Most people think life insurance is for older people. After all, it is a financial product that provides a lump sum cash payment, known as the death benefit, when the insured passes away. Life insurance aims to deflect any financial hardship that may arise from the lack of income the deceased will not earn any longer, plus any outstanding debts or obligations of the deceased that must be paid.
Generally, you need life insurance if other people depend on your income or if you have debt that will carry on after your death. However, the older you get, the more expensive life insurance costs. A healthy non-smoking 20-year old will pay less than someone with the same health profile who is 20-years older. When it comes to timing, the younger you are the better. When you are in your twenties and thirties, you may not consider getting life insurance. However, buying life insurance when you are young can have a number of advantages.
Cheaper rates - When a life insurance company evaluates an applicant, they look at the likelihood of the applicant filing a claim in the future. The company’s greatest risk is the applicant’s death when the company has to pay out a death benefit. However, that is not the only consideration. Another is the policy’s expected duration. The insurance company benefits more the longer you keep the policy. The younger you are, the lower the insurance premium.
Protecting your loved ones - You can protect your family by purchasing life insurance. If you have children, whether now or later, you will have a life insurance policy to protect them if something happens to you. If you don’t have children, it can still be a benefit to your loved ones, such as parents, a spouse, or other dependents.
Easy approval - Obtaining a policy while you are free from any major medical concerns, will lower the cost, with no change of a premium hike later. This is because people with no medical history pose fewer risks and are less likely to be rejected for insurance coverage.
Flexibility in adding additional benefits - Your ability to purchase add-ons is determined by age and health. Buying when you are young and in good health it is simpler to get add-ons like income rider benefits, premium waivers, and accidental death benefit riders. For example, if you become disabled due to an accident and lose your job, your term policy can provide you with additional income.
Increased financial stability - As a long-term financial planning technique, permanent life insurance coverage may be helpful to young individuals. Permanent life insurance can include a component of investing. The sooner you start saving and investing in permanent life coverage, the higher the cash value will rise over time, just like other savings or investments.
Paying off debts - If you have any debts such as student loans, a mortgage, or other consumer debt, purchasing life insurance can help pay off those debts. It can also assist in paying off additional financial obligations your loved ones may face if you pass away.
Protecting your business - If you own a business, life insurance might help you plan for the future. If you have a small business that has business debt or continuing business needs to cover, your life insurance policy can help your family handle your business as you would have liked.
You may be young and carefree today, but as you grow older, your responsibilities also grow. When it comes to buying life insurance, younger is better. Want an idea of what life insurance you could qualify for? Answer a few quick questions here to start your quote!