Young And Restless But Got Life Insurance: Why Life Insurance Is A Must-Have For Every Young Person

Building a good financial foundation an early age is a matter of having the right tools. But first things first. You need a budget, especially if you want to have an emergency fund, save for retirement and pay off your debt. Life insurance is something to consider given the many benefits it offers – even at a young age.

A recent survey found out that 65% of young people ages 19-29 don’t have life insurance – most of them believe they are young and healthy and don’t need such things. While being young is great, it’s also wise having a more realistic point of view towards life. In other words, things happen. In fact, they happen every day. When in doubt, check out a news app of your choice.

Benefits of life insurance for the younger crowd

Life insurance will fill different financial needs. If you are married, it will replace lost income for your spouse, children and loved ones so they can cover the common monthly expenses. If you are in your 20s, you are probably single, but you won’t stay that way forever – most people don’t. If you decide to settle down in your 30s and purchase life insurance by then, chances are the premiums will be higher. In other words, life insurance for young adults is cheaper.

Besides replacing lost income, life insurance can be used to pay off your debts. In your 20s, school loans are probably your largest debts.   If your parents cosigned you on your loans, and you die, your parents are expected to pay the remaining amount. If you have life insurance, however, your parents may be able to zero out the remaining debt. Life insurance can also help with funeral and burial costs, among other financial expenses – even when you pick a small life insurance policy.

What type of life insurance do I need?

There are two main categories: term life and permanent life insurance. Term life will cover you for a set term while permanent life will cover you as you continue to pay the premiums. Term life covers a death benefit to the beneficiaries when death occurs prior to the term expiration. You can purchase a policy for as low as $5,000 or as much as $2m, based on your specific situation. One type of permanent life is whole life – universal life is another. They won’t go up or down over time.

So, which one is the best choice for your buck? Term life has lower premiums when compared to permanent life. If you are starting your career, a lower premium may suit your budget. However, if you purchase a permanent policy you can accumulate more cash value.

Think about how much coverage you need. Then, think about what you can realistically afford. Check with your employer to see if life insurance is something they offer – you may be able to get a good discount when purchasing life insurance through your employer. But even if your employer doesn’t offer such benefit, life insurance is more affordable than you might think. Get a quote here.

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