Should I Get Life Insurance In My 20s?
The 20s can be the best years of your life, with many exciting things happening on a seemingly daily basis. The last thing on your mind is probably life insurance, but giving it its due thought can turn out to be a smart financial move that will set you up for a far easier future.
Taking out a life insurance policy in your 20s is a commitment, and this in itself can help you transition into a world of responsibilities. If you’re looking to start a family, buy your own house, or open your very own business, life insurance can be of tremendously great help.
There are many other things to consider, which is exactly what we will be covering throughout this article, including 6 good reasons why you should take out a policy in your 20s.
Do I Need Life Insurance In My 20s?
We often tend to take a lot of things for granted. We do it whether we’re in our 20s, 30s, 50s, and even beyond. We can focus on other tasks that seem more pressing (than getting life insurance, for example), which is all well and good – until the unexpected happens, and we find ourselves with our back against the wall.
Taking things for granted can be ok, as long as they are taken care of. This is what life insurance is all about. It’s an insurance policy that covers several things, putting our minds at rest that if the worst were to happen, we have coverage.
It is also a smart financial move that can help those in their 20s save big bucks in the future – money which could be put to better use.
6 Reasons To Get Life Insurance In Your 20s
There are many good reasons why you should get life insurance in your 20s. You might have your personal reasons for why you want to take out a life insurance policy in your 20’s.
If you can’t think of any, here are 6 perfectly good reasons why it makes a lot of sense to take out a life insurance policy in your 20s.
1. Save Money In The Long Run
When you are young and healthy, life insurance premiums are going to be cheap (more on this in the next section). By locking in lower rates, you can be sure that you will have more financial resources when you need them. If you’re dreaming of someday owning your own property, or perhaps opening your own business, the money you save can go a long way in helping you achieve those dreams.
2. You Have Debts
You might not have too many debts in your 20s, but private student loans and any other loans you might have taken can leave a financial strain on your loved ones should something happen. The same goes for any credit card debts or financial expenses that would still need to be taken care of.
3. You Want To Start A Family
Many people start their families in their 20s. Families are all about love and protection, and a life insurance policy can offer protection to your spouse should the unfortunate happen. Taking steps to ensure their financial well-being at such a difficult time can help them continue on. This is especially true if you’re planning on having on kids.
4. You Want To Keep Your Options Open
There is no telling where life will take you. You might decide to open your own business, or perhaps take a sabbatical somewhere far away. Life is full of choices, and setting yourself up so that you can take advantage of the opportunities that come knocking is one of the secrets of success. A life insurance policy can offer you the protection you need to go for whatever it is that you want.
5. You Want To Build a Portfolio
Financial health is perhaps one of the most important things you will need to build throughout your life. Life insurance policies, when bought at an early age, can grow into a nice cash asset. Over time, you might even be able to take a loan against your policy or divert the accumulates funds into other investments should you come across the right opportunity for you.
6. You Want To Cover Your Bases
Different life insurance policies can offer you coverage for different things. The available options can be used to make sure you take out a policy that covers what you need it to cover with optional riders offering extra protection should you require it. The important thing here is to understand your financial situation and see how a life insurance policy can make it better.
How Much Does Life Insurance For a 20-year-old Cost?
Getting life insurance as a young adult might be cheaper than you think. Of course, there are many things to consider, which can affect the cost of your life insurance premium. If you’re looking at getting the best bang for your buck (and let’s face it, who isn’t?) the most important thing to do is to get quotes from different providers and then compare.
It is very important to not only compare the price but also what is being offered. After all, it’s easy to be offered a lower price for a policy that does not cover as much as the net one. You might also want to consider using an independent insurance agent to help you navigate your options.
Let’s have a look at some typical average rates you can expect to pay when taking out a life insurance policy in your 20s.
Life Insurance Rates for Men in their 20s
21 Years Old
25 Years Old
29 Years Old
Life Insurance Rates for Women in their 20s
21 Years Old
25 Years Old
29 Years Old
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Should I Get Whole or Term Life Insurance?
Both whole life insurance and term life insurance serve a unique purpose. If you’re unsure which one you should get, understanding your requirements and circumstances is the first step.
Term Life Insurance
A Term Life Insurance policy will typically be cheaper and cover you for a set period of time. Typically, this can be as long as 30 years, which in most cases, will cover the most financially strenuous period of your life. You might not find many extras in a Term Life Insurance policy, but the price is a factor to consider.
- Cheaper premiums
- Fixed-term and benefit
- Limited options
Whole Life Insurance
A Whole Life Insurance lasts your entire lifetime and will cost more than a Term Life Insurance policy. Here, you will also have the option to accumulate cash value, which can be a great thing to start as a 20-year-old. In Cash Value policies, a part of your premium is set aside where it accumulates interest. This is also referred to as a living benefit, and it’s something you can access to pay for expenses.
- Higher premiums
- Lifelong coverage
- Many additional options
Both Terms and Whole life have their pros and cons. In most cases, one will prove to be a better fit for your circumstances than the other. The tricky bit will be balancing your immediate concerns with your future plans and how much you are willing to give up now so that you can enjoy it more in the future.
What Is The Best Age For Life Insurance?
The short answer to this question is a simple one – the earliest possible. There are many reasons why this is the case. If you have debt, whether its a student loan, a mortgage or anything else, being covered is going to help you feel more at ease. The earlier you get life insurance, the cheaper it is going to be, which will save you a lot of money when you need it the most.
When you’re in your 20s, you are at the age where you start figuring out what you want to do with your life and start taking the necessary steps to get to where you want to be. This makes it not only exciting but also very stressful. Getting life insurance at this time can alleviate some of that pressure, allowing you to focus on what you want to do.
Investing in Life Insurance In Your 20s Is a Smart Financial Move
Life is fun, but sometimes it is also going to be tough. Unexpected things happen when you least expect them, and this is why we should do our best to take care of the things we can early on. Life insurance is one of those things that can help the ones we love when we need it the most.
The right policy can also provide you with coverage should you need it in the future. Taking out a policy in your 20s will not only save you money down the line, but it can also provide you with additional benefits such as cash value.
The 20s can be some of your most formative years, and by having a life insurance policy, you can have peace of mind to chase your dreams freely.