Life insurance as a single person with no mortgage or dependents

TheGlossy

Hi all,

I'm turning 32 this year and I have been looking into getting a life insurance policy. I don't have any partner, children or mortgage. Most insurance providers are advising me against it because they say there is no need for it at the moment.

My logic is to start contributing towards the insurance right now even if I have no children or dependents, so that if I ever have children, they'll have that security from the moment they're born. I am planning on having a small amount in my policy at first and if I ever get children, maybe then increase it accordingly.

I also have two young siblings, I am thinking of listing as my beneficiaries should I pass before I have children.

I was told to get income protection instead which I will look into as well, but I don't think it's such an unreasonable thing to get life insurance at this stage. If I had a mortgage, I'd simply sign up for mortgage protection.

Is it unreasonable to get a life insurance policy at this stage?

Sleeper12

I don't see any advantages of having life cover if you have no dependents. It's not like the vhi or a pension. In fact you would be better taking out a small pension. They usually have life cover attached up to retirement age

Jim2007

Are you sure you don’t mean Life Assurance?

beachhead

Life assurance can be a savings policy if you have a gaurantee of a certain return-over the next 34 it should be worth something.Try both - a life assurance policy and a pension savings policy.Just don't over commit yourself as in the early years you'll be paying off the various commissions charged.

phormium

I get your plan but not a lot of point to it, if you are starting small and intending increasing it if/when needed then you will be subject to new underwriting again, in general you can't just increase them other than a certain amount of index linking which is probably not what you mean. It's not like VHI where if you are in you don't penalised for starting late.

For life cover, basically something to pay out if you die, the main cost comes from age/amount/health. So you'd get it cheap now probably so if you really wanted the security to leave to someone then fine but it's going to be like a whole new policy based on your age/health etc when you got to increase it. It's not like you are actually contributing to any future benefit, you pay this months premium and you don't die then it's gone! It's a bit like car/house insurance, if nothing happens then no payout.

Henry Ford III

You've no need for Life assurance OP.

If your circumstances change and it becomes necessary you can deal with it then.

Peregrinus

There are two theoretical reason why you might effect life insurance before you have any dependants. Both assume that you expect to have dependants in the future and, when you do, you'll want protection for them.

The first reason is that, for term life assurance (pays out if you die within the term; doesn't pay out if you survive the full term), it's cheaper the younger you start. You might, say, take out a policy that will pay out a lump sum if you die before age 65, on the thinking that, if you die before age 65, your dependants will be at the loss of your earnings but, if you live to 65 your earnings will stop them anyway, so you death won't create the same financial problems. As the years go on and you get older, your chance of dying goes up and up. When quoting you for the policy the insurance company will average out your risk of dying over the whole term and quote you a flat monthly premium. So the more young, healthy years you include in the term, the lower the monthly premium will be. On the downside, the more monthly premiums you will pay, and some of them will be paying to provide protection in years when you have no-one to protect. But you will be getting very cheap protection in the later years of the term.

The other reason is that - God forbid - you might develop a medical condition that makes insurance difficult or impossible to obtain or, at best, very expensive. If you put off taking out insurance until you actually need it and, before you need it, you are diagnosed with multiple sclerosis or a brain tumour or whatever then, when you do need insurance, you're rightly stuffed. I stress that this is a very small risk but, if its a risk that bothers you, then effecting insurance now does protect against that risk.