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Five Reasons To Buy Life Insurance Before You Turn 30

Retirement

Let’s face it. Death never comes informed. It’s unexpected, especially if you’re in your 20s. As a responsible adult, you will have a family that is completely dependent on you. It’s your duty to ensure that they are protected in case an unexpected event happens to you. LIMRA, a financial research and consulting service firm, conducted a survey and found that three out of 10 Americans in their 20’s are not insured sufficiently.

Here are some reasons why you need proper life insurance coverage as soon as possible:

1. Your work insurance is insufficient

The U.S. Bureau of Labor revealed that three out of ten full-time employees are offered life insurance coverage by their employers. However, even that insurance is inadequate in terms of benefits.

Frederick, a representative from the research institute, said the majority of employees get coverage equal to 1 or 2 times their annual salary. It could be sufficient enough for someone with no dependents whereas employees who have non-working wife and kids to take care of and especially those who have mortgage loans need something far more than the basic coverage. Typically, employees with dependents need life insurance that provides seven to ten times more than their annual salary.

2. Coverage isn’t as expensive as you think

If you think that life insurance is way beyond your budget, you are wrong. A survey conducted by LIMRA and Life Happens discovered that the reason why 80 percent of people do not take life insurance is because, they have wrong idea about it. They are not aware of the complete benefits and necessities but rather see the downside and think that insurance plans are three times costlier than what they actually are.

The fact is, life insurance premiums are lower than most other insurance and are even cheaper than our monthly bills for phone, internet, and cable.

If you go with the right life insurance company and choose the right plan, then your monthly premium should be less than $100. In fact, there are coverage plans for a little under $50 per month. The prices will vary based on factors like age, health, and gender.  One of the best ways to find cheaper insurance policies is to compare the best life insurance companies in your area.  There are numerous sites that help you do this.

3. Life insurance is not complicated at all

Since most people in their 20’s are first-time buyers, it’s very common that not many are aware of the details of life insurance. Well, understanding life insurance is not as difficult as you thought it is.

Life insurance can be classified into two types:

  • Term insurance (has a time limit)
  • Permanent (provides life-long coverage)

In case of term insurance, the monthly premiums are a bit inexpensive. Hence, most youngsters choose short-term insurance plans. Think of it like you’re leasing a house for two years. After the said time, you no longer hold ownership to the house. Same is the case with term insurance. Once it expires, you no longer pay for it nor you leverage the benefits.

On the other hand, permanent life insurance is like buying a house and enjoying full ownership to it. You will be entitled to receive your policy coverage benefits for as long as you’re alive.

The best way to determine which insurance is suitable for you is to talk to a professional insurance agent and get the best advice.

4. Waiting time is costlier too

If you put off the idea of buying life insurance in your 20’s until you are 40, then you will have to pay more at a later stage. You get the best and most inexpensive plans when you’re young and healthy. As you get older, your life insurance premiums will also get expensive. That’s like you putting more pressure on yourself.

A 20-year insurance policy with benefits of $250,000 would cost only around $13 a month for someone is his/her 20’s. However, the same policy would cost a 50-year old about $43 dollars a month even if he/she is healthy.

It’s always better to act fast. And that time is now.

5. If you still have that education loan…

Life insurance can come to your rescue when you have existing student loan. In case of an unexpected event, do you want to save your dependents from paying for your student loan? Well, your life insurance could help; however, that depends on your insurance company.

You are entitled to receive compensation if you’ve availed a federal student loan. Some companies will discharge the debt automatically whereas some would hand over the responsibility to a surviving spouse or parent (whoever has co-signed the policy).

Conclusion

Protecting yourself from financial trouble is easier and affordable with adequate life insurance coverage. And the best time to get it is when you’re in your 20’s.

Garrett Parker

Written by Garrett Parker

Garrett by trade is a personal finance freelance writer and journalist. With over 10 years experience he's covered businesses, CEOs, and investments. However he does like to take on other topics involving some of his personal interests like automobiles, future technologies, and anything else that could change the world.

Read more posts by Garrett Parker

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