Photograph by Julia M. Cameron
Younger people do not necessarily consider buying life insurance. It’s not something you usually think about when you are in your early 20s and starting a full-time job right out of college. What age should you buy life insurance? Are there benefits to purchasing a policy at a younger age?
Do I buy life insurance in my 20s?
If you are reading this article and are in your 20s, you stand a good chance of purchasing life insurance at a favorable rate. Most insurance companies offer healthy 20-somethings generous rates, some of them exist in the range of $20-$25 per month. Younger people may want to take advantage of their age and buy a term life insurance policy. Term life insurance rates can be locked in place. These policies also are less expensive than other types of life insurance and typically have lower premium payments. Term life insurance lasts for a specific time. It could last 10, 20, 30, or 40 years. If the policyholder does not pass away after the term life insurance expires, the money stays with the insurance company. However, some companies will allow you to convert some or all of your term life insurance into a permanent life policy. By the time you want to convert that policy, you ideally will have been employed for years, bringing in a higher salary and able to afford the higher cost of permanent life insurance premiums.
Buy life insurance at an older age?
Many people decide to buy permanent life insurance in their 30s because it protects their family in case the worst happens to the policyholder. Permanent life insurance has the benefit of a growing cash value that is tax-deferred. The sooner you buy life insurance, the longer your investment will have time to grow.
There are three types of permanent life insurance, and all offer a form of cash value. Whole life insurance contains premiums that never increase. This coverage is lifelong and guarantees death benefits when the purchaser dies. Universal life insurance features more flexibility. The buyer can change the benefit amount and alter payments into the policy as their life changes over time. Similar to whole life insurance, universal guarantees death benefits for beneficiaries. Variable life insurance payments find their way into stock market investments. So the cash value amount is not guaranteed and depends on stock market conditions but might be a less expensive option with lower premiums.
Purchasing a life insurance policy at 30 years old differs significantly from doing the same at 40 years of age. Some individuals in their 40s could be paying a higher premium for a delayed life insurance acquisition, but the purchase remains a practical investment. For those in their 50s and above, premiums will be more expensive. Regardless of your age, you can always call Empower Brokerage at 888-446-9157 to speak with a friendly licensed agent to help you choose the type of life insurance that best suits you.
If you found this article insightful, please read another one of our articles to see why you need prescription drug coverage.
Life Insurance Questions?
We hope that this information on buying life insurance is useful to you.
If you’d like to learn how we can help you plan your retirement, call Empower Brokerage at (888) 539-1633 to speak to one of our Life and Annuity experts or leave a comment down below.
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