Buying Life Insurance as A Young Professional
Purchasing insurance in your single, young adult years can seem purposeless. Consider another perspective. Life insurance can be viewed as a strategy and a wise decision in your young professional years. Common reasons to purchase life insurance include:
- Having dependents who rely on you.
- A large amount of debt.
- Lock in lower premiums.
Lack of Life Insurance in Younger Generations
Only 34% of Generation Z report having life insurance. Over half of millennials have no life insurance at all according to Life Insurance Marketing and Research Association. Why do so many young people not have life insurance? The most common response is that it is simply too expensive or does not make sense if there are no dependents. The cost for life insurance is on average $300 annually, which is roughly $25 a month. This is not overly expensive when considering other subscription services or even gym memberships.
Why Get Life Insurance Now?
Choosing to purchase life insurance as a young professional does have its benefits. The younger and healthier you are, the lower premiums you can secure. These premiums stay low through the remainder of your life.
Purchasing life insurance will also protect the people you do care about if you were to unexpectedly pass. Your family members may receive some benefits for final costs, like covering the cost of the funeral. If you do have dependents, then it also ensures that they will be taken care of if they can’t pay the mortgage on their own or to fund your kid’s education.
Having a life insurance policy can also erase debt from your becoming your dependents burden to carry. You may also be able to grow a cash value in your policy that can be passed down or be accessed in your lifetime.
Employer Provided vs. Individual
Employer provided life insurance is great until you lose your job or decide to leave. Considering an individual policy could be worth it, because you do not have to worry about interim periods where you do not have coverage.
In conclusion, purchasing life insurance as a 20–30-year-old could be beneficial. You can lock in lower premiums and take a burden from your future self.
Matt’s Corner
