For those in their 20s and 30s, Life Insurance probably isn’t something that’s really crossed their mind. Isn’t it something that only those entering their 50s should be thinking about? Well, not exactly. LifeSearch talk us through a few of the reasons why young adults should be considering taking out Life Insurance.
For anybody in their 20s and 30s, Life Insurance is something which probably has not crossed their mind yet. I mean, is it not something that only those entering their 50s should be thinking about
If you have responsibilities, it’s time to think about Life Insurance
Many Life Insurance providers do tend to focus on the over-50s market, which might be why you’ve never thought to look into it. The fact is, your age should not be the driving factor here, but instead the stage of your life.
Let’s say for example that you have bought a house and you pay a mortgage. That’s a big financial responsibility that needs protecting. Will your partner be able to cover the repayments if you’re no longer around? Add in a young family, or elderly relatives that you care for, and the need for Life Insurance becomes even greater. What would happen to them should you pass away? That’s what Life Insurance is for. The lump sum that would pay out upon a claim is there to help cover mortgage repayments and would mean that your family aren’t left in a tight financial situation without you around.
The minimum age for Life Insurance is 18 for a reason. That’s when we begin to build our lives up, reach milestones and gain the things that really matter to us – and that’s when we should be protecting this life that we’re building.
Taking out Life Insurance whilst young is cost effective
The younger you are, the lower your premiums will be. That’s because insurers will calculate premiums based on the level of risk. From the insurer’s perspective, young people have a lower risk of passing away during the policy term, therefore the premiums will be lower.
Someone in their 20s could find themselves paying less than £10 a month for their policy, dependent on other criteria such as their lifestyle and general health. Someone in their 40s or 50s may well be charged in excess of £20-30 a month, as there are likely to be more health and lifestyle factors that come into play.
What else should be considered before getting Life Insurance?
You may want to consider joint cover for yourself and a spouse or partner. It’s likely to represent better value for money which will be attractive for those who want Life Insurance but can’t justify spending much money on it.
That being said, if you can afford two individual policies, this might work better in the long run as it will result in two lump sum payouts. If one person on the joint policy should pass away, the other will be left once again uninsured. Even if both policy holders were to pass away at the same time, for instance in a car accident, there would still only be one payout. Would that provide enough support for the family you leave behind? It’s definitely something to consider.
There are other alternatives to Life Insurance that will still protect the things in your life that matter most. You could look at Critical Illness cover, which pays out a lump sum should you be diagnosed with a serious illness, rendering you unable to work and earn money. Although Life Insurance will only pay out if you actually pass away, you can combine it with Critical Illness cover for the ultimate protection. After all, you’re more likely to be off work sick than you are to pass away.
Don’t be fooled into thinking that just because you are young, you don’t need Life Insurance. No one is invincible and anything could happen to any one of us, at any time. It’ll be your dependants that will be left behind wishing that you’d taken out that Life Insurance cover – so the time is now.