As a young adult starting out in the world, I guarantee that the last thing I thought about was life insurance.
By the time I did purchase my life insurance it was almost double the cost I would have paid if I had started years earlier. Often, we want and need life insurance many years after the cost is affordable.
Does life insurance for young people even make sense?
You do not need a spouse, children or home ownership to reap the benefits of affordable life insurance. Now, I am not suggesting that you blindly purchase life insurance. There are many different products and it can be costly. This should be a well-informed decision that fits your cash flow plan.
As a parent of a 20-year-old and a 22-year-old, I am willing to pay the $12 a month it costs for each of their insurance policies. It is a cheap gift that they will appreciate and thank me later for.
Here are Three Reasons Why Young People Should Have Life Insurance:
- You Want to Pay as Little as Possible for the Long Term
The younger and healthier you are, the cheaper the policy payments will be. Insurance is based on health and age and therefore, the cost rises the longer you wait. You will want to lock in your cheaper insurance payments and your good health sooner than later.
2. You Want to Protect Your Ability to Purchase Insurance in the Future
I know it might be impossible to conceptualize our future-self aging along with possible declining health. I remember when I was twenty years old and could not fathom ever being in my forties! Many things can happen over the span of twenty years and it is important to secure our options for our future financial self. For example, imagine you have purchased insurance young and with no medical conditions, and in ten years time you develop high blood pressure, diabetes, or some other serious medical condition. By purchasing life insurance at a young age, your payments will not increase. You have locked in your current good health for future pricing and you will not be declined coverage.
3.You Can Convert Cheaper Insurance to a Permanent Policy Down the Road
Once you purchase an affordable term life insurance policy, you can convert it to a permanent policy without having to complete a medical questionnaire. This means that as you increase your income and become financially stronger, you can start investment savings within an insurance policy. This product is a little more expensive and serves as a more long-term solution for future financial planning. By first purchasing cheaper insurance while you are young, you have left the door open for you to explore this feature without having to qualify your medical history again.
Building a strong financial foundation must include affordable life insurance. As I get older, I often look back and wish that I had the forethought to purchase insurance earlier. If you are young, I suggest you find out more information and start asking questions. If you are a parent of a young adult, I suggest you start the conversation and consider giving a gift that will pay off for your child’s lifetime.
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