- Even in your 20s, the optimum time to get life insurance is while you’re young and healthy.
- Life insurance is a must if you have dependents such as a spouse, children, or aged parents.
- The cost of life insurance is likely to be higher for individuals in high-risk occupations or with risky pastimes. Still, the potential losses are enough of a justification to get coverage.
- Comparison shopping for life insurance products on Policygenius may save you time and money.
As we become older, our health deteriorates, making it a good idea to get life insurance in our early twenties. The more time you put off purchasing insurance, the more money you’ll pay. You may get money for life insurance from Payday Champion.
Term life insurance for nonsmokers in their 20s and 30s may cost anywhere from $10 to $50 a month, depending on the level of protection desired. Your family will be financially secure in your absence if you pay less than the price of a gym membership.
As you get older, your life insurance requirements alter, and you’ll have to consider things like having children, getting married, getting divorced, retiring, and taking care of aged parents.
There are seven reasons why you should get life insurance if you don’t already have it.
1. You’re expecting a kid or have children of your own.
“You need life insurance if you don’t make it home and someone is depending on your salary to survive,” Brokers International CEO Mark Williams told Insider.
Life insurance is often purchased after the birth of a child. Most individuals get life insurance to ensure that their families will be financially secure after they pass away. You should obtain life insurance if you’re expecting a child within the following year.
Pregnant women who are the family breadwinner may still get life insurance. Still, policy expert Logan Sachon of Policygenius says they will likely obtain better rates if they have the medical check before or after pregnancy.
2. You’ve decided to tie the knot.
Before you walk down the aisle, there are a few things to think about. For example, do you want to insure yourself alone or jointly?
Joint life insurance plans are specifically designed for married couples. According to Mark Williams, CEO of Brokers International, a common life insurance policy is advantageous for wealthy couples looking to reduce the effect of inheritance and estate taxes on their dependents.
Both spouses should talk about how to preserve the assets and inheritance of the children if one or both of them had children from a prior relationship. A trust should be formed if a kid intends to benefit from life insurance policies since a minor cannot access the money.
3. You provide financial assistance to your elderly parents.
Your parents should have previously acquired life insurance as part of their retirement preparation in most cases. There are an estimated 6.24 million people under the age of 35 who are caring for an elderly family member, according to a survey by the AARP Public Policy Institute in 2018.
Life insurance with a long-term care rider may help you pay for the expenses of caring for your aging parents, whether they are at home, in an assisted living facility, or a nursing home.
4. You owe money on your private student loans.
If you took out private student loans with your parents as co-signers, having life insurance will ensure that they are not saddled with the burden if you pass away. Even if your parents were not co-signers, having debt in your inheritance might be devastating, particularly if you’re married.
The borrower’s federal student debts are forgiven if they pass away. Private student debts are included in your inheritance if you die.
5. You run your own company or are part of a family-owned enterprise.
When a family member is critical to the firm, Silvia Tergas, a Prudential financial adviser, says their incapacity or death might cause income streams to go south.
To keep the company going in the event of a death or disability, she suggests purchasing life and disability insurance for the company itself.
When applying for business loans, most lenders need life insurance like decreasing term insurance, in which the bank serves as the beneficiary to pay off a debt if its owner dies. Paying down private school loans with life insurance is a similar concept.
6. It’s a high-risk job for you.
In the end, Silvia Tergas, a Prudential financial adviser, says, “life insurance is risk management” to cope with “premature death, loss of income due to sickness or incapacity.”
If you work in a risky or high-risk situation, you are more likely to die than someone who works in an office all day. Many jobs, such as those in the aviation or construction industries, firefighting or mining, or oil and natural gas industries, have a more significant premium.
Any group life insurance supplied by your company ceases to exist the moment you quit your position (whether by resignation, retirement, or termination). Group life insurance may sometimes be insufficient in terms of protection. Typically, you should pick a death benefit of 10 times your yearly salary.
Working in a dangerous job raises your chance of being disabled. Disability insurance acts as a safety net if you cannot work due to an injury or illness. Long-term disability insurance is something that most individuals do not have, even though they are likely covered for short-term disability by their work.
7. You’re a little out there when it comes to your interests.
Life insurers may see you as a higher-risk customer if you are a thrill-seeker who enjoys participating in dangerous activities. In other words, it’s like having a high-risk job—you’ll pay more for insurance, but it’s worth it because of the high probability that you’ll die from an unnatural cause.
Avoid lying on your life insurance application if you’re involved in an extreme pastime such as rock climbing or scuba diving. Insurance companies may reduce or eliminate your death benefit if you die during the first two years of having a policy and do not reveal any frequent high-risk activities.
A higher base premium and an additional yearly charge defined by the percentage of your coverage amount are common ways to pay for extra coverage. If you have a hobby, it’s a good idea to shop around for insurance since each company analyzes the risk differently.
A financial adviser, accountant, and estates attorney can help you get the most out of life insurance by ensuring that you have enough coverage that can be adjusted as your life evolves.