Life insurance: do single gays need it?

Only if you want your boytoy to live comfortably after you're gone

If you have no one you want to help financially after you die, and are sure the money will be available at your death to take care of your final arrangements, including paying your other financial obligations, then personally I think life insurance is a waste. If you do decide to buy a policy you need to buy it as early in life as possible as the price will only go much higher if you wait until your older.

Life insurance can be passed on to whoever you name as a beneficiary - you don’t have to be married to have life insurance. However, you really should only have life insurance if someone is dependent on you and wouldn’t be able to economically survive if you were gone. Don’t name Pam Hupp as a beneficiary.

OPs has been watching "With Colonial Penn it's only $9.95 a month" commercials.

The older you are, the more expensive life insurance gets.

You might be 40 and convinced you’ll be single forever, but you can’t predict the future. My mom and uncle both met their current spouses in their late 50s (and my uncle had never been married before).

I’m in the military, so even though I’m single and don’t have kids, I maintain the highest coverage possible…just in case. Unfortunately, in an effort to support a former boss who started selling term life insurance policies, I’m way over-insured for a person in my circumstances. Still, worst case scenario, my siblings, nieces and nephews get hundreds of thousands of dollars…each.

Had a free life insurance policy from Verizon, based on a year's salary when we retired. Each year it was reduced by 10%. Now frozen at half of original value.

R3 Thanks for the funny Pam Hupp reference

I'm a married gay (for now, that is. After yesterday's shocking move by the Supreme Court, the ground beneath my feet) and I don't need life insurance. There is no one dependent upon my income so there is no one to suffer financially when I die. If I had children (ugh), I would see it differently. My husband earns nearly ten times what I do so he doesn't need it. Genesis Legacy is going to cremate my corpse at no cost so my burial is covered. I can't see the point of life insurance in my case.

^the ground beneath my feet feels a bit shaky....

Who's gonna pay for your funeral, OP?

[quote] Genesis Legacy is going to cremate my corpse at no cost

What is that about?

For r11:

[quote]I see job descriptions touting life insurance as one of their employee benefits. -- but that simply doesn't, and will likely never, apply to most gay males?

It's a fairly standard benefit at many types of workplaces. Usually an employee is issued a life insurance policy worth twice their salary, or some similar multipler (a higher multipler is paid should you die on a business flight or business travel or anything demonstrably related event.) To that an employee may add additional coverage for a small added cost charged directly to the employee. Employee issued life insurance for amounts over $50,000 (still, I think) is taxable in the U.S., so you may pay a few bucks a month in tax. This insurance ends with your employment, though it can usually be continued at a much steeper price, the employee taking over the sum formerly paid by the employer only at a much less favorable rate. The basic coverage costs only the tax, so it's a fairly negligible expense.

I shouldn't think it's a great selling point to many prospective employees, it's simply a nice extra bit tossed in. If you had a family or dependents that you wanted to provide for in the event of your death, it's generally a cheaper route of acquiring life insurance than on the open market.

If you're single and have no children, the $225 Social Security Death Benefit remains wirh Uncle Sam. Better get a life insurance policy. Average funeral is $8,000, or so say those commercials.

Funerals are a waste of money. The Genesis Legacy deal sounds good, or you can pay in advance for a simple cremation with the Neptune Society. If your family and/or friends want to get together and toast your memory, they can do that without spending more than it would cost to meet somewhere at Happy Hour.

My dad had me meet with an insurance agent in my late teens, and got life insurance. It was a smart idea....who knew how my life would end up and was being prepared. I could have been married with kids, but it didn't happen that way. I'm leaving my money to charities. I cancelled my insurance a few years ago. I don't feel it's necessary for me.

Did you get anything back for the money you put into all those years, R16?

I'm ashamed to say, I don't remember R17. I think I didn't get anything back...not certain. I should know this. My financial advisor helped with with some debt and ending the insurance was part of it.

I never bought any life insurance. I'm 67. No partner, no children, don't want to leave money to siblings, all older. Have enough money to get me funeralized.

I've also never needed life insurance, but when it's offered as a free benefit by an employer I hate to just leave it on the table. I sign up and make the local Humane Society the beneficiary.

Single gay here - I have basic policy through work as mentioned by others. But when I changed jobs a few years ago I did a supplemental policy for my parents. They were aging and not in great shape financially. As long as I'm alive I can help take care of them, but worried about what would happen if I was gone. So this was one way of ensuring that.

My dad passed last year, leaving just my mother. My other assets (retirement, house, etc) are enough that it will be a help to her, so I do plan to cancel the supplemental policy at the next open enrollment. Slight off topic, but since she is on medicaid I have set it up so that she will not be my direct beneficiary. Not only would she lose her benefits, but she's not sophisticated financially and I would not want to burden her. I also worry about a con artist or sleazy person talking her into shady investments. When i pass, my will states a trust is created. My cousins will be the trustees, and the funds are to be used for her benefit (likely assisted living). If she passes first, I'll just revise my will.

While it's true that life insurance is cheaper the younger you are, it's almost always reviewed the older you get. Which usually means the insurer will want a larger premium to provide the same cover, or if you want to keep the premium level, the life cover decreases.

I don't have any dependants and I've got some savings (which would more than cover the cost of a funeral) so I see no value in life insurance in my circumstances.

There's no 'right' answer, though. It always depends on the circumstances of the individual.

"If single or divorced, life insurance benefits cannot be passed on to parents or sons and daughters, or even nephews and nieces, right? " What? You can name anyone you want as your beneficiary.

Single and childfree here. My mom is still alive, so her name is on my bank accounts and she's the beneficiary of my 401k. That should more than take care of her in the event of my death. No other people are financially dependent on me in any way, and I don't think you can name housepets as beneficiaries, so life insurance would be wasted money for me.

@r21, you're a smart and good son 🙂

There is an "insurable interest" requirement for a beneficiary, but that applies to a third-party who buys insurance on your life, not insurance you buy yourself. That is, your next-door neighbor has no "insurable interest" in your life so can't insure you, but if you're a key executive your employer probably can.

Further, somebody will be responsible for dealing with your remains, and it's considerate to make them a beneficiary for an adequate amount. Life insurance pays out far faster than a distribution from an estate.

Life insurance is not as necessary as we've all been told - and I say this as someone who worked in life insurance for almost a decade.

A few things:

- If your employer offers life insurance, take it, obviously. Most policies through an employer either require no payment on your part or deduct a minuscule amount from each paycheck. It's an extra cushion for a family member, or you can usually leave it to a charity, etc. (Not sure where you got the idea that you can only have a spouse as beneficiary, OP.) Some policies are "portable" and can be continued after you end work with that company, but that doesn't always make sense to do. Employer policies are usually either whole life (which has a small cash value, but a high cost) or universal life (run as far from this type of policy as you can).

- If you do feel like you want any sort of life insurance, and you're reasonably young and healthy, term life is the most sensible. There is no cash value to this, and it ends after 5 or 10 years, but it does its job and costs less.

I worked for a time for a company that had part of its business in "final expense" and "preneed" policies, which went to pay, uh, final expenses. Preneed is setting aside a policy to pay for your funeral, etc. Those are legitimate reasons, I think, to get a policy or assign one, but those are generally smaller face value.

PS: If you're an eldergay and need to "spend down" for Medicare/Medicaid, and you have any kind of whole life policy, you might be advised to assign an existing policy to an irrevocable trust for funerals/final expenses. The idea is to get anything out of your name that you could otherwise liquidate for yourself, so you can still use it but yet it doesn't count toward your asset count for Medicare/Medicaid.

PS The term life suggestion I outlined above is IF your employer isn't providing you coverage and you think you'd like to get some on your own.

[quote]Average funeral is $8,000, or so say those commercials.

I think most gay people prefer to be cremated, so the cost is half that. Unless you are some bigwig, or have a large family, most people don't have big funerals anymore, especially gay people.

R29 You never know how or when the end will come. Maybe you'll be swimming down in Mexico and have a heart attack.

Again, it goes back to showing basic consideration for whoever gets stuck dealing with what's left of you.

R5 You hit the nail on the head (and others said this too). If you want to leave something for someone then Life Insurance is a cheap and easy way to give someone thousands of dollars. It does not have to be a spouse or your kids. It is also something that passes outside of probate. You don't have to go through any proceedings to get it. The life insurance company cuts the beneficiary a check upon death of the policy holder.

It also is not impacted by a Will. So it doesn't matter whether or not the person has a Will or if the Will is all fucked up or ends up getting contested, your Life Insurance Policy is a separate contract and remains unaffected. You should get Life Insurance if there is someone you want to leave some easy cash!

We're buying a house and I just asked my partner if we should get it (we're getting married Wednesday). If one of us dies the other has plenty to pay off the mortgage. We decided no.

R33's situation is one where I'd actually get a term policy.

[quote]You might be 40 and convinced you’ll be single forever, but you can’t predict the future. My mom and uncle both met their current spouses in their late 50s (and my uncle had never been married before).

Shouldn’t their “late 50s” new spouse already have their financial life in order by that age? They shouldn’t be dependent on someone else’s life insurance they just met in their 50s.

Some of you are just not that good at thinking about finances.

I took one out on my sickly sister.

R35 God forbid you fall in love with someone who doesn't "have their financial life in order."

We all have our priorities, don't we.

If you have any heir to "your stuff" at all, and don't intend to be buried by the state in a pauper's grave, you need life insurance.

Thanks, R27! I just started a new job and life insurance isn’t covered for free. I can sign up for group life out of pocket. I’m not sure the difference between that and term life. Is it something you’d recommend? What are your thoughts on long term disability insurance? I did sign up for that at about $1300/yr.

Disability insurance, like travel insurance, is a great idea in principle but the devil usually lies in the fine print detailing when they pay out. There's also the risk of being locked into future premium increases, and of inflation over the decades devastating what today seems an ample payout. To mention just a couple of issues.

May I ask how old you are, R40? Long term disability insurance can be a very valuable benefit - but as R41 says, there are twists and turns along the way.

So to answer your questions, here's a breakdown -

You mention group life. Group policies are generally what an employer gets. They hold the actual policy, but you're issued a certificate showing you're a group member. Individual insurance policies are, well, individual, and issued in just your name. There isn't any different in how the proceeds are paid to the beneficiary. Group life is an easier way for a company to manage the participants and the billing.

So what I said was more about the structure of how the policies are issued.

There are various types of life insurance policies but most of the ones out there are either whole life or term life.

There are two main differences between term life and whole life. - Term life is usually at a somewhat lower cost. It is "in force" (active) for a specified period of time (5 years, usually) at a specific premium amount. It can be continued/renewed every 5 years, though the premium costs go up a little bit to reflect your age at time of renewal. If you end the policy or stop paying it, that's it. There's no cash value. - Whole life is a policy that isn't usually set to a specific term. Monthly premium on this usually isn't quite as cheap as term. Most whole life policies will generate a cash value. This means that once your premium pays what insurers call "cost of insurance" (mumbo jumbo that means they got paid and made a little money) then the remainder of what you paid is applied to your cash value. You can pay more than your premium amount and then expedite cash value accruing, though interest rates are not usually significant enough to do that.

I mentioned Universal Life in a post above above, and it was a variation of whole life that a lot of employers still use. If I remember right the interest rate was tied to the Fed rate or something like that. It was sold with the idea that eventually, your cash value would accrue so much that the policy would pay for itself. However, when interest rates dropped significantly around 2000ish, these policies all ran out of money. Insureds didn't know their interest rates dropped and also, as they got older, their cost of insurance increased, so it drained all the value and most policies ended. Like I said, run from this one. I had one like this with my work and took it, kept it for the time I worked for them, and then cancelled the policy and took my cash value once I left.

[quote]Unfortunately, in an effort to support a former boss who started selling term life insurance policies, I’m way over-insured for a person in my circumstances.

Your former boss's side-hustle is not your responsibility. You sound like Mr. Nice Guy.

Life insurance is for people who live in tenuous circumstances with family or friends dependent upon them.

Life insurance can be a way to make a nice, simple, no strings gift to people upon your death. Sometimes the cost is agreeable or not important to the buyer, and maybe too he knows something to convince him of the worth of the cost relative some other investment or provision.

For people without dependents, generally there's not much point unless you want to provide for elaborate funeral services, American style.

"unless you want to provide for elaborate funeral services, American style. "

My funeral to look like this...

Thank you again, R27. I just turned 42. So I’m hopefully not going to be needing life insurance anytime soon but have enough working years ahead of me that a disability would really affect my long term future. I do know one person on disability. She suffers from migraines that made it impossible for her to work. It took some effort, but her insurance company covered it. She now collects 60% of her salary to be a stay at home mom. And given that she was a highly paid attorney, she’s making 6 figures on disability.

[quote] Life insurance: do single gays need it?

The answer: No.

A single gay without minor children does not need life insurance.

Also, why create an incentive for someone to murder you.

If you are feeling generous, the annual IRS gift exclusion for 2022 is $16,000.

R45...Like Annie in movie, Imitation Of Life...lol.

I committed to whole life 10 years ago at 45. I regret it. $8k/year for $300k benefit. I looked at it as an investment - thanks to a work associate (who I needed to win over for a deal) being the sales person. But now I’m obligated to pay $8k/year for another 10 years. After I’ve already paid for $80k over past 10 years. And the cash surrender value takes longer and is less valuable than I originally thought.

If I live past 65 - which my genes don’t dictate - it may be worthwhile in that I won’t have to pay annual premiums as it’s covered by the interest. I look at it as a gift to my long term partner - as I don’t believe in the financial and legal obligations of marriage. As we‘ve tried to maintain separate finances - and he has done a horrible job managing his - it alleviates any guilt I feel. My other assets will be given to a variety of family and friends who mean a lot and have done a lot for me. Assuming I don’t live too long and deplete all of my assets.

[quote] Life insurance is for people who live in tenuous circumstances with family or friends dependent upon them.

That's isn't quite so, LOL.

It isn't for everyone. But I'd hardly say "tenuous" is the sole qualification. It makes sense for a person who's married and has perhaps some long term debt like car payment, mortgage and CC debt - it takes care of those types of needs.

It was probably more of a needed product in the old days, where a woman didn't work and if her husband died, that money would give her a few years of financial security to find either a new husband or a job.

Live to 100 OP, then cash the check!

All you really need is enough to cover funeral expenses and to pay off any of your existing debts.

Why the fuck do people pay so much for funerals that they actually worry about the cost??

You’re not even alive to witness it!

Give your body to science, cremate, whatever—do not pay thousands of dollars and go into debt for a burial

[Quote] All you really need is enough to cover funeral expenses and to pay off any of your existing debts.

Life insurance goes to someone else, who many not use it to help you

[quote]Life insurance goes to someone else, who many not use it to help you

Funerals and debt settlement and help are not for the benefit of the dead.

[quote] If you're single and have no children, the $225 Social Security Death Benefit remains wirh Uncle Sam. Better get a life insurance policy. Average funeral is $8,000, or so say those commercials.

$8,000?! Only if you want to be cremated and scattered in a mass grave. 10 years ago a funeral with corpse preparation and casket and service and such was at least $20k.

All the American bells and whistles and shiny rims and "corpse preparation", R56.

Most funerals in Greece are about €2000, in Italy about €1600, in France €3000, in Spain €3000-3500, in the UK about £3000, in Germany €5000. Cremation costs in these countries range from about €750 to €1000.

Jessica Mitford had it right in 1963 in her The American Way of Death.

I just planted my in-laws, and they wished to have the old-fashioned, ornate casket and headstone.

For both of them it was about $50K.

Me? Cremation with a memorial service and party.

Never tire of watching the Nichols and May funeral routine.

I've had as much disability insurance as my insurer allows since my early 20s. Dad was disabled for most of my life, and it really drove home to me how difficult things can be if you're forced to depend on Social Security alone for disability income. I pay about 1K a year to make sure I won't be destitute if I have a stroke or crippling injury.