Marriage trends in the U.S. aren’t what they used to be. Not only has the divorce rate hovered around 50% for some time now, but people are also getting married later in life than ever before. And that’s just considering people in relationships. What if you’re not in one? What if you don’t want to be in one? According to a recent Pew Research study, about a third of all U.S. adults are currently single, and of that group, half aren’t looking for a partner.

If this study represents you, and you have no spouse or children to leave anything to, you may not think you need to worry about any type of estate planning. You may not think you need any type of life insurance.

Life Insurance for Singles

In the past, the general wisdom suggested that single individuals with no children to support and no financial obligations after death don’t need to consider purchasing life insurance. However, as lifespans increase, singles can end up supporting their parents, siblings or maybe even a grandparent.

Although these independent individuals may not have children, life insurance may provide a benefit with the possibility of supporting other family members’ expenses. If you are single and want to cover your own funeral expenses or leave a financial legacy, it may make sense to give life insurance a second look.

Benefits of a Life Insurance Policy for Singles

Life insurance can provide security to your loved ones to not worry about financial pressures during a time of grieving. Also, if legacy planning is important to you, life insurance can be a way to leave money to family members or even a charity.

You may have nieces and nephews that you want to help by paying for a portion of their education. If you are supporting a family member—or see the potential that you may need to support someone in the future—adding a life insurance policy can let you rest easy knowing they will be financially secure if anything happens to you. Here are three benefits to adding a life insurance policy if you’re single:

1. Paying Estate Taxes and Other Costs

If you are financially successful and have assets to pass in your estate (maybe to those same nieces and nephews you helped pay education expenses for), life insurance may help your beneficiaries pay an inheritance tax bill. Since life insurance benefits are income tax-free, the benefit can be a source of payment for these taxes. This would allow your beneficiaries to inherit more of your assets and not have to worry about taxes or other fees associated with distributing your estate.

You could even establish an irrevocable life insurance trust (ILIT) to hold your policy. An ILIT is a type of trust that’s specifically designed to hold and own life insurance policies. By placing the policy in the trust and naming the trust as the beneficiary, the policy is effectively removed from your estate, so beneficiaries of the trust won’t be forced to pay estate taxes on the payout. Not only can this give your heirs liquid funds at the time of your passing to pay for estate taxes and other costs, but it can even help you reduce or outright avoid an estate tax liability.

2. Starting Earlier Can Mean Paying Less

Additionally, if you’re single but are still planning on starting a family someday, you may want to look into an insurance policy now. This lets you lock in a lower premium while you’re still young and healthy. If your health should unexpectedly change and deteriorate in the future, you will likely have to pay much higher premiums—or even face the possibility of being uninsurable.

3. Taking Advantage of Tax Benefits

Permanent life insurance also takes advantage of tax deferral, and any earnings withdrawn (amount above basis or premiums paid) are subject to income taxes. It also allows you to build up a cash value that can be accessed for loans or withdrawals. Note: not all policies allow for loans or withdrawals, and for those that do, the amount distributed can reduce the death benefit.

Consider Term Life Insurance

If you’re still hesitant about committing to a permanent life insurance policy, then term life insurance could be a viable option. Unlike a permanent life insurance policy, term life insurance offers coverage over a specified period of time (typically between 10 and 30 years). If you die within the term of the policy, then the insurance company pays out your full death benefit. But if the term expires before you die, there is no payout. However, at the time of expiration, you may also be able to renew the policy or convert it to a permanent policy.

Since term life insurance policies don’t typically end in a payout (they usually expire before then), they tend to be a far cheaper option. And because the insurance companies don’t have a guaranteed payout, they can pass those savings on to you.

There are other factors that contribute to whether or not you should look into term life insurance, but because they’re significantly cheaper and less of a commitment, it’s something that should be on your radar.

Weighing the Costs of Life Insurance

Life insurance can be confusing and complicated. It can also get expensive, and if you’re single, it’s understandable that you may not want to take on that extra cost. However, the benefits are there, so take the time to work with a financial advisor who can help you determine the most appropriate insurance based on your overall financial objectives.


This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

This article contains only general descriptions and is not a solicitation to sell any insurance product or security, nor is it intended as any financial or tax advice. For information about specific insurance needs or situations, please contact your insurance agent. State insurance laws and insurance underwriting rules may affect available coverage and costs. Guarantees are based on the claims paying ability of the issuing company.

Adria Meehan Siewert

Adria Meehan Siewert

Senior Vice President, Financial Advisor

CFP ®, ChFC ®, AIF ®, Series 7 & 24 Securities Registrations,* Series 66 Advisory Registration,† Insurance License Having worked in the industry since 2007, Adria regularly meets with clients and works closely with the Roundtable™ team of specialists to develop financial plans that are specifically geared toward their values and retirement goals. She is involved in her Arlington Heights, IL community through Our Lady of the...Read More