Do Single People Need Life Insurance?

Do Single People Need Life Insurance

Do Single People Need Life Insurance? This is a wonderful issue one I really get asked pretty frequently, and it all starts with people not understanding the real reason why life insurance exists.

If they do not have an heir, someone they care for, or someone who depends on their income, do single individuals require life insurance?

The True Purpose Of Life Insurance

Your income stream is your most significant asset, and life insurance is designed to safeguard it. More crucially, it is made to safeguard your source of future income in the event of your untimely demise. Your loved ones who rely on your salary to make ends meet each day are protected by life insurance, which replaces it.

Therefore, if you do not have a husband or children who depend on your income to survive, you probably do not require life insurance. This is a perfect illustration of why young people don’t require their own life insurance coverage.

Ten Times Your Income In Life Insurance

Have you ever wondered where the maxim “you need 10 times your yearly salary in life insurance” came from? Based on 10 times your income, it enables you to replace your income for your beneficiaries after your death without touching the principal and live off of the interest that is given.

For instance, if your yearly gross income is $50,000 before taxes, the general rule of thumb in finance advises that you get a $500,000 life insurance policy (term life preferably over whole life). If you put that $500,000 into assets yielding 8% yearly, you would have an income stream of $40,000, which is about equivalent to the amount of money you take home after taxes.

Wrapping It All Up

Generally, you shouldn’t spend money on life insurance until you have a family or someone who depends on you for a living. Prior to that time in your life, purchasing life insurance is often a waste of money.

close

We don’t spam! Read our privacy policy for more info.

Related Articles
How to Use Secret

How to Use Secret

Secret Network: What Is It? A blockchain network called Secret Network allows for encrypted

What Is Optimism

What Is Optimism

Explain optimism. Optimism functions as a layer 2 chain on top of the Ethereum

International News: U.S. Q4 economic growth forecast from 4.3% to 2.8% – Dec. 2nd, 2022

12/02/2022

1. The Atlanta Fed GDPNow model: lowered the U.S. Q4 economic growth...

Singapore Chips Away at Hong Kong’s Hedge Fund Dominance

12/01/2022

Singapore Chips Away at Hong Kong’s Hedge Fund Dominance Singapore Chips Away...

FTX Implosion Prompts Call by DOJ Arm for Independent Probe

12/01/2022

FTX Implosion Prompts Call by DOJ Arm for Independent Probe (Bloomberg) —...

Australian Central Bank Has Traders Primed for New Rate Surprise

12/01/2022

Australian Central Bank Has Traders Primed for New Rate Surprise Australian Central...

Wall Street Turns Bearish on Stocks After Bad Year

12/01/2022

Wall Street Turns Bearish on Stocks After Bad Year Wall Street Turns...

Apple Renames Mixed-Reality Software ‘xrOS’ in Sign Headset Is Approaching

12/01/2022

Apple Renames Mixed-Reality Software ‘xrOS’ in Sign Headset Is Approaching In this...