The younger you are, the cheaper a person can get life insurance and keep it at a lower cost until they get older or medical problems arise.
After a person’s death, life insurance provides financial security for a reasonable monthly fee, so loved ones receive a lump sum of money in your absence.
However, many millions of young Americans do not have the adequate amount of life insurance. According to LIMRA, a marketing company specializing in the field of insurance, “nearly half, 47% of millennials, which is equivalent to 34 million adults, say they need life insurance or need to increase it.”
That’s a gap that can hopefully be closed with more awareness and information because while life insurance is good for policyholders of all ages, there are some particular benefits young adults should take advantage of.
But why should young people take out life insurance? LIMRA points to three reasons why paying one could give a short-term and long-term financial advantage.
1. The younger, the less cost
The younger a person will pay much less than what is charged to an older person. Healthy young adults can often get a term life insurance policy for less than $50 a month.
If a young person takes out life insurance, the price will only increase until a person is old. However, it will get more expensive as you get older, so if you want affordable life insurance, it’s best to start paying for it sooner.
2. Good health, lower rate
Younger people, in general, have fewer health problems than older adults. This is another reason why young adults should get a policy now.
If they wait, and health problems arise with age, they will be forced to pay more for coverage. Therefore, it is advisable to have a medical examination and prove your health status now. And if any health issues arise in the future, you will be awarded the lowest rate.
3. I would pay your debts
If you are a millennial without any debt, then you should congratulate yourself because you are part of a minority.
“Nearly three-quarters of millennials in the US, or 72%, have some form of non-mortgage debt, and the average millennial owes $117,000,” according to a recent study by Real Estate Witch.
How will those debts be paid if you die prematurely? With life insurance they could be liquidated instantly.