When it comes to taking out a life insurance policy, it’s essential that you start looking early. Although your 20s are a time for fun and amazing life experiences, no one wants to financially burden their family in the event of their sudden and unexpected death. Death can come for anyone, and at any time. Even if you’re a healthy, fit and cautious individual, no one can see into the future, and that’s why life insurance cover is very important.
In today’s society, life insurance is becoming more of a way of life, instead of an optional extra. As a young adult, you will be able to benefit from low premiums, as your chances of dying are low compared to a person in their 50s or 60s. Furthermore, once a premium price has been agreed by you and your insurer, and you sign on the dotted line, that’s the premium price you’ll pay for the duration of your contract. If you’re fit, and don’t take on any crazy activities like skydiving, then your premiums can be even cheaper!
Term Life Insurance
This type of life insurance is one of the most popular policies to take out for people in their 20s. ‘Term’, means the policy will be guaranteed for a specific amount of time, and you have the ability to determine this period – although most policies offer 10, 20 or 30 year instalments. These types of policies also allow you to select the amount you want to be covered by.
Bear in mind however, that the bigger the amount, the higher the premiums. If you die within the designated length of your contract, then your beneficiaries will receive the lump sum that you agreed with the insurers.
One thing to remember, is that you should only get life insurance for the amount you think your family will need upon your death, and maybe a little extra. Not only will this keep your premiums at a low, but it will leave you with more money to invest in other saving opportunities to pass on if you suddenly die.
So, Why Do I Need Life Insurance?
If you’ve got any substantial debt whatsoever, then taking out a life insurance policy is recommended. From university loans to car finance, and even credit card debts, your family may have to take on your debt if you don’t financially protect yourself when you die. If you plan to buy a home in the next few years, then many banks and mortgage lenders will require you to have life insurance in place, in case you die and are unable to pay off your mortgage.
Preparing For The Future
If you have children, or you want to have them in the future, then life insurance is also essential. If you’re the main breadwinner in the family, then you will certainly want to leave your children something if you die unexpectedly. The policy money could be used to send them to university, or help your partner to pay for their first car.