While usually it's not required, single individuals without dependents can indeed benefit from life insurance in case they have financial responsibilities, which could include outstanding debts and potential support for ageing parents.
"Life insurance can prevent these financial burdens from falling on family members or co-signers. Additionally, purchasing coverage while young and healthy typically results in lower premiums, making it a cost-effective time to secure protection for future needs in case they change their marital status," says Says Abhishek Kumar, a Securities and Exchange Board of India (Sebi)-registered investment advisor (RIA), and founder and chief investment advisor of SahajMoney, a financial planning firm.
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Myths Around Life Insurance
Several persistent myths surround life insurance requirements and dependents, leading many to make uninformed decisions about coverage.
"There is a very common misconception that a life insurance policy will work only in case of death, whereas now there are a lot of plans which cover benefits also including disability, critical care, and maturity benefits, including a pension plan too," says Surender Tonk, vice president, IBAI.
Also, common misconceptions include the belief that only primary breadwinners need coverage, that life insurance is unnecessary once children become independent, and that young, healthy individuals don't require protection.
In reality, even non-working spouses provide valuable services like childcare and household management that would need replacement if lost.
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Many people also wrongly assume that all life insurance policies are the same, when coverage varies significantly between insurers and policy types, as in the case of term plans versus traditional plans. Life insurance serves multiple strategic purposes for single individuals beyond traditional income replacement. "Many think life insurance is only for those with a spouse or kids. But it's also useful for covering debts, helping parents, or creating a legacy. It's not just about family; it's about planning for the future," says Sarita Joshi, head of health and life insurance, Probus.
Life Insurance: Beyond Just Dependents
Life insurance can clear any unpaid loans after death, so no one else has to pay. The money can also go to parents to support them. Or, it can be used to leave a gift or donation to a cause they care about. "For debt repayment, the death benefit can cover outstanding mortgages, personal loans, credit card debt, and student loans, preventing co-signers from becoming responsible for these obligations," says Kumar.
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When supporting ageing parents, life insurance can provide financial resources for their care, medical expenses, and end-of-life costs, with many single adults expecting to provide regular financial support to their parents. Loan protection insurance will always help in debt repayment in case of any unfortunate event. "As far as dependent parents are concerned, the insured can opt for such a sort of maturity plan which can give regular income to protect his ageing parents, and he can opt for future income and maturity benefit, etc.," says Tonk.
