Freedom 55 Financial

Why do I need insurance if I'm young and single?

Protecting your future is smart at any age.

You’ve made all the right moves and have finally been rewarded. All that hard work at school has helped you land the job that launches your career.

Proper money management is the key to becoming financially independent – it gives you the power to make the decisions that shape your life. Long-term thinking inspires you to create and follow a financial security plan that covers the next 40 years or more of your life.

If you haven’t sought professional help in designing your financial security plan, chances are the only insurance you have is automobile or tenant insurance. But why bother? You’re single and don’t have kids. Surely, there’s no need for personal insurance. Or is there?

The importance of insuring your financial future

A solid financial security plan revolves around your current and future income. In devising such a plan, it’s important to think about your financial goals, like owning a house, having kids and enjoying a comfortable retirement.

Getting your investments up and running at an early age is vital to growing wealth. A fast start could translate into owning your home years earlier. Investing with a long-term vision and diversification helps mitigate risk.

Being prepared for unexpected health events

Accidents happen and they could prevent you from working for a few months or even years. A serious health issue could also put you on the sidelines. The probability of either situation happening to you in your lifetime is greater than you might think.

Individual disability and critical illness insurance can address those risks. If you are unable to work due to a serious illness or injury that is covered by your policy, disability insurance provides a stream of replacement income. If you experience a critical illness that’s covered by your policy, critical illness insurance pays a one-time lump sum amount when you need it most, allowing you flexibility and choice to help fund uncovered healthcare expenses, seek the best medical care possible and replace lost income. Both types of insurance can be important parts of your financial security plan and help you continue to achieve your goals if something unexpected happens.

Some considerations about workplace insurance

Many of today’s young people know they face a different career path than their parents. Rather than working the same job for decades, the expectation is that people will switch employers every few years. While this isn’t necessarily a bad thing, it does mean you’ll likely lose the insurance provided by your employer each time you change jobs, and a new employer may not offer the coverage you require.

It’s also important to remember that the insurance you get through your workplace normally provides basic coverage and benefits from a set menu of options. As a result, unless you supplement your insurance coverage, it could be significantly short of your actual needs. The human resources department at your place of employment can give you the low-down on your workplace insurance coverage, and your financial security advisor can help you determine if it’s adequate to meet your needs.

The advantage of buying insurance while you’re young

Buying personal insurance at a young age generally means you’re getting the lowest possible premiums, since risks increase with age. Moreover, many policies allow you to renew your coverage without additional medical exams. Better still, coverage is guaranteed and, as long as premiums are paid as required, only you can cancel a policy.

Why a permanent life insurance policy may be right for you

Without a spouse or kids, it may seem odd to purchase life insurance. However, there are compelling reasons to buy this kind of insurance coverage while you’re young and single.

Consider participating life insurance (one type of permanent life insurance), a powerful tool for retirement and estate planning. Yes, there’s a death benefit but also a guaranteed amount of money that grows inside the policy, combined with the investment performance of the participating account that can increase the value of your death benefit or help pay for future goals like an education fund, starting a new business, or supplementing your retirement income. Keep in mind what you take out is subject to tax.

Permanent life insurance can play a central role in a financial security plan. A financial security advisor has the expertise to help you decide if this route is right for you.

Keeping dependants in mind

People are depending on you, even if you don’t have a spouse and kids. Take your parents – if they don’t have adequate finances, you and any siblings may eventually be responsible for their health and long-term care.

Here are some other instances where life insurance makes sense:

  • You have a family member with special needs
  • You took out a personal or business loan that a family member co-signed
  • You want to leave a legacy to loved ones
  • You want to bequeath a large donation to a charity or cause

Your decision to start and follow a financial security plan at an early age can help put you on track to financial independence. The right insurance will help ensure you stay on that path.


The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.


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