Life Insurance in Your 20s
For most people in their 20s, life insurance is off the radar. Finding meaningful employment, paying off student loans and getting a decent place to live tend to be more important. Yet, based on several factors, now is the right time to think about a policy. Whether you purchase individual life insurance or group coverage through your workplace, rates tend to be lower at this point in your life. Consider the following factors before selecting the coverage that’s right for you.
Emergencies and Financial Obligations
What would happen if you were out of work or suddenly passed away? Life insurance can assist with:
- Covering your debts, including student loans or a mortgage, instead of passing this burden onto your family members.
- Extra financial support for certain medical problems, including cancer or paralysis.
- Financial assistance for your family, should you pass away unexpectedly.
- Financial assistance related to taxes and other issues within your estate.
Locking in Lower Rates
The younger and healthier you are, the lower the life insurance rates you can secure. Your 20s is the optimal period to start coverage for the following reasons:
- You’re less likely to have or develop health problems.
- Your life expectancy decreases the older you get.
- You’re less likely to use your coverage at this point. As a result, you can get a lower rate and your policy accumulates greater cash value in the meantime. Long term, this means a greater payout when you’re older for a smaller premium now.
End of Life Planning
Unfortunately, part of long-term planning involves factoring in your funeral and how your family will pay for this expense. You will need to think about:
- Your income and any assets.
- Whether you currently have group life insurance through your work.
- How many children you have, if any.
- Your debts, including any loans and mortgages.
- Basic funeral costs.
- Other expenses involved in your estate.
It’s recommended you plan at least $15,000 for this event and consider the resources your family would have to complete the process.
In all cases, expect to name a beneficiary on your policy. However, you cannot list children as beneficiaries unless they’re currently over the age of 18. For minors, set up a trust or assign a custodian to temporarily manage the funds, as insurance companies do not make direct payouts to children.
As the first step, work with an agent at Ion Insurance to discuss what policies may be right for your future. To begin, give us a call at 203.439.2815.
