No one likes to face the fact that they’re going to die one day. But when that inevitable day comes, it’s better to be prepared with a life insurance policy that will provide financial support for your family and cover your debts and burial costs, especially if you die prematurely or unexpectedly. That’s why there are a lot of advantages to buying life insurance young.
But when is the best time to purchase life insurance? While many people believe they needn’t bother with getting life insurance until they get married, buy a house, or have children, there are actually benefits to starting a policy when you’re young, even it’s before you’ve experienced any of these life-altering events.
Buying life insurance young, while you’re in your 20s or early 30s, can save you thousands of dollars in the long-run. “With very few exceptions, the younger you are when you buy a life insurance policy, the less you’ll pay,” writes Kevin Mercadante in an article for Money Under 30.
Policy premiums are typically much less expensive for younger people, who have a lower risk of death at the time of application than older policyholders. “Premiums rise with age since the company has to adjust for the higher risk of death that increased age brings,” according to Mercadante.
Age isn’t the only factor taken into account when an insurance company calculates an applicant’s risk—the applicant’s health also plays a large role. Considering most diseases develop later in life, young people in good health usually have a lower risk of dying and therefore also lower premiums than older people or those who have been diagnosed with a chronic illness.
If you’re young and healthy, take advantage of lower life insurance premiums while you can. “For most people, the ideal time to buy life insurance is when you’re in your twenties,” Mercadante writes. “Though that may seem young, chronic conditions like high blood pressure and cholesterol often begin to show up after age 30.”
Maximizing Your Savings
You probably never guessed it, but a life insurance policy can help you maximize your savings in addition to covering you financially in case of your untimely demise. “If you always have a reason to dig into your savings, consider a permanent life insurance policy that has a death benefit and a savings component as well,” advises Liran Hirschkorn in an article for Life Happens, a nonprofit organization dedicated to helping Americans take personal financial responsibility through ownership of life insurance and related products. “You can borrow against it as well as use it in retirement, depending on the policy and the company behind it.”
As part of our Whole Life and Universal Life insurance policies, for example, policyholders have access to their policy’s cash value through policy loans and withdrawals.
Covering Your Debts and Burial Expenses
Even if you don’t yet have any dependents, such as a spouse or children, to worry about supporting after you die, you should consider making sure your debts and funeral expenses are covered. Say your parents co-signed a car loan for you—do you want them to be stuck with your debt if something happens to you? In this case, a life insurance policy that pays your unpaid bills after your death can be an enormous relief for your loved ones.
Make sure your life insurance policy covers your burial expenses, too. Considering the average funeral costs between $10,000 and $15,000, according to Life Happens, a policy that covers that cost can take a huge financial burden off your family’s shoulders.
We know thinking about the end of your life story isn’t fun, but there’s no point in denying the inevitable. Buy life insurance when you’re young—not only will you save money in the long-run, but you can rest assured that your loved ones won’t face any financial burdens when you die.
Buying life insurance young has a ton of advantages. Call Smallwood and Small today at 304-263-3361 to learn about our life insurance coverage options, or visit our Life & Disability Insurance page for a quick quote.