Life insurance is rarely a concern to those who are young, healthy, single, and without children, and why would it be? Young, healthy people do not normally spend their time thinking about death, and those who are single and without kids generally do not think about any financial burden on those they would leave behind, since there are no dependents in the picture yet. It sounds like these are all reasons why it would be okay to wait on purchasing life insurance, but really, these are all the reasons that you should purchase life insurance.
The younger you are, the healthier you usually are.
Life insurance is a health-based product, and many of us will develop health conditions as we age. Most life insurance companies will ask you to undergo a medical examination with your application depending on your age and amount of coverage requested. It is important that you are as healthy as possible when you apply, so that you qualify for the best rates. Unfortunately, many people don’t think of life insurance until it becomes abundantly clear that they need it – and that may come later in life after their health has declined. This is also true if you are healthy, but have a family history of a chronic illness; applying when you are young can give you a leg up in getting and maintaining affordable coverage.
Read more about why someone might be denied life insurance coverage.
Life insurance premiums are lower when you are younger.
Life insurance is also an age-based product. Life insurance companies want you to live a long and healthy life, deferring the need to pay out a death benefit. When you are young, your risk of passing on any given day is much lower than when you are elderly. Life insurers assess that risk and offer more affordable coverage options when you are young and more expensive options as you age. Further, most people do not need to buy life insurance when they are elderly. Typically, fewer people will rely on you for financial support and you will likely have paid off many of your long-term obligations like a mortgage or car loan.
Permanent life insurance has more time to accumulate cash value.
Not only are permanent life insurance premium costs lower when started at a young age, but the insured can expect many years of compound growth on the value of the plan. If dividends or interest are reinvested, those additions to cash value have the potential to earn additional dividends or interest over time, amplifying the positive impact of starting coverage when you are young.
You can read more about cash value here.
Young people tend to have more debt.
Having life insurance can protect your loved ones from your debt(s) in the event of your passing. The younger you are, the more likely you are to have some sort of debt, whether it’s student loan debt, credit card debt, or debt related to car payments or a mortgage. While your loved ones could simply sell a car after your death, other types of debt may not be so easy to pay off.
The assets in your estate will be used to settle any outstanding debt after your death, but if your net worth is not enough to pay them off, your spouse may become solely responsible for mortgage or apartment rental payments, your parents (or another cosigner) may have to handle your student loans, and a joint account holder or family member may have to pay off your credit card debt. Ensuring you have enough life insurance – at a minimum – to pay off all your outstanding debt could protect your loved ones from facing these financial burdens alone. If you pass unexpectedly in your 30s or 40s and have no life insurance, these types of costs are likely to negatively impact your family.
Life insurance can provide peace of mind for you and your family.
Getting life insurance while you are young will give you the peace of mind that comes with knowing your loved ones are protected in the event of your death. Whether you choose a term life policy that will protect your family for up to 30 years or a permanent policy that guarantees a payout upon your passing so long as premiums are paid, you can take steps now to protect their futures.
Further benefits of choosing certain types of permanent policies: Obtaining coverage while you are young usually means that your premiums are the lowest they ever will be and, should you need money in the future, Navy Mutual’s Flagship Whole Life allows you to take out a low-interest loan against your policy’s cash value.
Navy Mutual is here to help. To schedule an appointment with a representative to discuss your family’s needs, click here, or email us at counselor@navymutual.org.
The appearance of the U.S. Department of War (DoW) visual information does not imply or constitute DoW endorsement.