Being single comes with unique financial responsibilities. Whether you're focused on your career, managing student loans, starting a business or planning for the future, one critical consideration may get overlooked: life insurance.
Many people believe life insurance is only necessary for families with dependents. However, the reality is more nuanced. Single adults face specific financial obligations that life insurance can help protect against.
This guide explores why single people need life insurance, the types of coverage available, and how to select the right policy for your situation.
The short answer is yes. And here’s why:
Even without dependents, you typically have:
Your income supports your lifestyle and financial goals. If you were to die unexpectedly, your loved ones may face hardship covering these costs. Life insurance replaces that lost income, helping to ensure your obligations are met.
Funeral and burial costs are significant expenses that fall to your family or estate. A life insurance policy can help ensure these costs won't burden your loved ones.
Regardless of your marital status, you can choose from different types of life insurance. The two main types are term life insurance and permanent life insurance. You can also have multiple policies to accommodate your financial needs and goals. Here’s how it works:
Term life insurance provides coverage for a specific period (anywhere from 5-40 years). If you die during your term, your beneficiaries receive the death benefit.
Best for: Single people seeking affordable coverage to help protect their loved ones
Benefits:
More affordable option for young, healthy adults
Permanent life insurance covers you for your entire life. Some permanent policies may also build cash value over time.
Best for: Singles seeking permanent, lifetime protection
Benefits:
Many singles benefit from a multi-product approach combining both types of life insurance, depending on their financial situation and goals.
Different coverage needs. Use term insurance to help cover short-term obligations (e.g. mortgage, loans, upcoming expenses) and permanent insurance for long-term needs or final expenses that will exist throughout your lifetime.
Locking in rates early. A smaller permanent life insurance policy purchased while young locks in low rates permanently. Add term insurance for additional temporary coverage at a lower cost.
Building cash value gradually. Affordable term insurance provides substantial coverage now, while a modest permanent policy can help build cash value you can access later.
Future flexibility. Term life insurance provides basic protection affordably, while permanent coverage offers options (e.g. borrowing against cash value, supplementing retirement income) that evolve with your circumstances.
Learn about owning multiple life insurance policies in Canada
Start with the money someone may need if you die, then subtract anything already set aside. Here are some calculations to consider:
Quick rule of thumb: Single people typically need 5-10 times their annual income in life insurance coverage. This provides a safety net for debt, final expenses, and any dependents or support obligations.
Our life insurance calculator can help you get started. Answer a few questions and get a quick estimate of how much insurance you may need. Think of the estimate as a foundation for your decision, then compare your options and talk to a Sun Life advisor if you want help narrowing them down.
The amount you pay (also known as premiums) depends on several factors, including your age, health, smoking status, coverage amount, and the type of policy you choose.
View Life Insurance Rates in Canada to see how much you might pay in premiums based on your age, assigned sex at birth, smoking status and coverage amount.
| What affects your premiums | How it may change your coverage choice | Key considerations |
|---|---|---|
| Age and health | Younger, healthier applicants may have more options. | Medical questions can affect approval and the amount you pay. |
| Smoking status | Smokers often pay more. | Quitting may help later, but rates still depend on underwriting. |
| Policy type | Term is often more affordable upfront. | Permanent coverage may suit lifelong needs. |
| Coverage amount | More coverage usually means a higher amount to pay. | Choose the amount that suits your financial goals and needs. |
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A common mistake is assuming life insurance is only for people with spouses or children. Single people sometimes overlook life insurance because they do not have dependents in the traditional sense. That said, singles may have aging parents, children, siblings, or relatives in need of their help and financial support. And, debts and final expenses can still create a need for insurance.
Other common mistakes to avoid include:
Even if you have no dependents, you may still need life insurance if you don’t have enough in your estate to cover all your end-of-life expenses.
If you don’t have children, you may still need insurance to cover other needs. For example, you may want to provide a fund to cover your end-of-life expenses, like the cost of a funeral and other associated costs (burial plot, probate, legal fees, etc.), and to clear any debts you may have at death. If your parents are nearing an age where they could need long-term care, you may want to leave something to help care for them if you die before them. Life insurance can also provide the money needed to care for a cherished pet after you’re gone. You can also use life insurance to leave money to your favourite charity or charities at your death.
Raising kids on your own? Life insurance can be a lifeline. Here’s how.
Learn more about the differences between these two types of life insurance.
Practical tips to help your money go to the people and causes you love.
This information is meant for educational and illustrative purposes only. Some conditions, exclusions and restrictions apply.
Reviewed by Catherine Malone
