Term Insurance in your 20’s

So you are in your twenties and healthy and don’t need life insurance…..think again! You are now at the perfect age to get life insurance.

       Why Get Life Insurance? 

This is the perfect time to purchase life insurance. You are probably at your healthiest and at your best weight. Why not purchase it when you are young and fit? A little early planning can help you save hundreds if not thousands of dollars.

Lets take a deeper dive!

 

 

Why Now?

You are probably reading this article thinking why now? Death isn’t anywhere near in the future. Guess again! Death creeps up on everyone and now is going to be the cheapest time you can purchase life insurance. You either already have or about to experience marriage, new home, new care , a family and much more. With all time exciting life events comes extra responsibilities. A expected death could leave your spouse and family with all your bills. Life insurance gives you the ability to protect your loved ones.

In your twenties, your premiums will be inexpensive in comparison to your later years.  You may also be able to qualify for a better rating. Better rating may help you qualify for better terms and conditions.

Case Study: Myself

Hey I get it, life comes at you fast and the last thing on your mind is life insurance. I didn’t purchase my first life policy until I was 26. My 1st policy was a 250,000 policy that cost me a mere $12 dollars per month.  Looking back I was lucky to get this policy set up at the time I did. I had just ran a marathon and completed a 210 mile team relay. I thought I was invisible. A few months later I had a trip to the hospital after months of having migraines and almost passing out while driving. During this time I didn’t know what was going on. I was screened for diabetes, cancer and even MRIs done to see if it might be a tumor. After months of many doctor visits, it was finally concluded that it was a mixture of migraines and bad medicine recommendations.

While I was very lucky to not have something major going on, I realized the importance of my life insurance policy. I had put getting life insurance on the back burner for so long.  During this time, I had put my wife and daughter in jeopardy if something happened to me.  For a long period of time, I relied on my employer provided group life policy. After doing a little research later, I found out that the policy only cover about 15,000. This would cover my funeral and maybe a few bills.

Important Time to Look at Life Insurance

  1. Getting Married – When getting married you now have more than just yourself to worry about. When you take those vows to provide financially, it doesn’t end when you die. You want to make sure you protect him or her from your financial burdens.
  2. Buying a Home or Car – When making a large purchase whether it be a car, house or something else, you want to make sure to have enough life insurance to not have to pass them bill on to your loved ones.
  3. Having Children – Whether you are having a new baby or adopting, you are going to be one of their sole providers.
  4. Start your Own Business – When starting a business you have to protect your family, business partners and business in the event that you die.
  5. Other Major Life Events – Anytime you take on more responsibilities, take out a loan or take a risk you want to make sure and protect your friends and family.

Which Type Of Life Insurance Should I Buy?

There are two major types of insurance you will likely consider at this age. Many people will make the decision between term insurance and whole life insurance. Lets take a look at each of them:

Term Insurance will be the most inexpensive option. With this type of policy, you will be covered for the death benefit for the term of the policy. Typically this term will be for 10, 15 ,20 ,25 or 30 years. A newer type of term insurance is called Return of Premium. Although this is a more expensive option, it allows you to get the money back you paid in premiums. ROP sometimes gives you the ability to stop paying premiums if you just want to take the death benefit the insurance company is offering when you die.

Whole Life insurance is a policy. This policy pays a death benefit if you die now or 50 years from now. It is known as a permanent policy because as long as you keep paying the premiums, you will have the death benefit. By purchasing this policy in your twenties, you will likely be able to get a higher death benefit for a cheaper price. As you age, your prices will start to creep up quickly because you have a higher chance of death. If you are in a crunch for money you won’t have to worry. Whole life also holds a cash value that you can cash out or borrow against.

Case study 1:

A 29 year old  male could be covered for $31.90 per month on a 30 year term for $500,000. This would be if he was health and qualified for preferred best rates. This category would be easier to qualify for at a young age. Over the 30 years, the client would pay about $11,484 dollars.

Take that same male at 39 years old and the would pay $48.35 per month.  That would bring the 30 year total premium to $17,406. That would only be if he still qualified for preferred rates. Now if that same male had health problems and had slipped down to just preferred rates, the rate would be $58.32 per month or $20,995 over the 30 years.

What if I have Life Insurance Through Work?

Many employers may offer life insurance as an incentive to work for a company. If you do have life insurance through work make sure you understand the policy. If an employer is going to pay for a life policy, you should definitely take it.

One important thing to remember is that employer provided coverage is supposed to typically be in supplemental to your primary life insurance. Keep in mind though that if you leave your job or get fired, you will likely lose the coverage. Most people want to move up and have a successful carrier and most times this may involve switching jobs from time to time.

Why does Rating Matter?

The rating the insurance company gives you makes a huge impact on your rates. They give you a rating based upon you health and family history. We typically recommend someone get life insurance set up while they are in their twenties because this is when they are usually the healthiest. If you wait until your later years, statistics show that you are more likely to have some kind of health problem condition. Family history can make a big impact on your rate but it is important to remember that not every company is the same. Different companies will have different guidelines. This is why having an independent agent that can work with multiple carriers is so valuable.

Which Type of Policy Should you Chose?

Their is no great answer for what type of policy you should choose. Many agents argue for term while others argue for whole life. Everyone has a different expectation for retirement, standard of living and different exposures. It is always great to talk with an independent insurance agent to help get recommendations. The great news is that with term insurance, many policies have a convertibility period. This means that you can convert the policy to a permanent policy as long as you do so in a certain time period. Many companies even give the the ability to do so without having to answer health questions or having to take another medical exam.

What if I have Health Problems?

Life comes at us fast. Sometimes we just can’t avoid health problems or don’t realize we have something going on until its too late. At Millennium Brokers we take a look at your health background to make a recommendation on which company might provide you the most favorable terms. Not everyone is a good fit with one particular person.  Having an insurance broker can be a great asset. Our quoting process, helps match you with a company that will be a good fit.

What do I need to get a quote?

Whether you live in Springfield, Republic, Ozark or Nixa, getting a life quote can be simple and easy. A minute phone conversation can help protect your family. You can get a no obligation life quote from about 15 companies within minutes. You can also visit us at 2100 S. Brentwood Blvd, Ste G in Springfield, Missouri or call us at 417-773-7822.

More Information

Request Your Proposal Here

Are you ready to save time, aggravation, and money? The team at Millennium Brokers is here and ready to make the process as painless as possible. We look forward to meeting you!

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