What I Should Know When Buying Life Insurance in My 20s

/ Life Insurance / Aug 18, 2023

Life insurance isn’t something that most people consider until their 40s, 50s, or later in life. After all, it seems like it would be easier to figure out your finances when you’re older, especially if you have young children or other family members that depend on you financially.

But there are benefits to life insurance in your 20s, whether you’re married with kids or single and renting an apartment by yourself.

Firstly, congratulations if you are reading this! You have taken the right step towards financial security early in your life. After all, the earlier you are, the cheaper the life insurance rates. Here are a few things to know while getting life insurance in your 20s.

What Is Term Life Insurance?

Term life insurance is a type of life insurance policy that provides coverage for a set period of time, typically 10, 20, or 30 years. The death benefit pays out if the policyholder dies during the term of the policy.

A term life insurance is the apt choice for first-time life insurance buyers. It is typically much inexpensive in comparison to permanent life insurance plans.

Why You Need It (and What Happens If You Don’t Have It)?

The biggest reason to get life insurance in your 20s is because it’s so affordable. A $500,000 policy at the age of 25 might cost you less than $20 a month.

That same policy would cost nearly 10 times as much if you waited until you were 35 to buy it. If something happens to you before then, however, your beneficiaries won’t have that kind of financial cushion to fall back on.

Without life insurance, they may be forced to take out high-interest loans or sell off your assets—neither of which helps their financial situation or honors your legacy.

How Much Coverage Do I Need?

Regarding how much life insurance coverage you need, there’s no universal answer. The answer is wholly dependent on your financial goals, liabilities, and needs.

Refer to our article below to know more:

How much life Insurance coverage should I have?

Should I Get Term or Whole Life?

Term life insurance is the most basic and affordable type of life insurance. It offers protection for a set period of time, typically 10, 20 or 30 years. If anything happens to you during that term, your beneficiaries will receive a death benefit.

If you live past the term, the policy expires and you get nothing. Whole life insurance, on the other hand, covers you for your entire life. As long as you pay your premiums, the policy will remain in force. Whole life Insurance also comes with an investment component that builds cash value over time.

In your 20s, we strongly think term life insurance is the better option to at least start with a life insurance policy. It can always be converted again to a permanent whole life plan at a later stage of your life. Contact our financial advisors to know more.

What If I Have Health Issues?

One of the main reasons to get life insurance in your 20s is to protect your loved ones in case something happens to you. If you have health issues, life insurance can be even more important.

Many people think that if they have health issues, they won’t be able to get life insurance. But that’s not always the case. There are many guaranteed life insurance plans available that can offer life insurance to people with health issues. However, these plans are more expensive than conventional term life insurance plans.

Always talk to a financial advisor before taking any decision.

How Do I Buy Coverage?

If you’re in your 20s and thinking about buying life insurance, you may be wondering how to get started. The process is actually pretty simple and can be completed in minutes.

Just get in touch with our advisors for a free quote and if you are happy with it, we can complete the whole process on behalf of you in a matter of minutes.