Frequently Asked Questions by Singles About Life Insurance

If you are single, you may think life insurance simply doesn’t apply to you. Believe it or not, there are still some very good reasons to consider purchasing life insurance. If you do decide to pursue a life insurance policy, work with a skilled insurance agent to determine how much life insurance you need. Life insurance provides financial protection for your loved ones and peace of mind that the people you care about will be taken care of when you are gone.

1. If I’m Single, Do I Need Life Insurance?

The short answer is maybe. Life insurance is less expensive the younger and healthier you are. If you are single now but plan on having a family in the near future, getting life insurance now may not be a bad idea. In addition, there are several other strong reasons you need life insurance. If you do not have existing assets to cover the cost of funeral expenses, a life insurance policy can be an easy way to make sure your loved ones are not burdened with those expenses. If you have children, elderly parents or anyone that relies on you financially, life insurance can be much needed income replacement.

2. What is the Right Age to Get Life Insurance and What are Other Options?

There are many things to consider when trying to determine when to get life insurance. Life insurance for the elderly or retirees can be more difficult to get and more expensive. The younger and healthier you are, the cheaper life insurance usually is; however, that doesn’t mean you should purchase it right away. If you do not have any hereditary or medical issues that would make insurance an immediate need, assess your current situation. If you have money set aside that can be used for funeral expenses and no one else is financially dependent on you, life insurance may be something you can do without. Instead, focus on putting money away towards saving and retirement accounts. Life insurance offers excellent financial protection in the event of a death but is not generally the wisest investment vehicle.

3. How Much Life Insurance Do I Need?

The amount of life insurance greatly depends on your current situation. You should have enough insurance to pay off all existing debt and replace your income for anyone that depends on you financially. If you have children, consider their ages and how much it will cost to help support them until adulthood. If your parents are elderly and rely you on you to pay for their care, this should be factored in as well. At a minimum, your insurance amount should cover your burial costs and any existing debt. At a maximum, it can also cover the cost of maintaining quality of life for your loved ones. Work with a Casa Grande life insurance expert to determine the best amount of coverage for your needs.

4. What Types of Life Insurance Are Available?

There are many different types of life insurance available, although the two largest categories are term and permanent insurance. Term insurance is a policy where you pay a set monthly premium in return for a guaranteed set payout if the insured party dies within a designated time frame. The downside to term insurance is if the insured does not die during that period, you forfeit all the premiums that are paid. This is why term insurance is usually less expensive than other types of insurance.
Permanent insurance works very differently. The premiums tend to be much higher but permanent insurance has a cash value component. Permanent insurance provides a death benefit as well as cash savings as long as you pay your premiums. There are many versions of permanent insurance, including variable, universal, whole-life and universal indexed. Each type varies slightly and may suit your needs depending on your situation and goals. Work with an experienced agent to go over each option in-depth.

5. Can I Use Life Insurance as an Investment?

Permanent life insurance may have an investment component to it. You should carefully weigh the costs and benefits against the cost of other investment opportunities. If you are looking for life insurance protection as well as an investment vehicle, certain types of permanent insurance might be a good fit for you.

6. What Are Policy Riders?

Policy riders are add-on provisions to a standard policy. Riders are typically added for an additional cost. For instance, long-term care (LTC) is often added to a life insurance policy. A LTC rider can include financial reimbursement for long-term care if you ever need it. If you need treatment in a care facility or have an in-home care provider tend to you, a long-term care rider can help you cover the costs. If you have specific or unusual coverage needs, a specific rider may provide a solution for you.

7. Can I Purchase Life Insurance for My Children?

Yes, you can. If you have children, you may want to purchase life insurance for them. This insurance money could be used in the event of their untimely death to cover burial and funeral expenses. While this is an incredibly unpleasant topic, it is a valid protection to consider. Children are typically automatically rated. Assuming there are no major health issues when your child reaches the age of 18, contact your insurance provider and have him or her re-rated for better rates.

8. Can I Get Life Insurance Through My Employer?

Many employers offer life insurance benefits. Take advantage of this policy if it is offered. Keep in mind though, if you leave your job or retire you will lose your life insurance and plan accordingly. Depending on your debt and financial obligations it may be in your best interest to obtain a supplemental policy, just in case.

9. How Are Life Insurance Premiums Calculated?

There are many factors that insurance companies consider when determining your rates. Your age, health and statistical data are all used when assessing your risk. Insurance providers will often require a medical exam and questionnaire asking about your health history and family history to assess your risk. The higher the likelihood that an insurance company will have to pay out, the higher your premiums.
Life insurance provides a much-needed protection for you and your loved ones. Whether you are singled, married or divorced, carefully consider the benefits of life insurance and if it is right for you. If you have additional questions, please don’t hesitate to contact a licensed agent that can explain the benefits and many types of insurance available.

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Steve Gebhardt

Gebhardt Insurance Group was honored by AAA Insurance for being the top New Policy Agency in Arizona for 2013 and achieving the "Emerald Achievement Award."

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