Why Buy Life Insurance when you’re Young

Many young adults believe in financial planning. However, life insurance is rarely taken into account when it comes to creating a plan. When you talk about financial planning, what comes to mind for many young people is having a strong financial foundation, building an emergency fund, creating a budget, saving to pay off debt or for retirement. Life insurance is often forgotten because, to a young person, death is still a long way away. If you are young, healthy and you don't engage in habits or activities that could compromise your health, why would you have to think of dying?

Statistically, many healthy young individuals have died within the last twenty-four hours. So, death is not necessarily only about age and or how healthy you are.

According to a Princeton Survey conducted in 2017, about 65% of young adults between the ages of 18 to 29 years old did not have life insurance. Out of this percentage, about 71% thought that it was not necessary because they were still young and in good health. Interestingly, there are several reasons why you should buy life insurance sooner rather than later. In this blog post, we will explore the top 9 reasons to buy life insurance when you’re young.

Top 9 Reasons to Buy Life Insurance when you’re Young

Life insurance is something everyone needs when building a good financial plan. However, only a few people have it, while many don't even think about it. It's very easy to ignore the necessity of buying life insurance when you are young and strong. However, you have to know that the longer you wait, the higher the chances are that something may happen before you get around to purchasing a policy. If you have been contemplating buying life insurance coverage, but you are not sure how to go about it, emma.ca can be of significant help to you in making an informed decision. You will be connected to an expert on our platform, and they will help you determine your needs. They will also recommend the appropriate type of product tailored to your situation. If you are still unsure if you need life insurance, the top 9 reasons to buy life insurance when you’re young listed below should help you better understand the importance of acting now.

1. Substitute Lost Income

One of the 10 reasons to buy life insurance when you’re young is that it creates financial security for your family or loved ones if you die. Even if you are in your 20s, you should give this a serious thought. You are not going to be in your 20s forever and sooner or later, you may want to start a family, which will lead to people depending on you. If you don't make appropriate arrangements for those closest to you, there is a high chance that they will be in a tight spot financially if you die unexpectedly. You should purchase an adequate life insurance policy so that you won’t leave your family or spouse without financial protection. The potential payout will greatly help them pay the household bills or the childcare cost. At emma.ca, we are always ready to offer advice and help create the right plan for you.

2. Pay off your Debt

The fact that you pass away does not mean that your debts will die with you. If you and your spouse co-signed for the mortgage or any other loans, the responsibility of paying off the debts or mortgage would fall to your spouse. If they are unable to pay, the creditors may decide to collect the debt from your estate. Although this may resolve the issue, your heirs might find themselves without a roof over their heads. When you buy life insurance, you guarantee the financial security of those you leave behind.

3. Cover Burial Expenses

Although the demise of a loved one is painful, necessary tasks like planning (and paying) for a proper burial still need to be taken care of. Unfortunately, the cost of even a simple funeral service can quickly add up to several thousands of dollars. Of course, you can pre-pay for your own funeral, but it is not in the habit of most young people. Unfortunately, death can occur at any time. With life insurance, you don’t have to worry about what happens after you are gone because the policy will more than cover for it.

4. Strategic Business Planning

For business owners, it is crucial to buy life insurance. With such a policy, you are assured that your obligations are well covered, and your years of hard work won't be wasted. If you are in a partnership business with someone else, it is recommended that both parties buy life insurance. This is to secure the future of the business and the parties involved at the demise of one of the partners.

5. Grow Cash Value

There are two major types of life insurance; term life and whole life. The term policy is active for a specific period. At the expiration of this plan, if the policyholder is still alive, there will be no payout. However, the whole life policy offers permanent coverage for the policyholder, and it only comes to an end when they cancel it or die. This allows you to grow your cash value over a long period. This can be an attractive prospect for many people. The cash value can act as an additional cushion that can be used in certain circumstances when it has accumulated sufficient value. It can be quite handy in cases of financial distress.

6. Investment Diversification

When you buy life insurance, it can act as an investment tool, especially if you opt for the universal life policy. This type of insurance is tied to a particular investment product. Depending on the performance of the product, the policyholder will receive a dividend payment, which can help attain goals such as estate maximization or tax-deferred growth, adding diversity to an investment plan. But, before purchasing this type of product, it's important to read the fine print and to make sure your traditional investment vehicles are maximized. You can visit emma.ca to learn more about the available insurance policies and how each can benefit you.

7. Taxes upon death

When an individual dies, it is assumed that he/she ''sold off'' all of his assets right before his/her death. There are often taxes that need to be paid before the heirs can access their inheritance. Owning a life policy can help your heirs pay off the estate taxes or offer them quicker access to funds if they are designated as beneficiaries.

8. Peace of Mind

The future is unpredictable. However, when you buy life insurance, you have the peace of mind that your loved ones will be financially protected in the case of any eventuality. You don’t need to go overboard with the amount of coverage. A small life cover policy can make a world of difference in the financial protection of your loved ones.

9. Life Cover is Affordable

This point can't be overemphasized, making it number 9 on our list. A popular excuse that young people give for not purchasing life insurance is the perceived high cost. The truth is that life insurance is affordable for many people. Buying a life cover policy at a young age makes it even more affordable. This is because the younger and healthier the insured is, the lower the premiums the insurer demands are. However, if you have any pre-existing health condition or if you smoke, your premiums may be higher even at a younger age. Additionally, choosing a term life insurance is less expensive when compared to permanent life insurance. Come chat with one of our experts to know more about the options available, as well as the pros and cons of each type of policy.

Conclusion

We hope our list has helped convince you to stop putting off buying life insurance. Feel free to explore our website emma.ca and come chat with one of our advisers. Our licensed experts will guide you through the entire process of finding the perfect policy to meet your needs.