Life insurance is a very important topic. Insurance that pays out a sum of money either on the death of the insured person or after a set period. It is basically designed to protect you and your family in the event of your passing. The problem is that many younger individuals do not think about this investment product because, obviously, they don’t think they will be passing any time soon and think they have time to establish financial stability. Below is an explanation as to why someone should still consider a life insurance product even if they are young.
What is Life Insurance?
The goal of life insurance is to provide a measure of financial security for your family after you die. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. You basically take out insurance and are paying a monthly premium to take a gamble on your life expectancy. It is a contract that can be looked at an investment in some cases. There are different kinds of life insurance that would need to be researched to see what is best for you in your case.
When enrolling in a life insurance policy, there are many questions you need to ask. It is important to consider your current financial situation and standard of living, and decide what would need to be continued on for your survivors if you were to pass. It is important to evaluate your situation on an annual basis and also if any major life events occur.
Millennials and Life Insurance
So when is the right time to look into this? As explained in this article, if you have anyone who relies on you it is important to have life insurance. Young 30 somethings, or millennials, need to start thinking about insurance once they start a family, buy a house, car, etc. because someone will need to be responsible for the bills in the event something happens to you.
Benefits of Getting It Young
Besides being responsible, there are many benefits to getting life insurance when you are young. The main one is, you will save yourself money! Basically, if you are in decent health, the younger you are the cheaper it is to get life insurance. Many factors determine a person’s premium amount but the biggest factor is age. The reason for this is obvious, the younger you are the less likely there will be a payout because death is not expected. The younger you are, the more healthier you are as well. Healthier is cheaper for insurance companies. Insurance companies also like young investors because the longer someone holds a policy, the longer they they will be making money from your premiums.