International Baccalaureate (IB) Practice Exam

Which of the following types of insurance is not recommended for a young single adult?

1. Life insurance

2. Auto insurance

3. Identity theft protection

4. Health insurance

The correct answer is: Life insurance

Life insurance is generally not recommended for a young single adult primarily because the need for it tends to be more pronounced in cases where individuals have dependents or significant financial obligations that would need to be covered in the event of their passing. Young, single adults typically have fewer financial responsibilities, such as dependents or a mortgage, which diminishes the urgency or necessity for life insurance. In contrast, auto insurance is essential for anyone who drives a vehicle, as it provides financial protection against accidents and liability issues. Identity theft protection is increasingly important in today's digital world, where identity theft risks are prevalent, making it a wise consideration for individuals regardless of their marital status. Health insurance is crucial for managing healthcare costs and ensuring access to medical services, which is necessary for everyone, especially young adults who might face unexpected health issues. Thus, while life insurance has its benefits, for a young single adult without significant financial obligations, the emphasis is better placed on more immediate and relevant forms of insurance.