Understanding Insurance Policies

So you are 20-something and you are just starting your life on your own. Your parents are telling you that you need to purchase a life insurance policy, but you don't understand why. Regardless of age, life insurance is very important. Insurance does a lot more than just protect possessions like cars and houses; a life insurance policy has the ability to protect your loved ones from any unexpected expenses that may crop up in the event that you pass away unexpectedly.

But No One Depends on You Financially, So You Don't Need It

At a young age, you may feel as if no one depends on you financially. You may not have a spouse or kids; however, you probably have student loans, right? More often than not, parents or guardians co-sign for those student loans. With student loans, co-signers will often be responsible for that debt if something unexpectedly happens to the original borrower. If you were to pass away, life insurance benefits could help your parents or guardian cover that debt.

If you end up getting married in the near future, life insurance would be able to replace income for your spouse or partner. If he or she has college loans as well, would he or she be able to pay his or her loans in addition to your own without having your income flowing in? It is something to seriously consider.

But You're Young And Healthy—Why Do You Need Life Insurance Right Now?

Life insurance is not just for the old and weak. In fact, you can get more affordable premiums when you purchase life insurance when you are young and healthy. Premiums are based on your health and age, so you are able to lock in better rates by securing a policy now. In doing so, you will have the peace of mind knowing that you are insured if you get ill down the road. Plus, there are certain conditions that can prevent you from obtaining life insurance or result in excessive prices.

But Isn't Life Insurance Expensive?

Younger people don't have as much income coming in as older individuals because they are trying to juggle college and a side job. Luckily, with the right policy, life insurance is affordable. Term policies tend to be less expensive, but it is important to keep your future in mind when purchasing this type of policy, such as buying a home, getting married, and/or having children. Plan for your future now so that you can avoid having to buy another policy down the road, which could cause a spike in premiums.

There are also permanent policies, which will remain with you for the rest of your life (as long as you make you premium payments!). These policies can be beneficial for numerous reasons, but they are more expensive. They allow you to save money because most of them build cash value. This money is yours, and once the money has accumulated, you can borrow against it if an emergency arises—though this does reduce the overall cash value of the policy as well as the death benefits, so make sure you understand the risks of make a withdrawal from your policy before you do so. Visit websites like https://www.windfallinsurance.com to learn more.