/Insurance Needs for Single People

Insurance Needs for Single People

When you have a family, the types of insurance you need to protect your loved ones may be apparent. But what if you’re flying solo? Although you may not share the same concerns and obligations as married folks, single people certainly still need insurance. Their needs may just be different. Otherwise, we may not have the coverage we need during the unexpected, and in turn protect our finances.

Here’s insurance parties of one should consider:

Disability Insurance

The thought of not being able to work can be frightening, especially when you don’t have a second income to fall back on. And if you don’t have a robust emergency savings to tap in to, it could prove financially disastrous.

Let’s say you get into an accident and injure yourself, or fall ill. Disability insurance can help cover your living expenses for a specified period of time. There are two main types of disability insurance: short-term and long-term.

As you might’ve guessed, the difference between the two is the benefit period. Short-term disability can cover you for anywhere from nine weeks to a year. If you already have a robust emergency savings account, then you may not need short-term disability. For instance, if you can get by for six months, you might be able to do without.

Long-term disability has a benefit period of anywhere from two, five, 10 years, or until retirement. How much you pay depends on your elimination period (amount of time between the date of your injury to when benefits kick in), benefit period, and maximum benefit per month.

Many employers will offer some form of short and possibly long-term disability, explains Jeff Burke of 7th Street Financial. However, coverage may not be enough as many plans are capped at 50 percent of the current income. Purchasing additional disability insurance can provide extra security when you’re unable to work.

Long-Term Care Insurance

Let’s say down the line that due to ailing health, you need help with day-to-day activities like bathing or eating. If you’re single and don’t have children or a partner to assist you with such tasks, you’ll have to figure out how you’ll cover such expenses. Depending on whether you are getting care at an adult day care center, nursing home, or in your own abode, you could be looking at hefty medical expenses that health insurance won’t cover.

Long-term care prevents you from dipping into your retirement savings to pay for the cost of care, explains Divine. Imagine being newly retired and having $1 million in your retirement accounts. And let’s say you have a withdrawal rate of 4 percent per year. While the money should have lasted 30 years, the cost of long-term care can cut down on that amount drastically. “Any aspirations to leave a legacy starts to diminish along with account values,” says Divine.

While people typically purchase long-term care insurance insurance in their 50s or 60s, I opted in to a plan in my late 20s. That’s because I locked in a great premium through my employer at the time. If I need to take advantage of the payout in say, 30 years, the insurance would pay for itself within a few months’ time.

Term Life Insurance

Depending on your situation, you may or may not need life insurance as a single person. While it’s not normally considered necessary when you’re flying solo, if you have loved ones to support, you may want to look into purchasing a term life insurance policy, which could cover you for 10, 20, or 30 years.

If you have family members or friends that you support and are dependent on your income it would make sense to look into purchasing a term life insurance policy.

There are a handful of instances when you may want to purchase a life insurance policy, explains Chad Rixse, co-founder of Millennial Wealth. For instance, If you’re cosigned on any debts. If a family member or friend cosigned a loan for you, and you pass away, the co-signer will most likely be on the hook for that loan. And if you don’t have enough money in your savings to cover debt, a term life insurance policy would protect your cosigner.

If you have a business partner, your passing could take a heavy financial toll. This especially rings true in the early years of a business, says Rixse. “A term life insurance policy could provide the needed capital to buy some time for your business partner to figure out the future of your business,” Rixse explains.

And let’s say you’re a homeowner and have a mortgage. And you’re leaving your home to benefit a loved one, family member, or including it into a pet trust for your furbaby,  you’ll want to make sure there’s enough coverage to pay the remaining mortgage balance should you pass before you pay it off. Depending on the length of your mortgage, a 15-year or 30-year term life policy may be the best choice.

Emergency Savings

While it’s not technically insurance, a robust emergency savings is extremely important when you’re single. By being the sole income earner of your household, without a sufficient buffer to cover the unexpected, your financial security is as fragile as a house of cards. As a single woman in her mid-30s, I aim to save at least six months of living expenses. Anything less would make me feel very anxious.

It’s easy to overlook insurance, as it’s not always be top of mind with finances. But by making sure your bases are covered with insurance as a single person will protect that money you’ve worked so hard to earn and grow.


The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or view of Intuit Inc, Mint or any affiliated organization. This blog post does not constitute, and should not be considered a substitute for legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Jackie Lam ( 9 Posts)

Jackie Lam is a personal finance writer. Her work has appeared in Investopedia, Magnify Money and The Bold Italic, and she’s been featured in Money, Kiplinger, Forbes and Woman’s Day. She runs Cheapsters.org, a blog to help freelancers and artists with their money, and to balance their passion projects and careers.