Reader’s Question: Do Single People Need Life Insurance?

by Hank Coleman

Do Single People Need Life Insurance?

Understanding the purpose of life insuranceHere is the next installment in our the Reader’s Questions Series which highlight questions emailed to me by you, the readers of Money Q&A. Be sure to find out at the end of this article how you can receive a free copy of Dave Ramsey’s book, The Total Money Makeover if your money question is chosen to be featured a future week’s blog post.

If you’re not familiar with Dave Ramsey’s book, you should run right out and get it. It is one of the best personal finance books that everyone should read. Now….on to our reader’s question.This week’s Reader Question is from Michelle in Fargo, ND. She asks…

Do single people need life insurance?

This is a great question that I hear quite regularly actually, and it all stems from people not understand the true purpose of life insurance.

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Do single people need life insurance if they do not have an heir or someone that they look after or who relies on their income?

The True Purpose Of Life Insurance

Life insurance is meant to protect your most valuable asset, your income stream. More importantly, it is designed to protect your future income stream should you die a premature death. Life insurance protects your income and replaces it for your loved ones who depend on it in order to survive and live day to day.

So, if you have no one who depends on your income to live such as a spouse or children, then you most likely do not need life insurance. This is a prime example of why children do not need their own life insurance policies.

Ten Times Your Income In Life Insurance

Have you ever wondered where people got the rule of thumb that you need ten times your annual income in life insurance? It is based on ten times your income allowing you to replace your income for your heirs after you die without having to touch the principle amount and live off of the interest that is distributed.

For example, if you earn $50,000 per year before taxes, the standard finance rule of thumb would suggest that you purchase a $500,000 life insurance policy (term life preferably over whole life). If you invested that half a million dollars in investments earning 8% annually, you would have an income stream of $40,000 which would be approximately the same amount of money that you receive in your take home pay after taxes.

Wrapping It All Up

You should typically wait until you start a family or have someone who depends on your income before you spend your money on life insurance. Buying life insurance before that point in your life is typically a waste of money.

Past Readers’ Questions:

Do you have a money question that you would like to ask? Email me your money, investing, retirement, savings, or other question to Questions[at] If I pick your question for the next article in the series, I’ll send you a free copy of Dave Ramsey’s book, The Total Money Makeover, or you can pick from any of these other free books instead.

I appreciate receiving all of the questions! I would really like to turn this into a weekly series of blog posts answering your questions every Monday. So, please keep them coming!

What do you think? Do single people need life insurance? Are you single? Do you have life insurance?

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About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and a graduate certificate in personal financial planning. Email him directly at Hank[at]

Hank Coleman has written 578 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.

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{ 12 comments… read them below or add one }

Modest Money

I completely agree. I do not intend to waste money on life insurance while I am single. It might be a nice idea to leave money to loved ones who are dependents, but it just isn’t necessary. If something were to happen to me, at least my savings and vehicle resale value would cover the costs and provide some extra money.



It’s amazing the lengths insurance companies will go to acquire new clients. This one agent from SunLife treated me to a fancy dinner to woo me into buying their life insurance plan. The food was delish, but I had to respectfully decline his plan offer. Being single at the moment, the only time I would consider buying insurance now is if I had to support my parents, but luckily I’m not in that position 🙂



It definitely is not necessary for a single person with no dependants.


Paul @ The Frugal Toad

Other than a small policy to cover final expenses, because a single person has no dependents they do not need life insurance.


Hank Coleman

I’m not a fan of even a small policy for burial and final expenses. You can save and set a side that money if needed. Also, your executor can take it out of any assets before distributing it to your heirs as well.



Above a certain age, it becomes wise to buy insurance as you are likely married, with a family and at your earning peak.


Hank Coleman

Only if you actually have dependents that rely on your income.


Elizabeth @ Simple Finance

I would contradict you on one point – I do think kids (like singles) need a small life insurance policy, simply to cover final expenses. The average funeral costs $8,000, and I can’t tell you the number of tragic stories I covered when in the news business of families who couldn’t afford a funeral for a loved one who died unexpectedly.


Hank Coleman

That might be the only time I would entertain purchasing a policy for a child. It would be better financially for a family to have a fully funded emergency fund and use those funds for a funeral instead though….another great rationale for an emergency fund.



I do think in the intervening years for the period from a dependant person to getting married a young person in employment should either have some life insurance, or enough in an ’emergency fund’ so that in the event of death there is sufficient to cover funeral expenses.


Thomas Rockford

Insurance industry fear mongering. If you buy insurance you are “betting” you will die young. Better to save the money yourself. If you were to die young, your spouse would find a new mate, and hopefully one able to help support the kids. It is foolish to think that a spouse will stay alone forever if you die. Don’t plan on it, don’t spend money on insurance expecting it. Maybe enough to get them a year or two (of your income) to adjust. Buy insurance and you bet you die quick. Save/invest and you bet you live a long time. Spend it all and prove you are dumb.


Chad @ OurDimeOurTime

I personally feel there ARE a couple of senarios where singles should purchase life insurance (term only)
1. You have private student loans or parent plus loans still outstanding. Don’t leave your parents on the hook for these things, they are not forgiven at death like federal loans.
2. You know your parents have no savings or are in bad health and will depend on you for their care, have some coverage to negate that if something happens to you.
3. If bad health problems run rampant in your family secure a low cost term policy now before health issues cause you to be uninsurable.
As a 35 y/o male in good health I spend more on craft beer a month than I do my $million term policy.


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