Getting life insurance is something to consider if you have loved ones who depend on you. Although no law states that you must have a life insurance policy, it is generally a good thing to have.
Having a life insurance policy in place will ensure that your family is financially protected once you pass away. This coverage is especially important if you are the family’s breadwinner. Or, if it is not intended for your family, then it is recommended to get life insurance to pay your debts once you pass away (if you have any).
But when exactly should you get a life insurance policy? Many people recommend getting one in your 20s.
You may be asking yourself, “should I get life insurance in my 20s?” This article will answer whether it is necessary to get life insurance as early as your 20s.
Should I Get Life Insurance In My 20s?
The short answer is yes. It can be a financially smart to get a life insurance policy as early as your 20s. Whether you have a family, a spouse, or not at this age of your life, many experts recommend purchasing life insurance in your 20s.
There are some reasons why it is recommended to get a life insurance policy, and here are some of them:
Life Insurance Is Much Cheaper In Your 20s
The younger you buy life insurance, the better off you will be financially. That is because purchasing insurance when you’re young enables you to get cheaper premiums for the duration of your term.
Unless you expand your coverage, rates for term life insurance remain the same from the moment you purchase the policy. As a result, purchasing insurance in your twenties can save you money on coverage each year.
For example, the average annual cost of a 30-year term $500,000 coverage for a healthy 27-year-old female is $225 and $286 for a healthy 27-year-old male. If you wait until you’re 37 to buy coverage, your annual premiums will rise to $238 for a woman and $300 for a man.
Pay Your Student Debt And Other Debts In Case You Pass Away Unexpectedly
On the other hand, life insurance has a specific benefit for student loan borrowers: a policy that covers the amount due to lenders can keep those loans from becoming a burden for a loved one. Even with outstanding federal student loans, private student loans aren’t always discharged when you die. When a borrower on a private loan passes away, the co-signer may be responsible for the remaining payments.
According to research, millennials with large student loans have difficulty saving money for purchases such as life insurance or homeownership. 7 out of 10 seniors graduate with debt, owing to an average of $30,000 per borrower.
According to SavingforCollege.com, around 50% of private student loan programs do not provide death releases.
People In Their 20s Are Less Likely To Get Diseases And Other Conditions
Certainly not all young people live a healthy lifestyle. However, is is true that people in their 20s are at less risk of developing conditions compared to older people.
This means that life insurance companies are more likely to approve you for a policy. The reason for that is because you are at less risk to insure.