Whether you’re working a great job on Wall Street, tweeting away as a social media consultant or still “getting your life together” while living in your parents’ basement, as a single 20-something, you probably feel like you have most of your life way ahead of you. So why bother with life insurance?
Experts disagree about whether (and when) unmarried, childless young people should get life insurance. On one hand, nobody but you is relying on your income. On the other, buying early could get you some better deals.
First, it’s important to understand that there is a dizzying variety of life insurance products to choose from, from term policies, to whole life policies to combination and convertible life insurance policies that blend a little bit of both. If you are a member of the U.S. military, Servicemembers’ Group Life Insurance (SGLI) may offer you the coverage you need.
Whatever form it takes, life insurance offers benefits that can be useful even for young singles who are years from starting a family. If you have a good salary and can afford slightly higher premiums, the National Association of Insurance Commissioners recommends investing in whole life insurance, which has a tax-sheltered investment component. New York Life points out that the savings whole life insurance accrues can help you pay for college loans, down payments and even entrepreneurial opportunities.
Even if you don’t have a family or any dependents, you may leave behind expenses you may not have considered, according to New York Life. For one thing, life insurance can pay for your funeral expenses. And what if a family member took out student loans for you in his or her own name to help you out? If you die, that person would be left to pay them. Life insurance could help pay those debts.
What if you don’t have any financial obligations or dependents? Should you forget the whole insurance thing? Perhaps. But it’s conceivable that you may want life insurance in the future. It’s also conceivable that your health will change — and, if your health declines severely, you may be denied coverage or charged higher premiums.
But if you get a whole life insurance policy now, you can lock into a rate as a healthy 24-year-old. You can potentially keep those lower rates your entire life — even if you become an overweight heart transplant patient by the time you’re 50 — as long as you pay your premiums on time and meet the other obligations of your policy.
Of course, caveats apply. If you don’t have the income necessary to pay your premiums, getting life insurance may be a bad idea. Missing your payments could cause your policy to evaporate on the spot — meaning that all the money you paid in was essentially for nothing. If you have the means to do so, however, buying life insurance when you’re young and healthy can be a good investment — and can give you much-needed protection when that distant future suddenly sneaks up on you.