Why You Need Life Insurance When You are Young
Life insurance is one way you get to protect your family and loved ones in case the unthinkable happens. The proceeds from life insurance create a safety blanket for your family and protect their financial future.
Life insurance gives you the peace of mind you need regarding your family. It replaces the lost income for your family if you leave behind dependents that needed your paycheck to cover their daily expenses.
This insurance also reduces the stress of burial or funeral costs, as well as any other expenses related to death. Given that the median cost of a funeral is $8,508, according to the National Funeral Directors Association, this makes a life insurance policy a potentially good investment, relieving your loved ones of the financial burden associated with the costs.
What’s more, the payouts are tax-free, and coverage can often be bundled with other sorts of insurance. Many companies even offer discounts if you take a joint policy with your spouse.
That’s all well and good. But if you are a young adult, does it really make sense to have insurance? After all, you are not as likely to have a spouse or family. You probably don’t have dependents to worry about right now. A survey conducted in 2017 found that sixty-five percent of young adults between 18 to 29 don’t have insurance. The most common reason, given by 71% of non-coverage owners, was that they were healthy and young.
However, the fact of the matter is that life insurance can be incredibly beneficial for young adults. Here’s why you need insurance when you are young.
It’s Less Expensive
The first thing you should know is when you buy life insurance in your 20s, it will be less expensive. In fact, the younger and fitter you are, the less money you have to fork out for it.
You’re Likely to Start a Family at Some Point
You may not have a spouse or children in your 20s, but that’s likely to change as you grow older. You may decide to settle down in your 30s, or even in your late 20’s. That’s when the idea of life insurance will start to have greater appeal. But by that time, you will probably face higher premiums. Take advantage of life insurance when you’re younger and the premiums are lower.
Life Insurance Helps You Pay Off Debts
Life insurance serves more financial needs than simply acting as a security blanket for your family. You can also use it to pay off debts on your estate – debts like student loans. The average student loan owed by people in their 20s is more than $22,000.
This insurance policy helps cancel and discharge these loans, and this is inclusive of Parent PLUS loans. (It is not, however, inclusive of private student loans cosigned by your parents. This is because cosigners will still be expected to pay the amount owed. However, a life insurance policy could help your parents with their portion of the debt.)
Build Cash Value to Save Money
The cash value life insurance, also called the cash surrender value or surrender value policies
However, you can also gain access to your cash value as a policy loan, use the cash value to pay premiums or make a partial withdrawal.
D Zone Insurance Services specializes in determining the best