If you’re under forty and in good health, you may be wondering whether you need a life insurance policy. In truth, life insurance acts as an important financial safeguard for everyone – not just as a tool meant for older people. Industry data shows that Millennials, in particular, simply aren’t taking out life insurance policies, even though studies show that only about 10 percent of young people have enough savings to cover their debts if they should die unexpectedly. This gap in coverage leaves their families at risk of having to pay off unexpected debts, like student loans or even credit cards.
Many financial experts encourage younger adults to prioritize getting life insurance, even if it’s just enough to cover a year or two of their salaries. Sometimes, life insurance is available through work, though these policies won’t follow you if you change employment, which many young people do every few years. For this reason, it is more advantageous to look into term life insurance, which is a policy that covers you for a certain amount of time.
Below we’ll discuss three things to know about term life insurance.
The (Life Insurance) World is Your Oyster
The first thing to know about term life insurance is that the options are nearly endless, with a policy available to suit every situation. You can choose the level of coverage and the time period, and you can usually choose whether to pay your premiums monthly, quarterly or annually.
It’s Incredibly Cost-Effective
If you’re still paying off student loans or saving for home purchases, like many younger Americans, you might avoid even exploring life insurance options because you think it’s too expensive. However, a moderately healthy person in her twenties can usually get a $100,000 term policy for the monthly price of a few fancy coffees.
Young People Can Benefit Most
If you think about it, young people have the most to gain from life insurance. Term policies usually require a physical in order to set your rate, so young and relatively healthy people can actually get much more bang for their buck than Baby Boomers or Gen Xers. Getting a policy now – as opposed to waiting a decade – can save you substantially.
If you don’t have a policy yet, it’s time to start investigating your options and safeguarding your family’s financial future today.
Image via Unsplash/Austin Distel
