Despite its name, life insurance is often associated with death. It is seen as an end of life precaution, but the benefits of such a policy are more extensive and less expensive if purchased earlier in life. People in their twenties are often not thinking about purchasing a life insurance policy, but by starting young not only do they lock in more attractive rates, they get a resource that not only can support their dependents, but be accessed by themselves in times of need. Learn why the best life insurance is early life insurance.
Living Benefits
The reason to purchase life insurance is because an individual has insurable interests and wants to be protected from extreme accidents. Insurable interests include things like a car or home. Younger people might have larger debt obligations from their student loans or a mortgage that they do not want passed on to someone else. Generally, there are two types of life insurance policies that people in their twenties would benefit the most from: decreasing term insurance and permanent life insurance.
Decreasing Term Insurance
This is a form of insurance that covers a specific kind of financial liability such as a mortgage, or student loans. The face value of this particular policy decreases over time, similarly to the way a mortgage is paid down.
Permanent Life Insurance
This is life insurance policy that offers the chance for cash value to grow, which is often the most beneficial to young people. This type of coverage can potentially function as a tax-advantaged savings vehicle through the accumulation of cash value.
Lowered Cost
Life insurance is almost always less expensive for a younger person to purchase as opposed to an older one. While the cost differs the younger person receives the same benefits as an older individual, but for less money. Premiums are lower for those individuals in their twenties because younger people are typically in better health. Older folks generally have changing health statuses which makes it difficult or even impossible to obtain an affordable life insurance plan. Getting a policy as early as possible can ensure that premiums will remain low throughout a person’s lifetime.
Planning Ahead
Life insurance policies can be used to fund expensive life events. These events could include:
- Weddings
- Home purchases
- Children’s education
- Repaying student loans
An important aspect of life insurance is that the money is always growing and it is usually withdrawn without creating a tax liability. This means that the earlier people purchase a life insurance policy, the sooner they can begin to save for large purchases later in life. The cash value can be helpful as well to increase retirement income, or even allow people to retire earlier, all while being tax-free.
Life insurance is not only for death, it can help people finance their lives while they live them. The earlier one begins a life insurance policy, the more benefits one will have down the road. Plan ahead by contacting the TJ Woods Insurance Agency. Learn more about life insurance and find the policy that best suits you by getting a free quote today!
