Why Buy Life Insurance?
As a millennial, life insurance is likely not high on a list of financial priorities. With rent, student loan payments, and other essentials, life insurance premiums can seem like an unnecessary expense. When you’re young and healthy (read: invincible), what’s the benefit of life insurance?
I had these same objections just a few months ago. But then I learned more about the benefits, and I bought my first personal life insurance policy.
Here are a few reasons why:
- The cheapest time to buy life insurance was yesterday
Life insurance gets more expensive every year, so why not buy it as cheap as possible? For a 25 year old male in good health, the premium could be as low as $18 a month! This policy would provide a tax-free $100,000 death benefit to your designated beneficiary if you die any time in the 20 year policy period.[1]
- Buying now secures your insurability for life
Let’s say you buy that 20 year term policy. If in 10 years you develop a significant health problem that could prevent you from buying more life insurance in the future, you are still protected. Even if you couldn’t buy life insurance because of your health impairment, if you currently hold a term policy, you can convert it into a permanent one, albeit for a higher premium, and keep it for life.
- It’s not for you – it’s for your loved ones
The main reason most people buy life insurance is to provide their family with tax-free money in the event of an untimely death. But what if you’re single and have no kids? Well, there are still plenty of people affected by your death! Your funeral expenses need covered, which can be $10,000 or more. Also, any co-signers on a loan you have may still have to pay that loan if you die. That $100,000 policy protects your family members. And remember, if you get married and have kids, but become uninsurable, you can convert the term policy into a permanent one.
Life insurance when you’re young is inexpensive and has long-lasting benefits. It protects your insurability in the event of future health problems, and protects your family in the event of a premature death.
Still not convinced? Or do you have other personal finance questions? Let’s talk! Face The Fear is here to help millennials make smart financial decisions that fit their lifestyle. Contact us at: facethefearfw@gmail.com
[1] Protective Classic Choice Term, Male, Indiana, Age 25, $100,000, 20 year term
Article Contributed By: Xavier Serrani
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