Seven Reasons for Young People to Choose Life Insurance
Many young people think that life insurance is a matter for older people, married couples, or parents with children. After all, young people graduating from school or university and moving off to their first jobs already may be dealing with the financial pressures of paying the rent and their student loan bills. According to studies, people under 30 are more likely to have no life insurance at all. However, there are important reasons why young people can benefit significantly from thinking about life insurance now rather than letting it wait for some future time.
1. You’ll Save Money
Money is one reason why some young people refrain from signing up for a life insurance policy. However, you can save a significant amount if you opt for life insurance from a younger age, especially if you are also in good health when you take out a policy. The premiums you pay for life insurance take a number of factors into account, but age and health condition sit at the top. However, just because you pose less of a liability for the insurer does not mean that life insurance is irrelevant to you. Tragic situations can leave families and loved ones in the lurch. In addition, starting young can establish a reasonable price for your policy. In many cases, you may be able to lock in a beneficial rate for the entire time you keep the coverage, even as you age. If you only purchase a policy after you reach 30 or 40, you won’t enjoy those substantial savings over the years.
2. Your Family May Need the Help
Death is a difficult and uncomfortable topic. One reason why so many people delay in signing up for life insurance is the fact that most young people don’t like to consider the potential of passing away, especially at a young age. Tragic circumstances can happen to anyone, however, and life insurance can be important to your family in an unexpected crisis. Funerals tend to cost between $6,000 and $10,000, a bill that can be difficult to manage for loved ones trying to make ends meet. Even a small life insurance policy can often fully cover final expenses and a funeral, helping your family to say goodbye in a loving and dignified manner.
3. You May Deal with Debt Left Behind
In most cases, your debt dies with you after you pass away. However, many types of debt are actually joint debt rather than individual debt, and these obligations pass on to the co-signer rather than being extinguished at death. Whether you’re struggling with student loans that were co-signed with your parents or have taken out a joint credit card with a substantial balance, life insurance can help to cover this type of debt and protect your loved ones from these additional costs. Life insurance can avoid piling on financial stress to people already navigating complex grief.
4.You Can Build Up Savings
Most young people may want to opt for term life insurance, a renewable policy that covers you for a fixed number of years. However, if you are interested in other ways to build up investments and savings, you may want to think about whole life insurance, a permanent policy designed to continue until death. Whole life insurance costs more than term life insurance on a monthly basis, but your policy develops a cash value over time and is often exempt from some types of taxes. Later in life, you could even take a loan from your life insurance policy or cash in a portion.
5.You Are a Parent
Many young people buy their first life insurance policy when they have children. While many people are waiting to become a parent, others have kids from a young age. Regardless of your age, life insurance can be an essential step to protect your children in case of an unexpected tragedy. Life insurance can be especially important if your partner stays at home to care for the kids because transitioning back into the workforce can be a costly and time-consuming process. Life insurance can help provide a cushion and cover the expensive costs associated with childcare. An insurance payout can even go to build up their college funds, especially if they have only one living parent to provide for them.
6. You Need More Than Your Job Provides
You may already have some form of life insurance offered to you as part of your employer’s benefits package. Especially for young people just starting out, you may just go with what your workplace offers. However, having a life insurance policy of your own may also be a good idea. After all, if you need to leave your job or develop an illness, you may not be covered by the policy at your workplace. It can be easy to forget about taking out a policy if you change jobs or are laid off. By having your own life insurance from the beginning, you can view your employer’s policy as supplemental assistance.
7. Your Job’s Policy May Not Be a Good Fit
In some cases, you may want more coverage than your job offers. However, when you try to add extra coverage to your employer’s group life insurance plan, it might cost more than just buying a policy on your own. If you develop a customized option, you’ll still need to worry about the transition if you change jobs. Getting your own policy can help you get the specific life insurance benefits you care about most.
Entering the workforce is a great time to learn more about money management. At Blue Country Insurance, we offer a range of life insurance options that can help to provide you with more certainty and support your plans for the future. Contact us at (506) 852-8472 to find out more about how life insurance can be a good addition to your financial plan at any age.