Insurance For Mid 20s

Many people in their mid- to late 20s lack the skills needed to manage their money and are unaware of the variety of financial products available to them. Purchasing a life insurance policy, for example, is something that rarely crosses the minds of most young adults.

There are specific questions most young people need to ask themselves. “Can you or should you depend on your parents to bail you out if you have an accident or suffer critical illness? Are they going to pay your rent? Your parking? Your cable bills? How is that going to affect your family situation?”

Is it really necessary for young adults to purchase life insurance?
Yes. Life insurance needs arise when you have a financial improvement or increased responsibility such as marriage, a new baby, the death of a parent, a home purchase, a promotion or new job, an increase in pay or when starting a business as a key person.

Can I afford to pay the premiums?
Compare the cost of insuring a vehicle that declines in value. Then look at the price of premiums that insure your life. Is it worth insuring a $10,000 vehicle, but ignoring the cost of a $100,000 life policy that will pay off the balance of the debts should you pass away? In certain cases, premiums are tax deductible.

Will I qualify?
If you are insurable, then risk determines the rating of premium based on age, sex, smoking status and lifestyle risk. Even speeding tickets can double your premiums, so insure while you are young and risk-free because once you start living fast and furious, you may no longer be insurable.

What are the benefits of purchasing life insurance at a young age?
The popular belief about life insurance is that it is only useful when you die to cover final expenses, to ensure your family maintains their standard of living and leave an estate. What many young people don’t realize is that life insurance is also useful while alive. It can be used as debt protection, to access liquidity, to organize your business succession, to supplement your retirement income and to provide for long-term care or home care.

How do you select the right life insurance for your needs?
Seek professional advice! The first thing any legitimate adviser will do is conduct a needs analysis and examine your entire financial situation. Never take any advice from someone who skips this step, as no fund recommendations should be made without a clear financial picture of the client.