Do I need life insurance if I’m single?

If you’re living the single, life you might wonder if life insurance is necessary. Here we take a look at the circumstances that could make it worthwhile. 

If you’re living the single, life you might wonder if life insurance is necessary. Here we take a look at the circumstances that could make it worthwhile. 

Mubina Pirmohamed
Insurance expert
minute read
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Posted 5 JULY 2021

Why take out life insurance?

Getting married, moving in together or starting a family can be a cue for many people to consider taking out life insurance. But what if you don’t have a partner? There are still reasons you might want to think about life insurance. For example, you may be single, but still have dependents.

Roughly eight million people in the UK live alone. Some of them have dependents who they don’t share a home with, but could still be financially affected by their death. Here’s what to consider.

Cover for younger people

Although you might not have a partner now, that may change in the future. This is why it might be worth considering life insurance while you’re still a little younger as the younger you are the cheaper life insurance tends to be – even if you don’t yet have any dependants.

A level term policy could cover you for a set number of years, during which you might get married and have children. But before you buy a policy, check the terms and conditions to make sure the premium is fixed – so you’ll be paying the lower rate throughout – thanks to your young age at the start of the policy.

Life insurance for single parents

As a solo parent, your children might be completely reliant on you financially. Having life insurance can give you peace of mind that they’d have some protection if anything happened to you. Typically, life insurance pays out a lump sum, which could cover things like the mortgage and outstanding debts and bills. Or it could be used for future expenses, giving your children some financial security.

Life insurance for people living with friends 

High property prices and economic uncertainty mean that many young people are struggling to save for a mortgage deposit and get their first foot on the property ladder. No surprise then, that some young people opt to buy a home with friends as a way of making it more affordable. If you own a home with a friend or a relative, you’ll need to think about how your share of the mortgage would be paid if you were to die, or if you’re suddenly unable to work because of illness.

Life insurance could cover your mortgage payments, while critical illness cover could provide you with a pay-out if you fall ill with one of the conditions outlined in your policy. Always check your policy’s terms and conditions to see what is and isn’t included.

Life insurance for carers

It’s not just partners and kids that depend on you. If you’re caring for elderly or disabled parents or relatives, they might suffer financially if you were to die. The lump-sum paid out by a life insurance policy could help relieve some of this burden.

Covering funeral costs

Knowing your funeral costs could be covered can be a big relief for you and your loved ones, who won’t be stuck with a hefty bill. Consider that even the most basic funeral could cost around £4,100.

If you don’t think you need life insurance, you can buy funeral insurance as a standalone policy.

Leaving a legacy

Even if no one is financially dependent on you, you might want to leave your assets to loved ones or a charity when you die. Life insurance can help pay off your mortgage, so your beneficiaries can inherit your property.

Whole of life cover can be used to cover inheritance tax. But you need to make sure the policy is written in trust, to keep the pay-out separate from your estate. That can help avoid having inheritance tax deducted from life insurance pay-outs.

Under UK law, if your estate – what you leave when you die – is valued at more than £325,000, your beneficiaries might have to pay 40% inheritance tax. The threshold may seem like a large sum, but if you take property, savings and other assets you might have into account, it’s possible that the value of your estate could easily go over that.

Writing your life insurance in trust usually means that the pay-out won’t be counted as part of your estate, and your beneficiaries could avoid paying inheritance tax on it. They should also get the money sooner, as they won’t need to wait for probate (the legal process of settling your estate).

When you write your life insurance in trust, you can also specify who you want the pay-out to go to when you die. Just be aware that you might not be able to amend this if you change your mind further down the line. If you’re considering writing your life insurance in trust, speak to a legal expert first.

Top tip

If you took out life insurance when you were married, but now find yourself newly single after divorce, you might want to change the named beneficiary on your policy. If you don’t, your ex could still claim the pay-out if you die.

Find out more in our guide to divorce and life insurance

Other life insurance considerations if you’re single

Making a will is important if you want to leave assets to named friends, relatives or your live-in partner. If you don’t have a will, your assets will be divided according to the terms of intestacy, as laid out here by Citizens Advice. This means that the law will determine how your estate is to be shared, the bulk of which will likely go to your next of kin – even if it’s a long-lost relative you haven’t seen for years.

Frequently asked questions

Why should I take out life insurance when I’m single?

If you’re young, healthy and single, life insurance is probably the last thing on your mind. But in the future, your circumstances could change. It’s not uncommon for many people to settle down and start a family in their late 30s or 40s. Typically, the younger you are when you take out life insurance, the cheaper your premiums will be. Waiting until you’re older and ready to ‘settle down’ could mean paying far more for your cover.

When might I not need life insurance?

Depending on your age and situation, you might decide that life insurance isn’t right for you. For example, if:

  • you’re a confirmed singleton with no intention to find a partner and no dependents who rely on you financially
  • you have grown children who have already flown the nest
  • you’ve paid off your mortgage and own your home outright
  • you’re in long-term rental with no intention of buying
  • you have sufficient ‘death in service’ cover through your employer
  • you’re on a low income and are eligible for state benefits

What types of life insurance are good for single people?

There are three main types of life insurance to consider:

  • Level term – a fixed amount of money for a fixed amount of time, which can be as long as 30 years. This could be a good option if you want to pay less while you’re young and single, but plan to settle down and start a family in the future. Just be aware that there’s only a pay-out if you die during the term of the policy.
  • Decreasing term – designed to cover outstanding mortgage repayments if you die. As your mortgage decreases over time, so will your cover.
  • Whole of life cover – cover that lasts for the rest of your life, so there’ll be a guaranteed pay-out no matter how old you are when you die. This is typically the most expensive type of life cover.

What other types of insurance should I consider?

If you’ve only got yourself to rely on, it’s important to make sure your income is protected if you become ill or have an accident and are unable to work.

  • Critical illness cover – this can be bought as a stand-alone product or as an add-on to your life insurance policy. It can help cover mortgage repayments or living costs if you become seriously ill or disabled.
  • Income protection insurance – this can help cover any loss of income if you become ill, are injured, or lose your job.

Where can I compare life insurance?

Whether you’re single, in a relationship or married, we can help you find the right type of life insurance to suit your personal circumstances.

What’s more, if you buy your life insurance online through Compare the Market, you could claim an Amazon UK gift card worth up to £195**.

Find out how to claim your Amazon UK gift card here

**Terms and conditions apply

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