Common misconceptions can prevent young adults from purchasing, or even considering, life insurance options. Currently, there is a higher demand for life insurance than there is actual ownership¹. This alludes to a disconnect between people’s understanding of the need to plan for the future and actually taking the steps to do it.
For young families and singles, it may seem like there’s plenty of time for them to secure a life insurance policy. They may consider themselves too young, healthy, or financially dependent to require a policy of their own. In fact, these factors may be the reason the best time to purchase is right now!
Young & Healthy
Being young and healthy in your 20’s or 30’s is probably not the time most individuals are inclined to plan for their death. However, obtaining a life insurance policy during these ages can result in securing it at a low price. Health issues do not discriminate by age and could suddenly put life insurance out of reach for someone who could have easily afforded it during healthy years.
There is also the possibility of obtaining a dependent unexpectedly during these years, or shortly after. This could occur through having children, taking on the needs of aging family members, or a special needs sibling. Since the cost of care is not cheap, life insurance would create support for these loved ones in need should something happen to the supporter.
Being Financially Dependent
There are many ways in which to be financially dependent as a young, single adult. You may have parents who cosigned for you on a lease or loan. While it may not occur in every case, a cosigner on a personal loan may be responsible to pay it off in full following the death of the financed individual. An unfortunate circumstance such as this could result in parents dealing with extra financial burdens on top of the grief they would already be experiencing.
Additionally, a young, married individual may not be the breadwinner in their family or may be a stay-at-home parent depending solely on the income of a spouse. While it may seem like only individuals providing the bulk of financial support need to plan for their dependents, financial burdens can be incurred due to the unexpected death of a dependent as well. A stay-at-home parent provides valuable services to the family which would be costly for the surviving parent to cover (childcare, housekeeping, etc.). Funeral costs can add up and a widowed spouse would most likely need to take some time from work to mourn.
Considering life insurance at a young adult age may seem daunting. However, it doesn’t have to be complicated or unaffordable. By addressing reasons why it makes sense to consider life insurance earlier in life, financial professionals can help young adult clients bridge the gap between wanting to secure their future and taking steps to do it. For more information contact IFN today! 800.921.3100
¹2017 Insurance Barometer Study, Life Happens and LIMRA