5 Reasons You Should Get Life Insurance Now – Especially if You’re Young

If you’re a millennial in today’s economy, odds are good you’re more concerned with paying for food, rent, and other day-to-day expenses than you are with thinking about life insurance. Industry researchers found in 2015 that 67 percent of millennials prioritize daily expenditures over investing in life insurance.

While some might argue that young people are spending too much money on avocado toast, the reality is they’re shelling out for thing like groceries, rent, gas, and health insurance. That’s not a bad thing—obviously, eating food and keeping a roof over your head have to take priority over other financial investments. And if you’re young and relatively healthy, why concern yourself with questions of mortality when you have other, more pressing needs happening right now?

The reality is there are several good reasons to invest in life insurance at a young age. In fact, it may actually be smarter to purchase life insurance when you’re young and healthy than it is to wait until a later date. If you have the funds to spare, here are five reasons why you should consider purchasing life insurance sooner rather than later.

You have a spouse, child, parent, sibling, or someone else who is financially dependent on you.

Life insurance isn’t just about you—after all, you’re not going to need the payout after you’ve passed away. Instead, it’s about protecting your dependents and loved ones so they aren’t saddled with funeral costs. (Given that the average funeral now costs upwards of $10,000, this is nothing to sneeze at.) Additionally, if you have a spouse or partner with whom you share finances, life insurance payouts can help make up for the loss of your salary and other financial contributions—and the same goes for any other family members who might be dependent on your income. Bottom line? If anyone in your life depends on you financially, your life insurance benefits can go a long way toward ensuring their financial solvency in the event that you pass away.

You have a co-signer on student loans or other debts.

If a parent, grandparent, or other member of your support network co-signed your student loans, car loans, or mortgage, then they may be responsible for that debt even if you pass away. (This is particularly true for private loans.) Life insurance benefits can assist with paying off these debts so your loved ones aren’t saddled with the loans (provided your co-signer is listed as a beneficiary on your policy). The same is true for any credit card debt that may be linked to a loved one.

You’re a penny pincher.

In almost every case, purchasing life insurance when you’re young is cheaper than purchasing life insurance as you age. The difference between purchasing life insurance in your twenties and waiting until your thirties can increase your premiums by as much as 50 percent—and if you wait until your forties or fifties the increase could be even more significant. Insurance companies view your age and health as significant factors when they’re calculating your mortality risk, which will then determine your premiums. If you’re purchasing term life insurance (which is the most popular option among younger people), this means you can pick the length of the term and lock in rates for that set period of time. Being young and healthy will put you in the lowest risk pool, which will help you secure a lower premium for the full length of your term. In fact, Health IQ specializes in finding the best rates for people who are focused on living a healthy lifestyle.

You’re keen on saving.

Though term life insurance is a more common choice for millennials, permanent life insurance policies have some upside. Permanent life insurance policies, although they tend to be significantly more expensive, can provide you with an additional savings vehicle to supplement your savings account and retirement investments. That’s thanks to accumulated cash value, a feature of some permanent life insurance policies that allows for part of your premiums to accumulate interest. As this cash value accumulates, you can borrow against it for expensive events such as weddings or home purchases or even use it to supplement your retirement in a tax-advantaged way. Of course, these loans will reduce both the cash value and the death benefit, but they can nevertheless provide you with a valuable money source when expenses are high.

For many young people, though, the ability to lock-in rates make term life insurance a more commonly used, popular, and logical option, as costs will be fixed and simpler to budget for.

You want life insurance in the future.

When it comes to life insurance, aging people with chronic health conditions are assigned to the highest risk categories—which means they also pay the highest premiums. Some conditions may even render someone uninsurable in the eyes of insurance companies. Purchasing long-term life insurance at a younger age—when you’re more likely to have a positive health status and less likely to suffer from serious health issues—is a great way to ensure that you have life insurance in the future. It can be hugely comforting to know you’re covered even if you develop a chronic condition as you age.

Far from throwing away your money, purchasing life insurance when you’re young and healthy may be one of the soundest financial decisions you make. From caring for your loved ones to saving money and increasing the odds that you’ll be insurable later in life, life insurance can provide you with peace of mind now and for years to come.