Life insurance is something that is vital for every adult, and some children. Life insurance provides a death benefit when one is needed most, when someone has died. There are multiple types of life insurance including term, universal life and whole life. Within those broad categories there are certain subsets like annual renewable term insurance, variable universal life insurance, indexed universal life insurance, blended whole life insurance etc. I try to help people understand how much and what kind they might need to research.
Evan’s Note: I disagree with this Guest Blogger. I believe the time is much earlier than the one he proposes.
First off, you don’t ever have to buy life insurance; however, if you want to be smart, live comfortably, and ensure that your loved ones won’t be burdened by any financial strain that you leave behind—should something unfortunate happen to you—then you absolutely want to buy life insurance.
One thing that we all know is that life is completely unpredictable and, fortunately, life insurance policies know this, too. They come in many shapes, sizes, and can be acquired and customized for various stages of life. No one knows when tragedy will strike, but you can prepare as much as possible and when doing so, there’s several things to take into consideration.
Benefits of Buying Life Insurance Young
Unfortunately, many young adults in their 20s don’t even think to compare life insurance until they’re not in their 20s anymore and that’s a shame—it’s so affordable! At no other age is life insurance as affordable as it is when you’re in your 20s. You’re fit, in good health, and can get an affordable annual premium that your parents will turn green with envy over.
If you’re in your 20s and someone were to ask you, “Within how many years do you suppose you’ll have a family by?” more than likely you would say within the next 30 years, right? Right; in fact, statistics show that the answer to that question usually ranges within 5 to 10 years.
This is where the benefit of buying life insurance when you’re young comes in—you can acquire a $500,000 30-year-term policy for $350 to $400 per year. Such a policy will set you up for a huge chunk of your life—wives can be married, kids can be born, and their financial security for them can be in place before any of that even happens.
Life Insurance When You Have Kids
Despite these benefits, an answer to your question—the headline of this article—is simple: buy life insurance when you have kids.
LIMRA—an insurance industry research outfit—recently conducted a study of U.S. households to determine what percentage of them actually carried coverage to protect their growing families and the results were at a staggering all-time low. Only 44% of them possessed life insurance and a sizable percentage of that number—11 million—had children who were under the age of 18.
In 2010, 70% of U.S. households had life insurance—that’s a 26% drop over the course of 2 years.
Unfortunately, in these cases, children, spouses, and immediate family members aren’t protected if tragedy strikes. They take the full burden of debt, mortgages, expensive funeral costs, and that’s before their own life expenses and college tuition come into play.
WHAT’S THE LESSON: BUY EARLY
Once kids come around the bend, you’re already going to have enough financial burden and you don’t want to wait once they are here, due to costs being so much higher. Buy a term policy when you’re young, save yourself a lot of money with an affordable rate, and have rest assured that you already have a safety net in place for whatever comes your way!