Why Is It Beneficial To Buy Life Insurance In Your 20s ?
Published On Jun 03, 2021
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In a young age we often tend to neglect the importance of life insurance as we don’t have a lot of responsibilities. Life insurance may not be at the top of the priority list for many of us right now but aging is inevitable and it is considered to be wise if we plan for any unforeseen events ahead of its time so that it causes us minimal loss, at least financially.
Basically, the 20s are beginning to have the right tools and life insurance is the perfect financial weapon for the major 'what if' moments. Life insurance is a reliable and flexible product that can help you cope with a range of financial concerns.
Reasons for Buying Life Insurance Early
Investing in life insurance in your 20s or 30s can be a smart financial decision. Here are a few reasons why you should consider buying a Life insurance policy in your 20s.
1. Low Premium Rate
If you purchase life insurance, the premiums will stay the same for the lifetime of the contract until you adjust the amount of coverage. Buying life insurance at a younger age secures cheaper premiums which decreases the average cost you pay on life insurance over the course of your lifespan. Along with your age, your health is another determinant of how much you pay for life insurance. Getting covered before any health problems arise, such as elevated cholesterol or high blood pressure, helps you lock in relatively low premiums for decades to come.
2. Financial Stability for Loved Ones
You may have student loans, credit card debt, or loans for a new vehicle – and you may choose to purchase your first home. In the event of an untimely death or uncertainty, life insurance will shield your parents or co-signers from the burden of paying off your debts.If you are in a relationship or married and have a loan, life insurance will prevent the surviving partner from having to pay the remaining amount on its own or lose the house altogether. Many young couples with a tight budget choose term life insurance as an inexpensive way to get coverage for a fixed amount of time.
3. Saving Corpus
Most people tend to ignore this benefit. However, early investment establishes a positive spending pattern and protects financial discipline to ensure that excessive spending is stopped. It lets you organise your savings and make your monthly budget straightforward. Many who understand investing rules early are cautious about their money and much less likely to experience trouble over the long term.
4. Get Coverage For A Longer Period
Buying a life insurance policy not only gives you the benefit of low premiums, but also helps you to enjoy a longer period of insurance coverage. When you buy life insurance at the age of 25, you will benefit from coverage advantages for nearly 50 years. However, once you receive life insurance at the age of 40, your coverage will be less than 35 years.
5. Loan Facility
If you're going to go for a permanent policy, you're still developing credit that can be borrowed on. As the cash value of your policy increases, you will be able to borrow against it. The younger you buy a policy, the more benefit your policy will give you in return.
6. Benefits of Discounts
If you have other insurance plans from The Co-operators, such as Car or Home insurance, adding Life insurance will increase the rate you receive on those insurance policies, saving you money on the other insurance premiums.
There is a saying that “It’s better to be safe than sorry”, planning for your future is never a bad option and starting early gives you an edge as you gain more knowledge as you grow which helps you in making the right decision in the long run. Opting for a Life Insurance Policy in your 20s can be very fruitful as discussed above but one should always compare and review various other policies offered by different companies so that you get maximum benefit.