Single with Life Insurance: Who Should be the Beneficiary?

Despite what many people may think, having a life insurance policy isn't just for married people with a family. Even if you're single and older or younger, your death will have some financial impact on others. Consider your "end of life expenses." Without life insurance, who is going to pick up the tab for funeral costs? What about your student loans and other debts? Your mortgage? Even if you don't have debt, buying life insurance as a single 25 year old is much less expensive than waiting until you're 35, married and a father of three as is purchasing life insurance before you have health issues rather than after.

One of the challenges upon obtaining life insurance as a single person is designating who should be your beneficiary. There are several things to consider when making this decision:

Has anyone co-signed any of your loans? The cosigners of your student or home loans in the case of your passing will become legally responsible for that debt. Leaving them enough money to pay it back is a wise and kind decision that will prevent them from financial despair. Will your parents or grandparents need financial help in the future? You may be helping them now, but in the case that you're not around to help later, your life insurance policy could stand in so they're well taken care of. Who would be taking care of your funeral arrangements if you unexpectedly passed away? They should receive enough to afford the funeral you've designated. Are you passionate about a certain cause or charity? You can reserve a lump sum of your policy for an organization you're passionate about so you leave your legacy and make the world a better place.

The worst mistake you can make is not designating any beneficiary for your life insurance policy. Without an outlined plan, your assets will be divided up by a stranger or a judge who determines who receives them; usually, it's divided equally among all living relatives.