Sep 10
20
Why Young People Need Term Life Insurance
For too many people these days, life insurance is one of the first things to be sacrificed in a down economy. Big mistake! If you think things are bad now, how will they be for your family when you’re not around to take care of them? Additionally, assuming you have term life insurance (which you should), you’ll have locked in a certain rate when you set it up that has you paying a higher premium to start in exchange for lower premiums later on; by letting your insurance lapse, you lose that extra money you’ve invested and, should you seek to set up a new insurance policy after your financial situation improves, you’ll find that your new rates are likely to be much higher than your old ones.
Term life insurance really isn’t all that expensive, provided you don’t wait too long to get it. A healthy 20-year-old is unlikely to die before reaching the age of 50 (and a healthy 30-year-old less so), so a fairly large amount of insurance can be had for that time period for relatively cheap. Yes, it’s several hundred dollars per year that could be put to other uses, but isn’t it worth that much to make sure that your family will be provided for in the unfortunate event that anything should happen to you?
Notice that throughout this article, talking about life insurance, we’ve referred only to term life. Whole life is term life bundled with an investment option, generally one with high fees; in fact, generally the entire premium for the first year will go to the insurance salesman. While there are occasional circumstances where whole life may make sense, for the most part it’s better to stick with the cheaper term life and invest the difference yourself.
For more information about insurance, investing, and other financial topics, be sure to check out Twenties Retirement, the site for young people who want to be sure of enjoying their later years.
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