Up until now I’ve always had some life insurance through my full-time job and the coverage was pretty cheap because of my employer chipping in to help cover the monthly premium. But now that I quit my job to pursue full-time self-employment, I’m beginning to realize just how much those employer benefits added up.
Working for myself means I have to cover several things that I never had to worry about before. For instance, I now have to find and pay for 100% of my own health insurance, dental insurance, and vision insurance. I also have to fully fund my own retirement account, where before I got a pretty handsome employer 401(k) match. Finally, I have to find and pay for my own life insurance if I want to be covered.
Why does a single person with no dependents need life insurance?
There are several reasons why a single person with no dependents might need life insurance. For one thing there are still death and burial costs that need to be paid for no matter if you are young, old, single, married, and no matter if you have kids or not. I want to make sure I have life insurance in place to cover these expenses so my family and friends don’t have to worry about paying for them or being forced to decide what to do instead if they can’t afford it.
Second, there could be massive medical bills that need to be paid when you pass away. You never know what the circumstances will be when you die and you don’t want you family or friends to be worried about how to pay your medical bills when they should instead be grieving for you. Life insurance can help pay these costs too.
Finally, I’m considering getting life insurance at least equal to the amount I’d need to cover the costs I already mentioned plus my outstanding, unsecured debt. I have a mortgage on my house, but the sale of the asset should cover that balance with a little room to spare. However I also have some unsecured debt, including student loans and credit card debt. These balances still have to be paid if you die and life insurance can be used to cover those balances. Again, I wouldn’t want my family to have to worry about paying these bills in the event of my death, so I’m considering getting enough life insurance to cover these balances too.
You never know when it’s your turn to pass, so you need to be prepared with life insurance at all times. I’m sad that I let my employer-sponsored life insurance lapse without another plan in place. That’s why I’m looking at getting my own life insurance policy as soon as possible now that I’m self-employed.
Do you have life insurance?
Why would your friends and family be on the hook for your debts? If you’re not married, the debts die with you unless you had somebody consign of course. The only reason I can see someone young and with no kids or spouse getting life insurance is to lock in the low premium. If something happens to your health a few years from now and you try to get life insurance then, your premium will be higher due to health and age.