Do I Need Life Insurance If I Have No Dependents?

Life insurance can be valuable even with no dependents. Find out why single, debt-free adults might still need it (and at what point you don't).

You don't need dependents to benefit from life insurance.

A policy payout could support anyone who relies on your income. It would also save loved ones from taking on your debts or protect a family you have in the future.

Still, there are some reasons why life insurance may be unnecessary without dependents. Find out who should get a policy, and who can skip it, below.

You might still need life insurance if…

Are dependents really the only reason you'd need life insurance? Here are 5 big reasons why a policy may still be worth the cost.

1. Someone depends on the money you bring in (anyone!)
   Most people think of "dependents" as children, but it applies to anyone who relies on your income. It could be a spouse or partner, an aging parent, or a special-needs sibling.

   Any money you give someone would be lost if you're gone. A life insurance benefit could replace that money and make sure their needs are met.

2. You co-own a business.
   If you pass away, your business could be in a tough spot. But a life insurance payout could be the windfall that helps your business (and your partners) persevere.

   It can provide some cash to cover operating costs while they take time to recover. When they're ready, they'd also be in a better position to find someone worthy of replacing you.

3. You have any co-signed debts or accounts.
   Have student loans? What about a joint credit card account?

   Any debts you have with a co-signer or joint account holder would be on that person's shoulders if you were gone.

   Instead of leaving them to pick up the bill, consider getting a life insurance policy. The payout could cover leftover debts and give your loved ones some breathing room.

4. You might have a family later on.
   Currently single with no direct dependents? You're not off the hook just yet.

   If you think there's any chance you might have a family in the future, it's worth looking into life insurance now.

   The older you get, the more expensive life insurance becomes. As time goes on, you're more likely to develop a health condition that insurance companies see as a bigger "risk" to insure. More risk = higher rates.

5. You're worried about your family paying end-of-life costs.
   End-of-life expenses, such as a funeral or cremation, are usually paid by your estate before any funds can be doled out to your heirs.

   If the estate isn't enough to cover it, your loved ones might have to use their own money to foot the bill.

   A life insurance policy could pay for your arrangements and ensure that your loved ones aren't left to pick up the pieces.

You could skip life insurance if…

Life insurance is not a worthwhile expense for everyone.

If you check these boxes (ideally, all of them), there's not much else that would make life insurance worth the cost.

• You're completely debt-free
  
• No one would be in financial trouble without you
  
• Your estate is enough to cover end-of-life costs

There's a good chance that everyone could benefit from a life insurance policy. If you've decided to get one, here's what you should figure out before buying.

What Type of Life Insurance Should You Get?

There are two main types of life insurance: term life insurance and whole life insurance.

With term life, your family only receives the payout if you die within a pre-determined period of time (you decide how long that period is).

With whole life, your family gets the payout no matter when you pass away - it's in effect for as long as you keep paying the monthly premiums.

For the most affordable policy, term life is your best bet. It's less expensive than whole life because it only lasts for a limited period of time (5-35 years). The application process is usually easier and quicker, as well.

A whole life policy does offer lifelong coverage, but it costs up to 15x as much as a term life policy. But if you're wealthy and expect to leave behind a large estate, it may be worthwhile.

Bottom Line

Protecting dependents is one of the top reasons people get life insurance. But it can still be beneficial for people with no "traditional" dependents like kids.

If you support anyone financially or want to pay off co-signed debts, a policy is worth looking into. If your debts and retirement are already managed, you could be okay to skip it.