As a twenty-something, you probably haven't given much thought to having a life insurance policy. After all, it doesn't seem like something you'll need until you reach your thirties. But buying life insurance while you're still young and healthy has plenty of advantages, as explained below.
Buying Now Means Lower Rates
Age and health are two factors that seem to go hand-in-hand when it comes to determining one's life insurance risk. The younger you are, the more likely you are to be in good health. Backing up this assumption is the fact that most diseases and chronic health conditions, including high blood pressure and cholesterol, tend to appear once you hit your thirties. Young adults are also more likely to lead a healthy, active lifestyle and experience less stress than their older counterparts.
As a result, taking out a life insurance policy in your early twenties can be significantly cheaper than waiting until your thirties or longer. In most cases, you'll be able to lock in your monthly life insurance costs, making it an affordable long-term expense that offers excellent benefits in later years.
The Sooner You Build Cash Value, the Better
Buying a permanent life insurance policy while you're young may seem like throwing away money, but it can be one of the smartest investments you could make. Permanent life insurance policies accrue cash value as you pay towards your premiums throughout your life. This cash value will continue to grow as long as the policy remains effective.
This gives you plenty of options when you're older. For instance, you can borrow against the cash value of your policy to take care of emergency expenses. If you decide to cancel your policy later on, you'll be entitled to receive the cash value that has accrued since the start of your policy. Of course, your named beneficiaries will be able to benefit from your policy if something happens to you.
Anything Could Happen
With your entire life seemingly ahead of you, it's hard to see how you could have any use for life insurance. But there aren't any guarantees in life - the unexpected could happen at any given moment, meaning that you could end up leaving behind an incredible burden on your family and loved ones. Should anything happen to you, your life insurance policy will keep those closest to you from struggling with any debts left behind.
As a young adult, investing in life insurance should be one of your financial priorities. Not only will it be cheaper to buy right now, but you'll also benefit from this long-term investment when you're older and have a family to take care of.