Life insurance for single people

Life insurance isn’t just for people with children or a spouse. Depending on your circumstances, it can play an important role in your financial plan, even if you’re single and child-free.

It depends on one key question: would you or someone else struggle to get by if you were unable to work or passed away?

If the answer is yes, then  is worth considering. If the answer is no, then a solid emergency fund or Funeral Cover might be a better fit.

Considering life insurance for a single person

To help you decide, here are five common scenarios where life insurance can make sense for single people.

You have a mortgage or other debt

Even small debts can be a burden for the people left behind. If you’ve taken out a loan, credit card, or mortgage with someone else (like a friend, parent or other family member) or if someone has guaranteed your loan, they become fully responsible for the remaining balance if you pass away. They’ll need to continue making repayments from their own income or assets. In the case of a joint mortgage, the surviving owner must take over the full repayments, or (if owned tenants in common) potentially buy out your share. If they can’t afford to meet outstanding repayments, the property may need to be sold.

A life insurance payout can help cover these obligations and prevent loved ones from needing to sell assets or pay out of pocket. If you solely own a home, then being able to take care of the mortgage could buy your family time while they decide what to do with the property.

Similarly, having Income Cover or Mortgage Repayment Cover could be beneficial. It’s insurance that pays you a monthly sum to help cover your mortgage repayments, rent or to compensate you for lost income if you were to become disabled as a result of illness or injury. This allows you to focus on your recovery without worrying about how to pay your bills.

You support someone financially

You don’t need children to have financial dependents. Many Kiwi support parents, grandparents, siblings or non-biological children. Life insurance can provide continued support if something happens to you, covering costs like education, rent or health care.

You own a business or share one with a partner

If you’ve built a business, you’ve likely taken on financial risk too. Life insurance can help your business partner manage debts, cover operational costs or buy out your share if you pass away unexpectedly. Without it, your passing could disrupt everything you’ve built.

You want to leave something behind

Life insurance doesn’t just cover hardship. It can also be a way to make sure your wishes are carried out. You may want to leave money for a niece, nephew or a favourite charity . With a policy and a clearly written will, you can decide exactly where the money goes and how it’s used.

You want to cover end-of-life costs

Even a small policy can ease the pressure of funeral costs, especially unexpected early death, medical bills or care facility expenses. In New Zealand, funerals can easily cost $10,000 or more. Without a plan, these costs often fall to family members. Life insurance or a Funeral Cover policy can take that weight off their shoulders.

What happens if you pass away without life insurance or a will?

If you pass away without a valid Will, your estate may take longer to settle, and your assets will be divided according to the Administration Act 1969. This can cause stress and delays for the people closest to you, especially if someone needs to cover upfront costs like your funeral.

• Having a will means your estate will be distributed the way you’ve requested.
• Some life insurance policies include a ”bereavement benefit” feature which enables a small portion of your life insurance to be paid out on receipt of evidence of death to help cover funeral expenses.
• Having Funeral Cover with named beneficiaries also enables funds to be paid out quickly directly to the beneficiaries, without forming part of your estate.

Having both a will and insurance will make dealing with your passing a little bit easier for your loved ones.

How much cover do you actually need?

Life insurance doesn’t have to be a huge lump sum. If you’re single with no dependents, it may be enough to simply help pay for your funeral. If you have dependents and/or debt, you may need more. Chubb Life Insurance Advisers can help you calculate a realistic amount.

Alternatives to life insurance

If you’re aged 50-80 and your main concern is simply covering your funeral, Funeral Cover can be a simpler option. It’s designed to pay out quickly and typically involves less paperwork or  assessments. Funeral Cover can be especially useful if you don’t need a large lump sum but still want to make things easier for your family. However, it’s important to be aware that, depending on how long you have a funeral cover policy, the total premiums you pay could be more or less than the benefit paid under this policy.

Even if you’re single, naming a beneficiaryon your Funeral Cover policy (when available as an option) ensures the payout goes directly to the person you choose. Otherwise, the money is paid into your estate, which can take longer to process and be subject to legal processes. Keep your nomination up to date, especially if your circumstances change.

If you’re more concerned about what would happen if you got seriously ill or injured, Trauma Cover or Income Protection may be a better fit. These policies pay out while you’re alive and can help cover lost income, living expenses, or recovery costs.

When to reassess your life insurance

Your needs can change quickly. Review your cover if:

• you buy a house
• you take on a new loan with someone
• you become self-employed
• you become a parent
• you begin caring for a parent
• you enter or end a serious relationship
• you write or update your will.

Not sure where to start?  Talk to Chubb Life and we’ll help you find a policy that fits your life now, and adapts with you in the .