Life insurance for 20 year olds is one of the most affordable, and often overlooked demographics for life insurance coverage. Young adults feel they are invincible and can take on the world without the protection of life insurance. For 20 year olds, life is about transition. Transition from college into a career, a possible move among cities, marriage, and the start of a family. Many 20 year olds do not think of life insurance coverage because they feel so young, but now is a perfect time to consider what could possibly be your first life insurance purchase.
With all of these life events happening it is important you are covered in the event of a tragedy.
Life insurance for 20 year olds is also a opportune time to purchase life insurance because it is extremely affordable!
Life Insurance And Young Adults: A Perfect Match
Purchasing a term life insurance policy in your 20’s could be one of the most important financial decisions you can make as a young adult. Not only are you covering your income and the assets you are accumulating, you are also saving yourself higher premiums in the future. Most life insurance clients in their 20’s are looking for coverage so they can “lock in” a low premium for the next 20-30 years.
It is not uncommon when we are approached by parents who want to insure their child who is in their 20’s because they have co-signed for students loans and other purchases. Obtaining life insurance for 20 year olds will ensure you have life insurance at an affordable rate.
Even if you don’t have any financial responsibilities yet, it still may be advantageous to get a policy now so you will not have to pay the higher premiums when you actually think you need life insurance.
Financial Responsibilities And Life Insurance In Your 20’s
If you are in your 20’s you may be in a whirlwind of life changes. It is not uncommon for young adults to encounter multiple events in a matter of year, or even months. Life insurance is a great way to ensure these events do not become a financial burden to your loved ones in the event of your passing. Some of these events may include:
- Purchasing your first home
- Getting married
- Paying off student loans
- Upgrading vehicles
- Starting a family
- Start of a career job
Life insurance will give you the peace of mind to know in the event of your death, your family will not suffer a financial catastrophe. When you are in your 20’s you have most of your working life ahead of you. That adds up to a LOT of income which would be lost in the event of your unexpected death. For example:
If you are starting your first career job at 25 years old and are earning $40,000 per year it may not feel like you are making a ton of money. But your ability to earn an income is your biggest asset, and without it, your family would suffer. To see the full financial impact, you must multiply your income times the number of years you would be working. If you never received a raise and worked for the next 40 years (retired at 65) you would be bringing $1,600,000 in income to your family. Don’t you think it’s worth insuring your income?
Life Insurance Options for 20 Year Olds
The most popular options for life insurance for 20 year olds are term life insurance and permanent life insurance coverage.Term life insurance provides protection for a specific period of time, with a level premium for a period of time. Term life insurance is the most affordable life insurance in your 20’s and can last anywhere from 10-40 years depending on your specific situation. As you increase the term period, your premium will increase because you are locking in your rate for a long amount of time.
Permanent life insurance will keep your premiums level throughout your entire life, and will also keep your life insurance protection in force as long as you continue to pay your premiums. Depending on the permanent life insurance, you may also have access to cash value in the policy, which you can access while you are still living. A popular option in your 20’s is to purchase a inexpensive term life insurance policy, and then convert over to a permanent policy when you are earning more income.
Shop Around For Life Insurance In Your 20’s
The process of applying for life insurance in your 20’s is normally much easier than later in life. It is important to weigh out your different life insurance options, because this is a policy you should intend to own for the next 30+ years. Through an independent life insurance agent you will be able to see a multitude of companies offering life insurance coverage. The next step is to pick a reliable company with a solid financial rating which will able to offer you protection throughout your life. The final step is to apply for an appropriate amount of life insurance coverage which will provide you the foundation of your financial future.