Many think life insurance is only necessary when people get older and have families. However, it can also play a vital role in a young adult’s financial plan. It can help young adults plan for the future while locking in lower premiums. Still, many young adults may be new to life insurance and confused about how to get a good policy.
Life insurance can be a key element of any personal finance portfolio, regardless of age. If you’re young and healthy, a life insurance policy can help your loved ones, including your parents, manage unexpected expenses should something unforeseeable happen to you. If you’re planning to have a family down the road, buying life insurance now is an affordable way to protect them financially in the future.
This article will help explain how young adults can choose the best life insurance policy, whether that’s a standard term or permanent policy or simpler life insurance with no medical exam. How do you determine whether the cost of life insurance is worth it and which company is the right fit for you? There are a few simple guidelines that can help you decide whether it makes sense for you to buy life insurance right now.
Why Get Life Insurance as a Young Adult?
Young adults may not yet have a spouse or kids, but they shouldn’t rule out life insurance.
For one, life insurance premiums rise with age. Getting a life insurance policy while young lets policyholders get the best possible rates — especially helpful if they start families in the future.
Additionally, young adults can build wealth if they get a permanent life insurance policy, thanks to the cash value growth component. Part of each premium goes into this component, which grows at a certain rate depending on the type of permanent policy.
How to Choose the Best Life Insurance Policy as a Young Adult
Life insurance may be new to many young adults, so they can be unsure how to get a good policy. Here are some tips:
1. Know the Coverage Amount Needed
First, young adults should know how much coverage they need. If they have dependents already, they may need to get more than someone without dependents.
Additionally, they should consider their living expenses. Higher living expenses may require the policyholder to get a larger death benefit.
2. Pick the Best Policy Type
Term policies last for 10-30 years. They’re inexpensive, but the policyholder risks outliving the policy. Permanent life insurance is more expensive, but coverage lasts for life if the policyholder pays premiums on time. Plus, it has cash value, as mentioned earlier.
Once the cash value grows enough, it can serve as a source of wealth for policyholders. They can borrow against it with no credit check and at low interest with no due date, or they can withdraw from it.
If the policyholder surrenders the policy, they receive their full cash value minus surrender charges.
3. Compare Providers
Once the prospective policyholder knows the coverage amount and policy type they need, they should compare providers.
The best way to do this is to shop for life insurance quotes online. Policyholders can gather numerous quotes quickly without leaving home, making it easy to find which insurer offers the best rates.
That said, prospective policyholders should also look at customer service reviews. Paying a few more dollars monthly for an insurer with a stellar customer service record may be worth it.
Getting the Best Life Insurance Policy For Young Adults
Young adults can take advantage of their youth by locking in low life insurance premiums, ensuring they cover any dependents in the future. Life insurance shoppers should start by figuring out how much coverage they need. From there, they will want to choose a policy type — term life insurance if they’re on a budget or permanent life insurance if they want lifelong coverage and wealth-building potential.
Finally, young adults will want to shop around for multiple quotes and research customer reviews to get the best rates on the coverage they need from a great insurer.
Fidelity Life offers no medical exam life insurance. Life insurance shoppers can discuss their options with a licensed agent or shop for online life insurance quotes. Shoppers just need to answer a few questions before being matched with a policy that suits their needs.
Fidelity Life will then guide the applicant through the application and purchasing process.