after your death, life insurance may not be a priority. However, life insurance for single people can still be worth considering if you have a mortgage, financially support family members, want to leave money to someone, have funeral costs you don’t want others to meet, or expect your circumstances to change in the future.

Whether you need cover should therefore depend on your individual circumstances rather than simply your relationship status.

In this blog, we’ll look at life insurance for a single person, when you might need it, when you potentially don’t, and the life insurance options available to single adults in the UK.

Quick Answer: Do You Need Life Insurance If You’re Single?

You don’t automatically need life insurance simply because you’re an adult. The main purpose of life insurance is generally to provide a financial payout if you die during the policy term. Therefore, one of the most important questions is would somebody be financially affected if I died?

If the answer is no, your immediate need for life insurance may be relatively limited. But if the answer is yes, a single life insurance policy could potentially provide valuable financial protection.

For example, life insurance may be worth considering if you:

• Own a property with a mortgage
• Have debts that could affect somebody else
• Financially support parents, siblings or other relatives
• Have children from a previous relationship
• Want to leave money to somebody
• Have business or financial commitments
• Want to provide money towards funeral or other costs
• Expect your circumstances to change in the future

So when asking “Do I need life insurance if I’m single?”, don’t focus solely on whether you have a partner. Think about who or what would be financially affected by your death.

What Is Life Insurance?

Life insurance is designed to pay out money if the person insured dies while covered by the policy, subject to the policy’s terms and conditions. You normally pay a monthly premium in exchange for a specified level of cover.

Depending on the type of policy, the payout could potentially be used to:

• Repay a mortgage
• Help cover household costs
• Support children or other family members
• Meet financial commitments
• Provide an inheritance
• Help with funeral costs

The appropriate type and amount of cover will depend on why you are taking out the policy. For a single individual, life insurance therefore isn’t necessarily about protecting a spouse. It is about considering the financial consequences of your death.

Is Life Insurance Worth It For A Single Person?

It can be. But there is an important distinction between being able to buy life insurance and actually having a financial need for it.

Imagine two single adults.

Person A

• Rents their home
• Has no children
• Has no dependants
• Doesn’t financially support anybody
• Has savings available
• Has no significant financial commitments that would fall on somebody else

For this person, life insurance might not currently be a priority.

Person B

• Owns a property with a mortgage
• Regularly provides money to a parent
• Wants their sibling to inherit their home without having to deal with a large outstanding mortgage
• Has limited savings

Although Person B is also single, their circumstances are very different. A single person life insurance policy could therefore be much more relevant. Relationship status alone doesn’t determine whether life insurance is worthwhile. Financial responsibility does.

Do I Need Life Insurance If I’m Single And Have A Mortgage?

This is one of the most important situations to consider. You generally aren’t required to have life insurance simply because you take out a residential mortgage, although a lender will usually require appropriate buildings insurance. But that doesn’t necessarily mean life insurance is irrelevant.

If you die with an outstanding mortgage, the debt doesn’t simply disappear. What happens to the property and mortgage will depend on the circumstances surrounding your estate. This raises an important question for a single homeowner: What would you want to happen to your property if you died?

For example, you may want a sibling, parent, child or another beneficiary to inherit it. If there is still a substantial mortgage outstanding, the person dealing with your estate may need to consider how that debt will be repaid. A suitable single life insurance policy could potentially provide funds towards repaying the mortgage, depending on the cover arranged.

Life Insurance For A Single Person With No Dependants

What about life insurance for a single person with no dependants?

This is where life insurance may be less necessary if:

• Nobody relies on your income
• You don’t have children
• You don’t financially support relatives
• You have no relevant joint financial commitments
• Your estate has sufficient assets to meet its liabilities and intended costs

Then there may be less of a financial protection gap for life insurance to address.

That doesn’t mean you cannot take out life insurance. It means you should ask what you’re actually trying to protect. Buying insurance simply because you think every adult is supposed to have it isn’t necessarily a good reason.

What If My Parents Or Other Family Members Depend On Me?

You don’t need a spouse or child for somebody to be financially dependent on you.

Some single adults regularly support:

• Parents
• Grandparents
• Siblings
• Other relatives

For example, you might contribute towards a parent’s rent, mortgage, household bills or care costs. If those payments stopped following your death, would they experience financial difficulty?

If so, life insurance for singles could potentially be used to create a financial safety net for the people you support. This is why the word “dependant” shouldn’t automatically be interpreted as “child”.

What If I Have Children But I’m Single?

Being single doesn’t mean you have no dependants. If you have children who depend on you financially, life insurance could be particularly important.

You might want the payout to help provide for:

• Housing
• Everyday living costs
• Childcare
• Education
• Future financial needs

The appropriate amount of cover will depend on your circumstances, existing assets and how long you want financial support to potentially last.

What Type Of Life Insurance Can A Single Person Get?

There isn’t normally a special product called “single person life insurance”. Instead, there are different forms of life insurance that may be suitable depending on what you want the policy to achieve.

Level Term Life Insurance

With level term insurance, the amount of cover generally remains fixed throughout the policy term. For example, you might arrange £300,000 of cover for 25 years. If a valid claim is made during the term, the policy could pay the agreed amount. This may be appropriate where you want a fixed amount of protection.

Decreasing Term Life Insurance

With decreasing term insurance, the amount of cover reduces over time. It is commonly considered alongside a repayment mortgage because the mortgage balance should also reduce as repayments are made.

Increasing Life Insurance

Some policies allow the level of cover to increase over time, potentially helping the insured amount keep pace with inflation. The premium may also increase.

Whole Of Life Insurance

Unlike term insurance, whole of life cover is designed to continue for the rest of your life, provided the required premiums continue to be paid and the policy terms are met. Because different policies serve different purposes, the right life insurance options for singles depend on what financial risk you’re trying to cover.

Single Life Insurance Policy Vs Joint Life Insurance

A single life insurance policy covers one individual. A joint policy covers two people under one policy and commonly pays out once, typically after the first insured person dies, depending on the policy terms.

For someone taking out life insurance as a single person, a single policy will generally be the relevant structure. However, your circumstances could change later.

For example, you may:

• Enter a relationship
• Buy a property with somebody
• Get married
• Have children

At that point, it can be sensible to review your existing protection rather than assuming the policy you originally arranged still meets your needs.

Should I Buy Life Insurance While I’m Young And Single?

This requires a little nuance. Life insurance premiums are influenced by factors that can include your age, health, smoking status, occupation, lifestyle, amount of cover and policy term. Buying cover while younger can therefore sometimes mean lower premiums than arranging equivalent cover later.

However, a cheaper policy isn’t automatically a policy you need. If you’re 25, single and have no financial dependants or relevant liabilities, buying a large amount of life cover purely because it might cost more when you’re older may not be the best reason to take out insurance. On the other hand, if you already have a clear protection need, arranging cover while you’re younger may be worth considering.

What Happens If I Buy Life Insurance And Later Get Married?

Your protection needs can change significantly over time.

A policy you arranged when single may no longer provide enough cover after you:

• Buy a larger home
• Take on a bigger mortgage
• Get married
• Have children
• Start supporting somebody financially
• Experience a significant increase in income
• Take on new financial commitments

Existing cover doesn’t necessarily become unsuitable simply because your relationship status changes, but it should be reviewed. Life insurance shouldn’t be something you arrange once and then forget about for 30 years.

Can A Single Person Choose Who Receives The Life Insurance Payout?

Depending on how your life insurance policy is arranged, you may be able to specify who you want to benefit from the proceeds. For example, some policies can be placed in trust. An adviser can explain the options available and whether they may be appropriate for your circumstances.

How Much Life Insurance Does A Single Person Need?

There isn’t a standard amount. A better approach is to start with the financial need you’re trying to cover.

For example:

• Outstanding mortgage: £300,000
• Other financial support required: £50,000
• Existing assets available: £75,000

Rather than automatically purchasing a round figure such as £500,000, you could assess the actual shortfall you want the policy to address.

Consider:

• Outstanding mortgage
• Other debts
• Financial dependants
• Existing savings and investments
• Workplace death-in-service benefits
• Funeral costs
• The amount you’d like to leave beneficiaries
• How long financial support might be required

The right level of life insurance for a single person is therefore highly individual. A protection adviser can help you assess how much cover may be appropriate for your circumstances.

Life Insurance Isn’t The Only Protection A Single Person Should Consider

This is particularly important for single adults. If nobody depends on you financially, your own inability to earn an income may represent a bigger immediate financial risk than your death.

Imagine you’re single, live alone and pay the mortgage or rent entirely from your salary. If illness or injury prevented you from working for a prolonged period, who would pay your housing costs and everyday bills? Depending on your circumstances, it may therefore be worth considering protection such as:

• Income protection: designed to provide an income if illness or injury prevents you from working, subject to the policy terms.
• Critical illness cover: designed to pay a lump sum if you are diagnosed with a specified serious illness covered by the policy and meet the relevant definition.

For some single people with no financial dependants, these risks may be more immediately relevant than life insurance.

Key Takeaways

• A single person doesn’t automatically need life insurance.
• The key question is whether somebody would be financially affected by your death.
• Single homeowners should consider what would happen to an outstanding mortgage if they died.
• Children, parents, siblings and other relatives can all potentially be financial dependants.
• Life insurance for a single person with no dependants may be less of a priority where there is no significant financial protection gap.
• Single adults should also consider what would happen financially if illness or injury prevented them from working.

Do You Need Life Insurance If You’re Single?

If you’re unsure whether you need life insurance as a single person, Oportfolio can help you assess your existing protection, financial commitments and the people who could be affected if something happened to you.

We can also help you understand whether life insurance, income protection, critical illness cover or a combination of protection policies could be appropriate for your individual circumstances.

Get in touch with Oportfolio today to discuss your protection options.

FAQ: Does a Single Person Need Life Insurance?