Many young singles assume that they do not need life insurance. Unfortunately, this misunderstanding is difficult to dispel before it is too late. After all, life insurance is one of those investments that you can’t buy exactly when you need it, and if you wait too long it’s going to cost a lot more to get.
The purpose of life insurance is to: a safety net so that your family or loved ones do not have payment difficulties bills or handle other financial commitments after you leave — but that doesn’t mean you don’t have to think about it until you have a family. Here’s what you and others need to know about it Myths about life insurance that are best ignoredand what facts to consider instead.
Life insurance only applies after death
In fact, life insurance is for the living. The name says it all and it is safe, the main reason for taking out life insurance is to protect your loved ones financially in the event of your death. but many life insurance companies too Having living expenses that allow you to use your plan in case You are diagnosed an incurable or chronic disease. Another way you can benefit from your life insurance while you’re alive is through cash value. Depending on your plan typemaybe you can Build tax-privileged wealth through your policy the ability to make withdrawals or borrow against value during lifetime.
All life insurance is too expensive
The cost of life insurance varies by age, gender, health and specific policy. The younger and healthier you are, the cheaper life insurance will be. For example, a healthy 35-year-old can pay less than $28 a month for a term Life insurance with a payout of $500,000 on death and a term of 20 years, according to Policy Genius.
If you are concerned about the cost, Business Insider advises you to start small. Get as much life insurance as you can afford now, and then reevaluate when you are able to Increase your coverage across the board. For your first plan, term life insurance is one of the most popular and affordable options. It’s a simple policy that offers great security Sum insured for a low premium usually over a longer period of time 10 to 30 years.
If you have health issues, consider exploring policies that don’t require medical exams.
You do not need life insurance if you are single and have no dependents
This is perhaps the most pervasive myth about life insurance: if nobody depends on you, why create a financial security blanket? The reality is that if they are transferrable debt, like student loansyou could blame your parents or other family members after your death. Life insurance is not just for married couples.
And while many think life insurance replaces lost incomeeven one stay-at-home parent not receiving a salary should take out life insurance. While they may not be the traditional “breadwinners,” the cost of replacing childcare or other household responsibilities should be considered and prepared for.
You should only stick with your employer’s life insurance
While many are corporate life insurance policies a While they’re an inexpensive (or even free) perk, they probably won’t be enough to meet your financial needs, and typically offer about a year of your usual salary. Investopedia explained: “If you have dependents who depend on your income, you probably need insurance of at least 6 times your annual salary… Some experts even recommend insurance of 10 to 12 times your salary.” It’s advisable to supplement employer-provided insurance benefits with policies tailored to your needs.
The bottom line: Life insurance is not a one-size-fits-all
Take advantage of the fact that life insurance is highly customizable. and cCompared to other forms of insurance, yours life insurance needs will change drastically over time. Think about it: children, marriage, divorce, reMarriage, caring for elderly family members, and retirement… and that’s just your thirties. (jokingly.)
Even if you don’t think you need it now, start with what you can afford and build up cover if your circumstances change. Nerd Wallet offers a convenient table that will help you Compare offers and companies like Policy Genius now Make it easy for you to shop at a good price. But instead of just relying on online platforms, it is It pays to consult a true professional.