Northwestern Mutual

5 Reasons Why Life Insurance For Young Adults Matters

When you’re in your 20s and 30s, life is busy with possibilities—from launching your career and buying your first home to getting married and starting a family. As a result, it can be easy to put buying life insurance on the back burner. Yet now may be an opportune time for buying that coverage. To learn why, consider these five reasons.

  1. You could pay less for your policy. Your age and overall health are two of the most important factors insurance companies take into account when determining the cost of your life insurance. Generally, the younger and healthier you are, the more affordable it may be. Conversely, if you wait until you’re older to secure life insurance, it’s likely to cost you more for the same amount of coverage. That’s because premiums rise to reflect the higher chance of death as you age. Another reason to buy life insurance when you’re young: You’re less likely to have health issues such as high blood pressure, cancer or diabetes, which can make getting and affording coverage more difficult.
  2. Life can take unexpected turns. When you’re young, you don’t think about someday needing life insurance. But what if the unexpected occurs and something happens to you? Even if you’re single and don’t have any dependents, your family will still have to cover your funeral and/or burial costs; they’ll also be responsible for paying off any loans you may have asked them to co-sign with you. Life insurance can help ensure your loved ones aren’t burdened by these or other financial obligations should you prematurely pass away.
  3. People depend on you. Life insurance is vital, especially if you are married and/or have children, or if someone else, such as a partner, sibling or parent, relies on you financially for his or her living expenses. Life insurance can help ensure a survivor’s needs are met should something happen and you’re no longer around to provide support.
  4. Your workplace coverage may not be enough. If you have access to group life insurance at work, that plan likely provides only a basic level of coverage. This may be sufficient if you are single with no dependents and no debt; however, if you have a family and/or a mortgage, or your spouse or partner doesn’t work, chances are you’ll need more coverage. Equally important, employer-provided coverage ends when you leave your employer. At that point, your age and health status may make qualifying for and affording an individual policy more difficult. For this reason, it may make sense to purchase a supplemental individual policy on your own. That way, you’ll have the comfort of knowing you’re helping provide for your loved ones.
  5. You want your insurance to do “more.” There are two main types of life insurance: term and permanent. Term life insurance provides coverage for a set number of years; permanent life insurance remains in force for your entire life, assuming you continue to pay your premiums on time. While the primary reason to buy either type of life insurance is for its death benefit, permanent life insurance also provides benefits while you’re alive. This includes the ability to build cash value in your policy on a tax-deferred basis. Eventually, you can access your accumulated cash value and use it to help meet important financial goals like paying off student loans, buying a house, funding a child’s college education or supplementing your income in retirement, among others. Of course, the sooner you buy life insurance, the more time you’ll have to build cash value in your policy.

When you’re young, one of the last things on your mind is life insurance. But the truth is, you never know what may happen in the future. Buying life insurance now, while you’re young and healthy, provides a cost-effective way to help ensure a certain level of financial protection for you and your family. This is where a financial professional can help. He or she can help identify your needs and concerns, explain your options and make sure the type of life insurance you select is right for you and your unique situation.