Young people, fresh out of college, have a lot on their minds nowadays. They have to deal with getting a credit card, a car, funds to relocate or to find housing, and all of this in addition to their student loans. That’s why, for many, life insurance is last on their lists of priorities.
But this is a mistake. If used appropriately, life insurance can be useful even when the death benefit is not triggered. It is a mistake to think that this kind of insurance is only for older couples, with children and mortgages. Here’s how it can help you.
Reasons to get life insurance while in your 20s
This is probably something everybody knows about life insurance, and it’s also the most obvious reason to get it. If your student loans are causing you sleepless nights and you don’t want to create any unwanted financial problems for your family, then it’s pretty clear what you have to do.
But that death benefit is not the only reason to get life insurance. Some policies also cover certain medical problems. Not to mention that, permanent life insurance policies can serve as tax-advantaged savings vehicles through the accumulation of cash value, which works a lot better for people in their 20s than it does for people in their 50s.
A cash value that builds for decades can amount to hundreds of thousands of dollars in future tax-free income. It can be extremely helpful during retirement. But it only works if premiums are paid consistently.
You don’t get life insurance for yourself, you get it to protect those you love, who might have to deal with different financial problems in case you die. Although it may not look like it, there are many good reasons to get insurance while you’re in your 20s. Ultimately, it’s all up to you. You have to figure what your priorities are and do what is best for you.