I‘m constantly amazed at the fact of how many young people I come across that don’t have any life insurance. While they all have there different reasons, the most common reason I hear is that it’s too early to think about life insurance. I couldn’t disagree more.
Most Important Question:
Are you supporting individuals whose livelihood depends on your income? If the answer is yes, it’s time to look at life insurance.
Now, you may be saying: shouldn’t I wait to get a policy? Why should I pay premiums when I have so many other checks to write? Well, the reluctance is understandable: the perception is that life insurance is for old people, and when you’re 30 or 35, chances are you’ve got a long, great life ahead of you. But in financial terms, here is why this can be advantageous.
Healthy is Good
Typically, Americans shop for a life insurance policy in the middle of their life spans – when they are in their forties or fifties. At that time, they may have already fallen into the grip of bad habits (smoking, obesity, heavy drinking) and diabetes, heart disease, cancer or HIV may have entered their health picture. All these conditions can jack up premiums or make it harder to get a policy.
Term Life Insurance is Cheap
Okay, maybe you won’t have to contend with any of the above health risks at 45 or 50 – but who knows? Buying a term insurance or permanent cash value life policy early in life, before you have to encounter any of these problems, should allow you to pay less expensive premiums. (Presuming you don’t face recurring risks to your health and safety today.) Getting life insurance quotes online are so easy nowadays, with sites like Matrix Direct offering you a free quote in minutes.
Did you know that premiums for standard-risk term life insurance fell 50% between 1994 and 2008?
Premiums have been getting cheaper and cheaper for new term life policyholders, partly because the mortality rate has dropped over the decades. In fact, the non-profit Insurance Information Institute says term insurance premiums have fallen by more than 4% per year since 2000, and the premiums on cash value policies are averaging roughly 5% lower today compared to a decade ago.
Do young singles need life insurance?
Good question. Some financial consultants will tell you there is no pressing reason for it. Yet if you are single, buying a term life insurance policy (or even a permanent life policy) early on could bring you a better deal and potentially guarantee your insurability. I have to admit that I did not do this. But I was fortunate to take out a term life policy early enough that the premiums were still very affordable.
Maybe it’s time. Time passes, things change, and so does your need for insurance. Even if you are insured, it’s important to keep up with change – as an example, the Insurance Information Institute estimates that about a third of families don’t update their life insurance coverage after a new baby comes home. I’m an exception to this stat. Not only did I increase my insurance after having our first child, but I’m now increasing it again with the soon arrival of our second. I increased the amount dramatically so that I won’t have to worry about increasing premiums if we have another child.
If you’re young and you haven’t yet talked to a qualified insurance advisor, think about doing so today – you may be pleasantly surprised how affordable life insurance can be.