Back to top

Three Types of People Who Often Underestimate Their Life Insurance Needs

Life Insurance

Some people think life insurance isn't for them. Maybe they're single. Maybe they don't have kids. But everyone will have funeral expenses and are likely to leave behind other financial responsibilities.

Family around table.

Life insurance can help cover these financial obligations, relieving loved ones from shouldering the financial burdens.

Life insurance is simply an agreement to pay a beneficiary when the insured dies. Funds from life insurance can help with final expenses, medical bills, mortgage payments and other financial responsibilities. These responsibilities can easily affect others outside of a spouse and children.

Here are some reasons why singles should be covered, as well as a couple other types of people who may not realize the importance of life insurance.

Single People

Just like married people, single people also need coverage for final expenses, such as funeral costs, medical bills and legal fees. The median cost of a funeral alone is more than $7,600 (source: National Funeral Directors Association). A sibling, another relative or a close friend will have to deal with these issues. Without life insurance benefits, they may have to deal with the expenses, too.

It's also common to carry unsecured debts like personal loans, private student loans and credit card balances. Depending on their terms, these debts will likely need to be settled after the owner dies (especially if their estate cannot cover the debts). If any open loans have co-signers like parents or business partners, those people will typically be financially accountable.

Small Business Owners & Entrepreneurs

More than ever before, people are inspired to follow their dream of building a business. The prospects are exciting but what often accompanies success is debt from small business loans and investments.

Small businesses and entrepreneurial ventures rely on the owner's ability to continue working. If tragedy strikes and their business interests are not secured by life insurance, the fallout can adversely affect business partners, employees and investors.

Caregivers to Family Members

Over the years, the tables often turn from parents raising kids to the children becoming caregivers themselves. When the caregiver passes first, parents are left with the grief of losing a child and the struggle to care for themselves. No one wants that for a parent.

Beyond making sure they can cover their own final medical expenses and funeral costs, the insured can help their parents to get the care they need.

This also applies to siblings or other family members who need hands-on care due to disability, long-term illness or injury. That is the very purpose of life insurance: knowing that loved ones, no matter who they are, will receive the care they need.

Variations in Life Insurance Policies

While the purpose of life insurance is fairly simple, there are a number of variations. Namely, coverage may be term life (coverage ends after a set period, payments never increase) or whole life (lifelong protection, builds cash value over time). More and more people are opting for "wraparound" coverage, meaning both a term policy and whole life policy.

A variety of optional riders are available, depending on the coverage, to help insureds get more from their policy. For example, an accelerated death benefit enables an insured to receive a partial advance on the death benefit value if they are certified by a physician as terminally ill or chronically ill, depending on the rider they choose.

Life insurance from Allstate Benefits offers customers peace of mind knowing that even though they leave behind loved ones, they won't leave behind financial obligations. We offer a variety of life insurance products as well as optional riders like the accelerated death benefit, accidental death benefit, Spouse's Term, Children's Term and more.

Since our life insurance products are offered by employers, insureds enjoy great group rates, no medical questions to answer (subject to exclusions and limitations) and convenient payroll-deducted payment options.

Related Articles:

Small group of people listening to another person.

Which Type of Life Insurance is Best for Your Employees?

Two people helping elderly woman in wheelchair.

Long-Term Care Needs are Rising — How Allstate Benefits Can Help

Young co-workers collaborating at a table.

Offering Health Benefits Can Help Attract and Retain Millennials and Gen Z Workers

We are Allstate Benefits

From innovative group health coverage to our industry-leading portfolio of group supplemental insurance products, we have the experience, knowledge and service you need, and a name you know and trust.

Learn more about us

Allstate Benefits Logo.
Allstate Benefits Logo.

you're in good hands

ECC Monitor: OK