In your 20s, your biggest focus probably revolves around making the right moves in your career. You are also likely to think of settling down and getting a place of your own. In the midst of all these exciting life developments, it is important to figure in a crucial component – your life insurance plan.
You might wonder why life insurance is so essential right at the start of your career. Health is on your side, your career is going swell, and things are looking up. What could possibly go wrong?
Yet, life is known for throwing curve balls our way when we least expect them. This is where a life insurance plan can come in handy to protect you. A life insurance plan provides financial coverage to a person’s loved ones in the event that the policyholder suddenly passes on, suffers from total/permanent disability or gets diagnosed as terminally ill.
So, it makes sense to have this kind of cover at hand for when things go awry. Many people believe life insurance is for older people only, seeming as there are so many policies targeted towards older demographics – you can click here for an example. However, life insurance can be taken out at almost any age. In fact, insurance experts recommend that the best time to invest in life insurance is in your 20s. Here are 4 reasons why they think so.
1. Your premiums will cost less
The cost of your life insurance premium is likely to increase as you grow older. This is because age is often accompanied by health conditions. So, if you purchase life insurance in your 20s, it is definitely going to cost you less as compared to taking out coverage when in your 40s. Therefore, to save money on your policy, invest early.
2. Your parents stand protected from your debt
In your 20s, your biggest financial responsibility is probably your student loan. Now, while your monthly income helps pay this debt off comfortably, it is important that you plan ahead till the end of the loan term. In the unfortunate event that you fall ill or pass on, the heavy weight of your student loan will fall on your senior parents. In such a case scenario, your life insurance policy will step up and prove extremely handy in paying off these debts so your loved ones do not lose their savings.
3. Your savings will start to grow
If you purchase a participating whole of life insurance plan, you can enjoy a bigger payout through the non-guaranteed portion. This non-guaranteed portion of the payout is akin to a bonus that the claimant gets over and above the policy amount. This feature makes life insurance a pretty safe and reliable form of investment when you are young – you are not just insuring yourself but also saving a bit extra (risk-free) in the process.
4. You will enjoy better coverage
Life insurance policies often have certain exclusions for pre-existing health issues. This means that if you have a health condition right now and purchase insurance much later, that particular health condition may not receive coverage. When you are in your 20s, chances are high that your health is at its prime. So, it makes sense to purchase insurance now when you are fit as you are likely to enjoy the real benefits of complete coverage.
A life insurance plan is one of the most important financial products you will invest in. Therefore, you need to think carefully and make a good choice. Speak to an insurance provider to understand the different types of life insurance options such as term life insurance and whole life insurance. Compare the different plans available and take a well-considered decision by opting for the policy that will suit your needs the best.