Deciding to buy life insurance is an important financial decision. Choosing to buy it when you’re in your 20s can give you important advantages that you probably won’t get as you age.
Five main reasons why you might want to buy life insurance when you’re in your 20s
Lock at a lower cost in the long run
In general, the younger you are, the lower your costs for life insurance will be. As long as you’re in good health, buying life insurance when you’re young means you have to pay lower premiums as long as you keep the policy.
With term life insurance, for example, your payments may stay the same from the time you purchase the policy, unless you increase your coverage. Therefore, buying it in your 20s can save you money for the annual contract you own it compared to stopping buying it when you’re older.
Qualify for coverage while you’re healthy
Age and health are two factors that insurance companies consider when pricing life insurance. In general, you tend to pay less for life insurance when you are younger (and perhaps healthier) than when you are older. That’s because as your life expectancy begins to decrease, the likelihood that the life insurance company will pay a claim begins to increase.
So it’s not surprising that if your family has a history of cancer or other chronic health conditions, such as diabetes, buying life insurance before you can start. Getting started with any medical problems can help you avoid higher rates that could make insurance less affordable.
Pay off debt
Got a private student loan? Or a new car loan? Life insurance can protect co-signers (if you have them on your loan) from liability to pay the balance if you pass away suddenly. And if you bought a home with your spouse or loved one, receiving money from your life insurance policy upon your death can help them replace your income and ease financial stress. when it comes to making those mandatory mortgage payments.
Financial protection for family and loved ones
Life insurance can protect people who depend on your income to cover daily living expenses, especially if you:
– is the main earner in your household.
– Caring for elderly parents or difficult family members.
-married and with children (or expecting/adopting).
With life insurance, the money they get from your policy can ensure they have the financial security and stability to maintain the standard of living you’ve established for them and help them keep paying. for everyday things like groceries, dependent care, education, etc., if you weren’t around to support them.
Make sure your final costs won’t be a burden
According to the National Association of Funeral Directors, the average burial and funeral costs can be as high as $7,848. Life insurance can give you peace of mind knowing that these eventual expenses won’t become a financial burden on your family or loved ones, in the event something unexpected happens to you. .
Buying life insurance in your 20s is a good idea if you:
- Have student loans, home mortgages, or other outstanding debts
- Have a family that relies on you financially for a living
- Want to lock low coverage
- Generally good health
- Want the assurance of knowing your final expenses will be covered, just in case something happens
