Why Young Adults Should Consider Life Insurance
Getting a life insurance policy may not be at the top of your priority list, especially if you are a young adult. People at a younger age are more likely to be healthy, unmarried, and without children. It makes sense to wonder why you’d need to pay for life insurance premiums at this stage in your life, especially because young adults are more likely to have part-time or entry-level jobs which pay less. However, you may not be unmarried and without children forever. Retirement may seem like a long time away, but it will be inevitable.
Life insurance is a financial tool capable of handling big unforeseen events. Used appropriately, life insurance offers other potential benefits even without the death benefit. It can be a way to save for you and your family’s future in a way you may not be able to take advantage of if you wait until later in life. Here are a few reasons why life insurance can be a sound financial investment for young adults.
It Costs Less
Someone in good health pays less on a premium than someone in poor health. Younger people are less likely to have high cholesterol, high blood pressure, or other chronic illnesses, so they tend to be less of a health risk than older people. This means they can lock in at a better rate than if they waited until they were older. All other factors being equal, it is always cheaper to buy life insurance as a younger person.
Many whole life insurance policies offer ways to complete your premiums within a fixed amount of time, such as a 15-Pay, in which you pay your premium for 15 years, and then you won’t have to pay anymore. Your policy will remain in place until your death. By getting life insurance at a younger age, you can save thousands of dollars in premiums.
It Protects the People You Love
The death benefit to life insurance is easy to understand: it’s a way to help take care of your loved ones after you pass. But there are other benefits as well. What if you have student loans, or credit card debt, or financing for a car? You do not want to pass your debt obligations on to your family. Life insurance protects your family or loan co-signers from the burden of taking over your debts.
If you are on a tight budget, a term life policy is a way to get coverage for a specified length of time. Once you’ve paid off your debt, you can let the term coverage lapse. One type of policy this strategy is useful for is called decreasing term insurance, which is where the value of the policy declines over time proportional to the decrease in liability. If your debt burden drops, you won’t need as much coverage as when your debt was higher.
It Helps You Build Credit
In addition to term life policy, there are many other types of life insurance. Indexed universal life insurance (IUL) helps protect your loved ones from the unexpected, and it also helps you save for retirement. If you need a loan, you can borrow against your policy. You can also make early partial withdrawals on the policy.
IUL policies can also be a great investment strategy because they earn interest based on market performance while also protecting you from market downturns. The premiums you pay are credited with the interest earned, so when the market does well, so do you. During a market downturn, the credit is zero, but the value of the policy doesn’t change.
It Protects You for the Future
You may not be ready to settle down and have kids just yet, but that may not always be the case. One day, you may have a spouse, or kids, or aging parents who rely on your income to get by. If you wait until that day to start a policy that will help them, it will be much more difficult and expensive to get the coverage you need.
Contact Louisiana Farm Bureau Insurance
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