Get Term Life Insurance for Young Adults
Young, single and invincible. They think there’s no need for term life insurance for young adults. Think again. Paying student loans is not an easy thing to do. It can leave anyone broke. Most people will need coverage. It is better to secure one now as younger rather than unhealthy and older.
Getting Life Insurance When You’re Older Won’t Be Easy
Signing up for insurance requires undergoing physical exams. It’s easier to pass an insurance medical exam when one is younger and healthier. There’s a possibility of not getting granted the insurance when diagnosed with an illness.
It is wise to purchase life insurance as early as possible for protection. Tomorrow is not guaranteed. One must know there is no term life insurance for seniors over 70. Insurance companies don’t provide term life policies for seniors older than 65 years old.
The reason for this is because term life insurance takes effect in a given period or will cancel. Some examples are 5-year term, 10-year term and 20-year term. If someone gets a term life insurance for seniors over 80, the most good agents will recommend getting a whole life insurance instead which is ideal for seniors.
Pros and Cons of Term Life Insurance
Term life insurance terminates at the end and requires paying premiums for that time period. The insurance pays the beneficiaries an amount when the client passes away during the time covered by the policy. The advantage of this is receiving great value of their money or it’s simply cheaper.
In fact, term insurance is purchased in large amounts and the premiums are relatively small. Those who opt for term life insurance for young adults are those who wish to provide for their dependents. They know that once their kids have grown and the mortgage has been paid off, then they will have little use for this policy.
The disadvantage is that term life insurance policies are temporary. If the term expires and they still need life insurance, then they can re-enter the market if one qualifies. People do get older and less healthy. This means there will be significantly higher premium. However, the biggest downside of this plan is the expiration . The beneficiary may not even receive the benefit because they have outlived their policy.
Pros and Cons of Whole Life Insurance
Whole life insurance, on the other hand, provides death benefits when one passes. It has a cash value component that can also be accrued over time. This lets an individual borrow and withdraw funds when he/she deems necessary. The advantage of this plan is the lifetime coverage and it’s a permanent policy. As long as the policy is enforced, their beneficiaries will receive the death benefit when they pass away.
Another advantage is they can retain access to their money. The premiums they have paid for the whole policy becomes the cash value. Once sufficient amount has accrued, this can go through their loans and become available for them. They can use this to pay for medical bills or prescription drugs. This provides financial security for the client and his/her family.
They can also receive dividends. The insurance provider pays dividends to policy owners. This may not be guaranteed, but there is a possibility of earning extra income. A term life insurance cannot provide this.
They may also ask an attorney to use the death benefit to remove some of their estate taxes. In this way, they will leave their loved ones a hefty amount of debt when they pass away. The whole life insurance they signed up for can cover this.
The disadvantage of whole life policy is the higher premiums or simply expensive. Over time, this benefits never decrease and premiums never increase.
Should One Approach an Captive Agent or Broker?
The most common plan agents try to sell an over rated whole life plan that requires the policy holders to have a permanent policy with sky rocket premiums for a longer period of time. Those who can’t afford to pay this should not sign up period.
Let us say an adult is looking for a 10-year term life insurance. It is possible to get one because they are not yet 65 years old. The next question is: Do they go with a captive agent or a broker? It is highly suggested to go with a broker so they can have more insurance companies to choose from.
Some people rarely know that captive agents recommend only 1 or 2 insurance providers with few options and prices can be higher than the average market. At least with brokers, they can present various insurance providers with different insurance plans. They can show it in such manner that they can determine which one works best for an individual.
The Importance of Term Life Insurance
Going back to term life insurance for young adults, the truth is this age group rarely thinks about getting one. They think it’s something their parents invest in so that loved ones are protected from additional expenses upon their death. It’s better to have the policy for yourself so you know that your kinfolks are covered.
Although some young adults aren’t married yet, they should consider term life insurance because marriage is part of the future. This kind of insurance can definitely alleviate the financial impact of someone’s death to their loved ones.
There are also a number of benefits for young adults can gain from purchasing term life insurance in their prime. They must remember that the older they get, the more expensive insurance gets. The cost of permanent life insurance gets more expensive as one ages.