Life insurance is probably one of the last things on your mind as a young adult. You probably have other priorities right now, like landing a job or paying off your student loans and saving up for that first house. It may seem unnecessary – even macabre (Stop it, old me.) – to plan for your death. But young adults have plenty of good reasons to consider life insurance now rather than later. Read on to find out why it is never too early for you to think about life insurance and how doing so could save you money in the long run.
Understanding Life Insurance
However, let us first start with the definition of life insurance for those who are still not quite familiar. At its core, life insurance is essentially a contract between an individual and the company that sells them economic protection. You pay a regular premium and in return, the insurer promises to pay a certain amount of money for your beneficiaries when you pass away. This is what the insurance industry refers to as the death benefit and it provides your beneficiaries with money they can use to pay expenses or maintain their lifestyle in case something ever happens to you.
Why Young Adults Should Consider Life Insurance
1. Lower Premiums
Why you should get life insurance when young is one of the biggest reasons The premiums you will contribute to insurance are based basically on your age and health. Lower premiums for the young and healthy. You can save thousands on your policy when you lock in a low rate early.
2. Protecting Your Loved Ones
You could be single and not have any children, but you may still have other members of your family who look to you for financial support. That could mean parents or siblings of advancing years. It might alleviate their financial burden if they were to die, in which case a life insurance policy would help. This is even more important if you have a spouse or kids, to make sure that they are protected.
3. Covering Debts
Over half of all households in America hold not-insignificant debt, with the majority owing money lenders in student loans or credit card balances. When you die, your debts do not go away. They could become your co-signer problem, or be deducted from your estate even after death leaving less for your family. These can be covered through a life insurance policy, so the ones you love are not financially burdened.
4. Future Insurability
Right now, your health could take a swan dive any second As long as you secure a policy when young and healthy, this will ensure your insurability. Certain policies even allow you to request an increase of your coverage in the future without taking extra medical exams.
5. Building Cash Value
Whole life or universal life policies have a cash-value component that grows over time. The cash value is accessible for loan or withdrawal and may serve as a financial reserve for the future.
6. Peace of Mind
Life is unpredictable. Life insurance can offer some peace of mind in ensuring that your family is looked after financially should you pass away. This comfort can be unparalleled, offering you with the capacity to live your life just like no one else.
5 Alternatives to Life Insurance
Types of Life Insurance to Consider
This can sometimes be the cheapest route for young adults. It insures you for a set period, say 10 or 20 years (dependent on the policy), and only pays out if you die within that timeframe. Compensation: Best for a certain period, such as while your kids are growing up or until you’ve paid off the mortgage.
Whole Life Insurance
Whole life insurance – Insurance that covers you for your entire lifetime and has a cash value component that increases with time. Though it is costlier than term life, this could be a right fit when looking for lifelong cover as well as an option to get cash value built up on the policy.
Universal Life Insurance
This is a type of permanent life insurance that, you can change your premiums and death benefit over time. It also includes a cash value portion.
How Much Coverage Do You Need?
How much coverage you need will vary based on your situation. A rough guideline is that your policy should be 10-15 times your annual income. But you should also balance this against your debts, future expenses (such as saving for children’s education), and longer-term aims.
Getting Started
How to begin with your life insurance:
Know what your needs are: What is the amount of money and time you must put in to fulfill family obligations detected almost immediately or for long-term necessities?
Look into different policies to pinpoint one that is right for you and affordable.
You should then use an independent online comparison website to obtain quotes from several insurers.
Answer truthfully in your application so that the policy is not void and you are required to make a claim.
This is why we ask that you routinely review the policy to ensure it applies as your life situation changes.
Conclusion
Life Insurance Seems as the Ultimate in Premature Planning, but Here’s Why You Should Get it Anyway When you’re Young Not only does it protect your loved ones, and lock in low rates but you still have the flexibility to buy more later & leave you some peace of mind as you navigate through all that young adulting has for or against ya. Keep in mind, that life insurance is not for you — it’s really about the ones that are left behind. When you plan, you are planning for your legacy to be one of care and financial soundness for those closest to you.
Life Insurance for Young Adults: Why It’s Never Too Early to Start [Draft 500+ Words] In this article, we discuss the top reasons young adults might need life insurance and what types to consider as well as provide an estimate of how much coverage you may want on your policy How Much To Get Started.
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