Life insurance is a product many people don’t think about until they’re older—when they have families, mortgages, assets to pass along, etc. After all, when you’re young and healthy, the last thing you might be thinking about is what could happen if you pass away unexpectedly. But the reality is, life is unpredictable, and your younger years—your 20s and early 30s, perhaps—are actually a smart time to consider buying life insurance coverage. Here’s why.
Life insurance rates go up in price as you age. As you get older, your chances of getting sick or dying unexpectedly logically increase, so insurance carriers adjust the price of coverage accordingly. That’s why it might make sense to lock in lower-cost coverage when you're younger instead of waiting until you get older. Term life insurance—generally the most basic and affordable type of coverage—may cost less than you imagine, and locking in a low rate now that lasts for 20 or 30 years can deliver value over a long span of time.
A life insurance professional can help you determine how much coverage you may need and can help you lock in a lower cost for a term that makes sense for you.
But besides lower costs, why would you need life insurance coverage at a younger age? Here are three key reasons to consider:
1. Less savings when you’re younger: If you’re just starting in a career, you may not have significant savings to help pay off final expenses if you pass away unexpectedly. Your life insurance payout could help your loved ones pay funeral expenses, hospital bills or any other costs that they may otherwise have to pay out of their own pockets.
2. Protect a young family: If you have a spouse or young family, your passing could leave them in difficult financial straits without your income. Life insurance proceeds could help them with rent or mortgage payments, tuition costs, or any other necessary expenses after you’re gone.
3. Pay off debts: If your parents, spouse or other family members co-signed on your mortgage, auto or student loans, they'll continue to be responsible for payments if you pass away. The same is true for credit cards or any other debts that are a joint account or have a co-borrower. Life insurance could help pay off some of those debts, so they don’t have to carry on the payments without you.
These are just a few of the reasons you might want to consider purchasing life insurance at a younger age. A life insurance professional can help you determine how much coverage you may need and can help you lock in a lower cost for a term that makes sense for you.