Financial Planning Tips: Why You Should Invest in Life Insurance Younger
April 19, 2023
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It’s never too late to get started with financial planning, but really the best time to begin doing so is as soon as you start to begin earning an income. Once you’re an adult out on your own in your first “grownup” job, it’s a good idea to start understanding your finances on a deeper level and start making the bigger decisions about where that money will end up going and how to invest it in a way that supports your goals for the future.
Life insurance is one of those aspects of financial planning that too many of us put off for as long as we can. Life insurance, by nature, is a financial “plan” that pays out in the event of your passing. Younger people hesitate on it because they often bet on themselves being young and healthy for a long time – and in our 20s, and sometimes 30s, we don’t yet have any dependents to even leave a life insurance death benefit to. But there’s actually a lot of reasons why it’s a good idea to invest in life insurance when you’re younger.
In this article, we examine some of those benefits and look into situations where purchasing life insurance sooner than later might be worth the investment.
Purchasing life insurance younger locks in cheaper rates.
When you purchase life insurance younger, you can lock in cheaper rates. By investing earlier than later, you secure more cost-effective life insurance and can save thousands throughout the duration of your policy (or lifetime – depending on the route you choose!) This is especially important if your health situation ends up ever changing, or if you develop a medical condition early that would otherwise make it difficult to obtain affordable life insurance – or insurance at all – later in life! Plus, with life insurance being so flexible, you can convert a term policy to a permanent policy later in life, or change your beneficiaries if you get a significant other/have kids.
You can combine life insurance with critical illness insurance.
Purchasing life insurance and critical illness insurance young can save you significantly on both policies, locking in younger rates. Since most claims for critical illness tend to happen around the age of 50, you can save a ton by having it far earlier. $100,000 in coverage purchased for a ten-year term in your twenties is about $25 a month, and enhancing that ten-year term to twenty years will only cost you about $30 a month. Essentially, you can have critical illness insurance and life insurance locked in until age 65 for just $50 a month.
It can make decisions later on in life much easier.
Purchasing life insurance younger can mean one larger decision already made, and therefore one more thing to tick off the list. A great reason for purchasing life insurance younger is that your risk is significantly reduced. Younger people are healthier and they generally cannot afford to go back country skiing or own their own off-road vehicle yet to take out for joy rides. These hobbies and purchases can actually hike your insurance rates as you get older, since they’re high-risk activities and you’re likelier to get injured or even killed doing them. Some people may even have exclusions in their policies for their hobby or risky activity, and so death as a result of those activities would not be covered.
Financial planning is a nuisance for some, but it’s easier to get it done sooner than later. Life insurance may be one of those big financial plan-type decisions, and purchasing it younger means you don’t have to go through the process of it later.
Opting into medical exams younger can reduce your rates.
Some life insurance companies offer coverage without the need to take on a medical exam. If you’re young and healthy, it’s best to not opt out. Policies issued without the need for a medical exam tend to cost more than those that require a medical exam. Especially when you’re younger, taking this medical exam and ruling out any medical conditions can sincerely help to keep your rates manageable.
No one regrets buying life insurance at a young age. They only regret buying it too late.
It’s a hard, sad truth, but a truth nonetheless. Buying life insurance young is no skin off your teeth, as it costs you very little and, frankly, it’s an expense you can just very easily forget about (although we hope you don’t forget to make payments!) It’s the equivalency of going out to see a movie once or twice a month and even though funds are often tight when we’re young, it’s still within most of the population’s reach – and plus it saves you money as the years go by.
Most people don’t regret purchasing life insurance young, but there’s thousands of people out there who regret not purchasing it younger and are now struggling to find life insurance they qualify for due to a new occupation, a medical issue, or advancement in age.
Talk to Excalibur for more advantages for purchasing life insurance young, or how to go about securing a life insurance policy suited to your needs right now.
