Single? You still should get life insurance
Did you know that fewer South Africans are getting married nowadays, with only 2.5 of every 1,000 people opting to tie the knot? What’s more, those who do decide to walk down the aisle are older when they do so, with the average ages of local grooms being 36 and brides being 32, as opposed to 30 and 24 in 2007.
“What this all means is that more and more South Africans are staying single for longer,” says Tasmin Alli, Client Insights Leader and Anthropologist at Metropolitan. “While there is absolutely nothing wrong with being single, the problem is that single people generally tend to not take out life insurance since they believe it is solely for those with a spouse and kids. However, this can have negative consequences down the line for family and friends after the person passes away.”
She elaborates on some of the reasons why single South Africans should get life insurance:
Covering your debts
People who buy cars or homes, for instance, generally need loans from banks or lending institutions to help finance these. Younger or first time buyers might find that their applications are declined by these institutions due to factors like a limited credit history or too short a period of stable, permanent employment. In cases like these, applicants often have a guarantor sign surety to better their chances of approval. In the event of the buyer’s death, the guarantor will have to cough up the cash to cover the loan repayment, whereas if they had life insurance, the policy pay out would cover this. Even if you don’t have a guarantor and manage to get house or car finance, your debt will still need to be settled.
Settling other debts
For those with other debts, these will need to be settled from the proceeds of their estate which can be quite messy for the executor. However, these debts could be settled from the life insurance proceeds so that the deceased’s assets are distributed according to their wishes.
Accounting for end-of-life expenses
While there are those who might be completely debt-free, someone will still need to pay their end-of-life expenses such as funeral costs and lawyers’ fees for wrapping up the estate. Pay-outs from a life insurance policy can cover these and ensure that the deceased’s friends and family members don’t have to go into debt over these expenses.
Taking care of dependants
For those with kids, life insurance is a must since they will be provided for in future. Singletons without children may want to consider other possible dependants like aging parents, a disabled sibling or even a favourite niece or nephew who might need financial assistance with university fees. When taking out life insurance to help these people, it is important to bear in mind how much funding they might need and for how many years.
Minding your business
Business owners who have partners should take out a policy to keep the business going in the event of their death. Ideally, each partner should have life insurance for this very reason.
“It’s always best to take out life insurance while you’re still young and relatively healthy as this will mean more affordable premiums. Speak to an adviser who can help you plan for financial life goals like this one,” concludes Alli.