60-second summary – Life insurance for singletons
Just want the need-to-know? Here’s a quick outline of what single people need to consider when thinking about whether to take out life insurance…
Some single people have dependants that rely on them and life insurance could help financially
If you’re buying a home, it might be beneficial to put life insurance in place in some circumstances, for example when buying with friends
The younger you are when you buy life insurance, the cheaper your monthly premiums are likely to be
You need to think carefully about who the beneficiaries of your payout will be, especially if they are older and may die before you
There are different types of life insurance, each with their own advantages and disadvantages. If you’re not sure which is right for you, seek expert advice.
Why get life insurance?
Life insurance is a way of helping to financially protect the people you love after you die. Getting married, moving in together or starting a family can be a cue for many people to consider taking out a life insurance policy. So, buying life insurance as a single person might not be high on your to-do list.
But there are still reasons you might want to think about life insurance. Roughly 8.4 million people in the UK live alone. Some of them have dependants who they don’t share a home with but could still be financially affected by their death.
Or you may be one of the lone-parent families who account for 16% of the 19.5 million families in the UK.
Here’s what to consider when searching for the type of policy you may need.
Do I need life insurance if I have no children?
Even if you have no children, there may be other people who depend on you financially. For example, do you have siblings who are disabled or have special needs? Do your retired parents still need your financial support?
If so, they could potentially benefit from a lump-sum payout from a life insurance policy.
Otherwise, a life insurance policy could simply be used as a gift. That could be for friends, family members or other loved ones, in the event of your death.
Why get life insurance at a young age?
Life insurance for a young person might seem pointless. But although you might not have a partner or children now, that may change in the future.
This is why it might be worth considering life insurance while you’re 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 when buying a house
Mortgage providers will usually suggest you take out life insurance when buying a home, but you don’t have to. However, some lenders may insist on it.
The right mortgage life insurance policy could cover the outstanding mortgage balance if you die.
Top tip
When deciding who gets your life insurance payout, you can name someone as either a revocable or irrevocable beneficiary. If you give them revocable status you can change your mind and remove them by telling your insurance provider about your new wishes.
But an irrevocable beneficiary can only be removed by getting their written consent, as well as completing the form. So, think carefully before you decide.
Life insurance for people living with friends
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 died or were unable to work because of illness or redundancy.
Decreasing term life insurance is often used to cover repayment mortgages where the amount you owe decreases over time. The payout from the life insurance also decreases over time.
Income protection insurance offers replacement income if you become unable to work through illness or injury. Alternatively, critical illness cover could provide you with a lump sum payout 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.
Single parents life insurance
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 financial 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 carers
If you’re caring for elderly or disabled parents or relatives or paying for their care, they might suffer financially if you died. The lump sum paid out by a life insurance policy could help relieve some of this burden.
If your beneficiary is an elderly relative, remember they may die before you. You’ll need to consider what you want to happen in that case. You could name what’s called a contingent beneficiary. This is the person who would be next in line to receive that amount if the original beneficiary dies.
If no contingent beneficiary is named, the amount will simply be divided between the remaining beneficiaries. If no beneficiaries remain then the money is likely to be paid to your estate, then shared out through the probate process.
Covering funeral costs
Knowing your funeral costs could be covered can be a relief for you and your loved ones, who won’t face a hefty bill.
Consider that even a basic funeral on average cost around £4,285 in 2024. And depending on the type of funeral service chosen and where it is held, it could cost a lot more.
If you don’t think you need life insurance, you can buy funeral insurance as a standalone policy.
Life insurance to pay inheritance tax
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.
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.
Did you know?
It’s possible to name multiple beneficiaries and leave a percentage to each of them – for example 45% to your sister, 45% to your brother and 10% to your favourite charity.
If you want to leave money to a beneficiary for something specific – paying off a mortgage, for example – you’ll need work out what percentage of the payout is needed to enable them to do that.
Life insurance after divorce
If you took out life insurance when you were married, but now find yourself 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. Instead, you might want to list any children or other loved ones as your beneficiaries.
Find out more in our guide to divorce and life insurance.
Which life insurance is best for single people?
There’s no one right answer here as it will depend on your situation, why you want life insurance and cost.
There are three main types of life insurance to consider:
Level term life insurance policy – these policies run for a fixed time (the term), which can be as long as 30 years. They pay out the same amount no matter when you die, provided it’s within the term of the policy. 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.
Decreasing term – designed to cover outstanding mortgage repayments if you die. As your mortgage decreases over time, so will your cover. Just make sure the cash value of the payout is enough money to pay off the full balance. You’ll also need to consider how household bills will be paid without your income.
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.
You might also want to consider other types of income protection insurance in case you become ill or injured and unable to work.
If you’re not sure what type of policy is right for you, talk to an advisor who can help you understand the advantages, disadvantages and costs of the different types of policies.
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 by Citizens Advice. Different rules may apply depending on where you live in the UK.
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.
Where can I compare life insurance?
Whether you’re single, in a relationship or married, we can show you our best matched life insurance options to suit your circumstances.
See all our life insurance guides
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 £300**.
Find out how to claim your Amazon UK gift card here
** To claim the Amazon.co.uk gift card, you must make six monthly payments in a row. Gift card value dependent upon your monthly premium and insurance provider. Offer available for policies applied for online. This is an updated offer for all applications made from 29 August 2024. You’ll be contacted to claim your gift card up to 45 days after paying your sixth monthly premium. See full terms and conditions.
FAQs
When might I not need life insurance?
Here are some things to consider when deciding if life insurance is necessary for you:
Are you a confirmed singleton with no intention to find a partner and no dependants who rely on you financially?
Do you have grown children who have already flown the nest and are financially independent and secure?
Have you paid off your mortgage and own your home outright?
Are you in long-term rental with no intention of buying?
Do you have sufficient death in service cover through your employer?
Are you on a low income and are eligible for state benefits?
What affects the cost of single person life insurance?
Insurance providers take many things into consideration when calculating the cost of premiums. These include your:
Age when you start your policy
Lifestyle – whether you smoke and drink for example
Health, for example any pre-existing conditions
Family medical history
Job – some occupations are considered riskier than others.
How long you want the policy to last for and the amount of cover needed will also have an impact on the size of the premium.
For over 20 years, Tim’s been building and managing relationships with big brands for the benefit of customers. As our expert on all things life, health and income protection, he’s working hard to find the right products that look after you and those you love most.
Our content is written by a Compare the Market expert, backed by data and enhanced by AI. Find out how we ensure accuracy and quality in our Editorial Guidelines.
