How Much Do I Need?

by | Mar. 01, 2010


Dear Dave,

Does a single person with no dependents need life insurance? If so, how much?


Dear Shirley,

A single person with no dependents doesn't need much life insurance at all. You're just looking at enough to cover final expenses and maybe take care of any outstanding debts. In most cases, around $8,000 will cover funeral costs. You just don't want to leave things behind that would end up being a burden to someone else.

Lots of times you'll find there's a small life insurance policy built into your healthcare coverage. Check that out, or get with your human resources department if you have insurance through an employer. The last thing you want is for mom or dad to have to write a check to the funeral home on the worst day of their lives.

But having no dependents is the key here. If you had a spouse or kids, they would need to be taken care of after you were gone. That would change the whole equation. In that case, I'd recommend you have eight to 10 times your annual income wrapped up in a good, level term life insurance policy!


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