Some young, healthy adults — especially those without a significant other or kids of their own — might not think of getting life insurance as a priority. But they may be surprised to learn life insurance can benefit more than just those with dependents, or those with health concerns. Plus, getting a life insurance policy when you’re young could be a smart decision, financially
The following are three reasons life insurance is worth considering — even if you're young, single and healthy:
1. Life insurance can help those you love.
What that means to you: Even for single adults, if something were to happen to you, parents, siblings, or other family members could be left to take care of any outstanding debts. That means student loans, credit card bills or additional loans — like car payments or a mortgage — will need to be handled by relatives.
In that case, a life insurance policy could provide the funds necessary to cover all of those costs, as well as funeral expenses. Consider: during a period of loss, taking care of any financial concerns for your family can help alleviate additional stress. Although it’s never a fun topic, having a conversation about life insurance with someone you trust might help you pick the perfect policy for your needs. By preparing for the unexpected now, you’ll be providing future protection and peace of mind for your loved ones.
For more on what to consider when planning for the future, and some ideas on ways to start the conversation, click here.
2. Your health can play a role in determining your life insurance premium.
What that means to you: Depending on the type of policy, life insurers may use a number of health factors to determine insurance premiums (the annual cost of the policy). That means the younger and healthier a person is when signing up, the less costly their policy is likely to be. To obtain a life insurance policy you may be required to undergo a physical exam where your blood pressure, cholesterol and other vitals will be gathered. This helps the insurance company determine the level of risk you impose — so not smoking, regular exercise and a clean bill of health can typically help keep policy costs down.
If finding time to look into policies is an issue, signing up for a plan could be as simple as checking in with your human resources department, since many employers offer life insurance options to employees. And a great thing about obtaining insurance through your employer is that you may not be required to undergo a physical exam at all if you meet certain requirements such as being a new employee or if you experience a life event like marriage, divorce or having a child. To learn more about what types of policy offerings might be available to you through your job, click here.
3. Life insurance could help you fund prospective goals.
What that means to you: Most people tend to go with a term life insurance policy, which lasts for a set period of time. An alternative option is a permanent life insurance policy, which lasts for a lifetime and often includes a potential cash value. This type of life insurance policy is usually more expensive, but also provides additional benefits. For example, whole life insurance policies may allow you to borrow funds for things like a down payment on a home or college education.
Whether or not you plan to get married and have a family, signing up for a life insurance policy now is a great way to prepare for wherever life takes you. For single adults who do eventually get married and start their own family, they’ll be one step ahead with a life insurance policy already in place. It likely comes with an affordable premium, as well, since you got it when you were younger.
Learn more about each policy type — and what they offer — here.
Open enrollment is a great time to learn more about the life insurance options available to you through your workplace. As you evaluate your options, keep in mind that in general, industry experts recommend having enough life insurance to replace seven years of income. If the plan available to you through your workplace is not enough to cover your needs, you will also want to consider a supplemental life insurance policy.
Whichever type of plan you choose, signing up for a life insurance policy when you're young and healthy is a smart way to prepare for whatever your future may bring.