For many younger people, the thought of buying life insurance is probably about as far from your mind as it can be. You’re young, and life insurance is something only old people have to think about, right? Unfortunately, nothing could be further from the truth. While you seem to have a long, happy life ahead of you, the fact is that accidents and other problems can arise. You might be asking what should I buy life insurance now? Discover the advantages of being young when you decide to invest in a life insurance policy.
Life insurance premiums are calculated based on several factors, but one of the main pieces of the puzzle is the applicant’s age. Since the whole point of life insurance is that it gets paid out when the insured individual passes away, the younger you are, the less chance that’s going to happen. Being young means greater savings for you in the form of lower premiums. In the eyes of the insurance company, you’re a much less risky gamble, so they do not need to charge more to offset their potential losses.
When you’re in your 20’s, life insurance is quite affordable. When you get older, though, you’ll start to see those premiums increase. By starting now and locking in a cheaper rate, you’ll save a lot of money in the long run.
Another piece of the insurance factor puzzle is your level of health. It’s probably safe to assume that you’re as healthy now as you ever will be. And you’re certainly healthier now overall than you will be in 20 or 26 years. Just as stated above, the longer you wait, the more you will see those premiums creep up.
If we were to look at the typical 20-something, most likely we’ would find a whole group of other people who rely on this person. And in the future, this group may continue to depend on the person. Consider a young family, just starting out, as well as older parents. Aging parents will need additional help and care as time progresses.
As a 20-something, people depend on you or may rely on you very soon. What would happen to them if you were not around? Like we mentioned before, even the most careful of us can still have accidents or become ill. By investing in an insurance policy now, you are taking a huge step in guaranteeing their financial stability even after you’re gone.
Unfortunately, another typical 20-something characteristic these days is debt. In fact, right now the average student debt amount of a new graduate is over $37,000. And do you know what happens if you pass away? In some situations, your debt might transfer to your spouse or someone else. Taking out a life insurance policy helps make sure they do not have to face off with this debt for years to come.
Students loans aren’t the only kind of debt that could come back to haunt someone else. Credit cards, car payments, mortgages — in the event of untimely death, the creditors aren’t likely to just write off the amount owed and move on to the next person.
For some of you, there’s a good chance that you think that this list doesn’t apply to you because your work supplies you with coverage. While this is a good step, most likely the amount of insurance from your job just isn’t enough. Most work-related plans only offer an amount equal to two or three times your annual salary. The amount might be sufficient to pay off immediate expenses and set up a small safety net. But unless you’re living by yourself with no dependents, then that money will run out sooner than you think.
In contrast to this, most insurance experts estimate that you should take out an insurance plan that’s worth eight to ten times your annual salary. This level of coverage gives your family and others enough money to pay off your debts, handle the bills, and still have enough left over to help them while they struggle – first by coping with loss, and second by learning to survive.
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Category: Life Insurance