Even at a young age, life insurance is important. Although people tend to instinctively think of it in terms of protecting “stuff,” life insurance is about more than protecting possessions. A life insurance policy can help protect your loved ones from unexpected expenses.
Do I Need Life Insurance if No One Is Dependent on Me?
When you’re young, it may seem like no one is counting on you financially. However, many young adults have considerable debt in the form of college loans.
It’s common for parents to have co-signed college loans, and in some cases — for example, with private student loans — co-signers can be responsible for that debt if something happens to you. Life insurance benefits can help family to cover this debt if you were to pass away.
Life insurance can replace income for your family or spouse. If you are married, you need to consider that your spouse probably has college loans, too. Would they be able to pay for your loans into addition to their own without your income?
I’m Young and Healthy. Why Would I Need Life Insurance Now?
Life insurance is never going to be more affordable than it is when you’re young and healthy.
Premiums are driven by your age and health, and getting it now means locking in those lower rates and potentially guaranteeing your future insurability. You will also already be insured if you get sick down the road, which can be very important as certain conditions may mean you cannot get life insurance or that the costs could be prohibitive.
Is Life Insurance Expensive?
Younger customers tend to purchase term policies, as they are typically more affordable. When choosing term life insurance, it’s recommended that you keep future plans in mind (such as getting married, buying a home or having children) and get a policy with a longer term. Look back five years and see how much your life has changed. Imagine what will change in the next five to 10 years, and ask yourself if that will change your need for insurance.
Planning for the future now can help you avoid the need for another policy if your needs change (which could mean higher premiums due to age or health at that time). You may also want to select a policy that can be converted to a permanent policy later.
A permanent policy can be a good choice for several reasons. It stays with you for life (assuming you stay up to date on premiums) and can be a way to start saving money, as many permanent policies can build cash value. This money is yours and, once accumulated, can be used as a source of emergency funding. A permanent insurance policy can be a very stable piece of your financial plan.
Planning early can be smart in the long run. Not only are you helping to protect your loved ones — parents, siblings or a spouse — from potentially burdensome expenses, but you may benefit from lower rates and starting a financial plan at a young age. You take life insurance out for yourself and for your loved ones. You take it out to do the responsible thing for later in life.
To learn more about why life insurance might be a good idea for you, contact a Colonial agent today.
All insurance products are subject to terms, conditions and exclusions not described here; we can answer any questions you may have.