As a young adult, getting life insurance may not be at the top of your priority list. After all, you’re more likely to be healthy, not married, and don’t yet have children who depend on you. And with an entry-level job, you could be on a tight budget. Why pay unnecessary life insurance premiums at this point in your life?
Investing in life insurance in your 20s or 30s can be a savvy financial move. Here are a few reasons you should consider buying life insurance young.
1. Lock-in great rates
When you buy life insurance, your premiums remain the same for the duration of your policy, unless you change the amount of coverage. Buying Life insurance at a younger age locks in lower premiums and reduces the total amount you’ll spend on life insurance over the course of your lifetime. You simply can’t beat the life insurance rates you receive in your 20s and 30s.
Along with your age, your health is another determining factor in how much you pay for life insurance. Getting insured before any health conditions develop, such as high cholesterol or high blood pressure, lets you lock-in very affordable premiums for decades to come.
2. Protect your loved ones
You may have student loans, credit card debt or financing for a new car – and perhaps you’re considering buying your first place. If you were to die, life insurance can protect your parents or loan co-signers from the burden of paying off your debts.
If you’re in a relationship and have a mortgage, life insurance can protect the surviving partner from having to cover the remaining amount themselves, or losing the home entirely. Many young couples on a tight budget prefer a term life policy as an affordable way to get coverage for a set length of time – such as the length of your mortgage.
3. Build credit
If you opt for a permanent policy, you’re also building credit you can bank on. As the cash value of your policy grows, you’ll be able to borrow against it. The younger you buy a policy, the more time your policy will have to grow in value.
4. Put protection in place for the future
You may not have dependents now, but that could change in a few years. Investing now means you’ll have protection in place when your children, spouse or aging parents rely on your income. If you wait, it may be more difficult and expensive to get coverage.
5. Take advantage of discounts
If you have other insurance policies with The Co-operators, such as Auto or Home insurance, adding Life insurance can increase the discount you get on those policies, saving you money on your other insurance costs.