Young adults in their 20s and 30s should have life insurance policies. Sound crazy? Younger policyholders gain some awesome benefits when investing in life insurance!
Investment Obstacles for Young Adults
There are several obstacles young adults face when considering life insurance.
One of the largest obstacles facing young investors is student loan debt. According to the New York Federal Reserve, 70 percent of current college seniors will graduate with student loan debt totaling approximately $30,000 per borrower. Researchers from the New York Federal Reserve claim that “Student loan debt is the only form of consumer debt that has grown since the peak of consumer debt in 2008. Balances of student loans have eclipsed both auto loans and credit cards, making student loan debt the largest form of consumer debt outside of mortgages.”
Another obstacle keeping young adults from investing in life insurance is the idea that they have no one who would benefit from life insurance if they are single and have no children. In 2019, the average individual got married between ages 25 and 30, significantly later in life than in generations past. In 2018, the average age of first-time parents was 26 for mothers and 31 for fathers, up from 21 and 27 in 1972. With Americans getting married and having children later in life, it makes sense why they think they have no beneficiaries in their 20s and early 30s.
Benefits of Investing Young
Young adulthood is often the peak of an individual’s health. With no pre-existing conditions or medical factors that could increase monthly premium rates, young adults can lock-in low rates that will help them pay less over the life of the policy. Policyholders may also get discounts on other insurance services if they take out multiple policies with the same company, such as life and health insurance.
If an individual has student loan debt, a mortgage, new car financing, or credit card debt, those costs may become the responsibility of their loved ones if they died. While federal loans include death discharges that null the loans after the borrower’s passing, most private loans don’t. Life insurance provides coverage for these costs, so a policyholder’s family never has to worry about inherited debts.
Permanent policies, or policies with no set end-date, may provide living benefits or special riders that you can borrow against as the policy’s cash value grows. Buying a life insurance policy as a young adult increases the amount of time your policy accrues cash value, giving you more money to borrow from later to pay for a child’s education or to replace your income during retirement. These cash values also help policyholders build credit that can help them take out loans or get a mortgage.
Start Protecting your Future
The first step in getting life insurance is to get educated. Young adults should research what types of policies would be best for their lifestyles and what companies could offer them the lowest rates. Insurance brokers, like those with Empower, are trained to help individuals, couples, and families find the policy they need at a price they can afford.
Life policies are shockingly affordable. Most young adults see life insurance as a luxury expense or an unnecessary bill, when, a small premium each month could protect the policyholder and their loved ones for years to come. With living benefits and locked-in low rates, young adults should reach out to an agent today to start the process of protecting their futures.
Got Life Insurance Questions?
We hope this information on buying life insurance as a young adult is helpful. If you’d like to learn more about life insurance policies and carriers, please give us a call at (888) 539-1633.
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