Life insurance for young adults – You may think that life insurance is only for old and sick people. After all, this insurance is designed to help families after a loved one passes away. Yet even if you do not think you need life insurance, you should buy it as soon as you can. Here are some reasons to purchase life insurance at a young age.
You Are More Likely To Get Coverage
Insurance companies do not like risk. They do not want to insure individuals who have myriad pre-existing conditions. Some insurers thus ask various health questions before deciding whether to accept or reject an application. As a result, those with numerous physical issues often have trouble getting insured. You should thus apply for life insurance when you are healthy and more likely to get approved.
You Can Save Money
Similarly, life insurance is relatively inexpensive for younger individuals. Insurance companies realize that adults under 30 years of age are less likely to have serious health problems such as high cholesterol or blood pressure. Insurers thus charge lower premiums to these individuals. You can look at insurance quotes online to find out the cost of a typical policy in your city.
However, you may be able to get $200,000 to $300,000 in coverage for just $15 or $20 a month. Even just waiting 10 years to purchase your life insurance can make a big difference. Depending on the size of the policy, life insurance for 35- or 40-year-olds can cost $50 or $100 per month.
You Can Protect Your Family
Sadly, younger individuals die all the time. If you pass away unexpectedly, you will no longer be able to provide for your partner or children. Even if you are not married and do not have any children, your parents may have to spend thousands of dollars for a funeral and burial. You and your parents also likely co-signed loans for your education and vehicle.
While federal student loans can be canceled following the borrower’s death, the same cannot be said for private loans. Your premature death could thus force your mother and father to pay off your portion of this debt. Life insurance can help cover these and other expenses.
You Can Spend Withdraw Some of the Funds While You Are Alive
You may not want to spend money on something that cannot be accessed until you die. However, permanent life insurance policies often build up cash value that you can utilize prior to your passing. Permanent life insurance, as its name implies, is intended to last for your entire life. It is different from term life insurance, which only covers a predetermined number of years. Term life insurance is thus cheaper than permanent life insurance is. Permanent life insurance, however, is a better investment for individuals in their 20s or 30s.
This is particularly the case for policies that offer cash value. These policies put a portion of your premiums towards your death benefits and another portion into an account that accrues interest. You can then withdraw the funds or take out a loan for the amount in the account.
This money can be used for major purchases such as homes or weddings. You can even use the cash value funds to pay your life insurance premiums. If you want to take advantage of this cash value but fear lowering your death benefits, you can always purchase both permanent and term policies.
You Can Leave an Inheritance for Your Kids
As a 20- or 30-something, you likely do not own a home or other assets yet. If you purchase life insurance, you will at least have some funds to pass on to your children. Do not wait until retirement age to get life insurance. Younger people are more likely to get approved for life insurance. Their premiums are usually cheaper, as well. You can even use the cash value of your policy to make large purchases while you are still alive.
