Should You Get Life Insurance at a Young Age?
Your 20s are full of adventures, surprises, hard work, important decisions, and the start of building a strong financial foundation. As a young and healthy adult, you may be tempted to skip out on purchasing life insurance. After all, you have years of living ahead of you, why do you need coverage? In reality, your 20s can be an ideal time to purchase a policy. Here’s why.
A life insurance policy is a financial net for when you pass away. If you have debt or dependents who rely on your income, life insurance is an important financial tool to have. It helps your loved ones shoulder the financial burden that comes with death. It can help to pay for your family’s living expenses, pay off your remaining debt, and cover your funeral costs.
Not all 20-somethings need life insurance coverage. However, if there are people that rely on your income, then you should consider coverage. Common situations in your 20s where you should consider a policy:
- You have student debt that would be left to a co-signed to pay off if you died
- You have a partner or spouse who you are financial obligations with
- You have parents or other family members who help support financially
- You have children or plan to have them soon
When you know you need coverage, keep in mind that there are generally two types of policies to choose from: term and permanent. Term life insurance covers you for a set term, such as 5, 10 or 30 years. Such a policy is incredibly affordable. Permanent life insurance covers you for your whole life – as long as premiums are paid. It allows you to build cash value in your policy that you can borrow against, making it more costly for some.
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