What twenty-year-old is thinking about life insurance policies, right? As it turns out, they should be. College, starting a career, and the latest pop-culture hits might be at the forefront of your mind, but there are major benefits to picking up a life insurance policy now as opposed to later.
Most people think they don’t need one since they aren’t married and don’t have kids. Others see the price of a monthly premium and wonder why they should take on that cost. However, picking up a policy you can afford is a financially savvy move. Here are the reasons why.
1. You’re Getting Better Rates
Unless you change the amount of coverage down the road, whatever premium you’re paying is locked in for the duration of your policy. Age and health are two of the largest contributing factors to the cost of a premium, and you’re likely to have the best of both insurance-wise while you’re in your 20s.
If you picked up a whole life insurance policy, for instance, you’re locked in at a low rate. That rate doesn’t change if you develop a health condition like high cholesterol or blood pressure in your 40s. That means you can afford exceptional coverage now whether you could in another 20 years or not.
2. Handling Debt
Most people in their 20s have more debt than they realize. Student loans, financing for their vehicle, a mortgage, and credit card debt add up faster than you might think. In the event of your untimely death, where do those debts go?
If you’re in a relationship, they can head directly your partner. If you do have children, they might head there. In other cases, your family could be left with a hefty bill. Regardless of where the debt goes, a life insurance policy ensures those debts are paid for.
3. Boost Your Credit Score
Permanent policies come with the additional benefit building credit. These forms of insurance grow their cash value and allow you to borrow against it, boosting your credit immensely and eventually helping you afford better loans for cars, a house, and more.
4. The Cash Value
All permanent life insurance options, those that stick with you for life, grow their cash value over time. The younger you pick one up, the more time that cash has to increase in value. While retirement might be the last thing on your mind, making a small investment now will pay off big time in the future. Unlike stocks or cryptocurrency, you don’t have to worry devaluation.
5. The Discounts
You probably have other insurance policies like auto or home. When you add a life insurance policy, you can usually increase the discounts you get on other forms. That means you’re saving money and reinvesting it all at once. Consider it the smartest entrepreneurial move you can make in your 20s.
Getting More Information
So, who needs life insurance in their 20s? Well, the financially savvy who are planning a future do. Yeah, that can be a little on the boring side as you’re finally starting to live your own life, but why not set yourself up for success in the process?