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Term life insurance provides many benefits for people in their 20s. Even if you don’t have any dependents, several other reasons to have life insurance.
Here are ten reasons you should consider buying term life insurance in your 20s.
Term Life Insurance in Your 20s: Should You Buy it?
Term Life Insurance vs. Permanent Life Insurance
Before we get into why to buy term life insurance, let's take a quick look at the difference between term and permanent life insurance policies.
Permanent life insurance policies are more expensive than term life policies, but they offer lifelong coverage.
Term life policies only last for a certain number of years (usually 20 or 30), after which the policyholder must renew it (at a much higher rate) or purchase a new policy.
How to Find the Right Policy
When looking for a policy, consider your needs and budget. You don't want to overspend on coverage that you don't need, but you also want to make sure that your affairs are settled if something happens to you.
Reason #1: It Can Help Pay for Life's Expenses
One of the biggest reasons to buy term life insurance in your 20s is to help pay for life's expenses. This type of coverage can provide a financial safety net for you and your loved ones if something happens to you. You can use it to cover funeral costs, final medical bills, and other outstanding debts.
You can also designate a cause you care about to receive the money upon your death.
Reason #2: You Can't Be Too Young to Get Coverage
Many people think that they have to be older to get term life insurance, but this isn't true! You can purchase a policy when you're as young as 20 years old. And the best part is that rates are typically lower for younger policyholders.
Reason #3: You Can Get Great Rates
One of the best things about term life insurance is getting great rates. In most cases, policyholders will pay less for coverage than for a traditional whole life policy. So, if you're looking for affordable life insurance, term is the way to go.
Reason #4: You Can Use It to Pay off Your Mortgage
If you have a mortgage, term life insurance can be a valuable asset. You can use this type of coverage to pay off your mortgage if something happens to you.
It is a worthwhile investment to have peace of mind for you and your loved ones, knowing that they won't have to worry about paying off your mortgage.
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Reason #5: Your Coverage Is Portable
Something else to consider about term life insurance is that it can be portable – which means that if you move to another state, your policy will follow along with you.
So whether you're relocating across the country or just down the street, having an easily-transportable plan like this one could make all the difference when it comes time to settle into your new home.
Reason #6: Coverage Can Start Immediately
One of the best things about term life insurance is that most policies go into effect immediately. So if something happens and you need coverage right away, your policy will be there to help.
There's usually no waiting period like there is with some other types of life or disability insurance.
Reason #7: You Can Cancel Your Policy at Any Time
Something else to consider about term life insurance is that you can cancel your policy at any time.
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If you decide that you no longer need coverage, or if your financial situation changes and you can no longer afford the premiums, you can terminate your policy without penalty.
Reason #8: It's Affordable
Another thing to consider about term life insurance is that it's affordable. Compared to whole life and universal life, you'll be able to save a lot of money by choosing this type of coverage over the alternatives – especially if you're young.
Some companies may offer discounts worth hundreds (or even thousands) of dollars every year based on your age alone.
Reason #9: You Can Add Coverage Later On
Something else to think about when considering term life insurance in your 20s is that you can usually add coverage later on without any problems or hassles.
Reason #10: The Rates Are Stable
One of the best things about term life insurance is that the rates are stable. Premiums will never go up (unless you choose to increase them), so you'll be able to keep your costs low and predictable for the entire duration of your policy.
Buy Life Insurance Policy
Whether you're just starting in life and want to make sure you're covered, or if you're looking for a cheaper way to insure your life term life is a great option.
As a certified credit counselor and syndicated writer at MaxMyMoney, Max has coached over 250 Millennials to help take the stress out of money. When Max is not coaching, you'll find him reading financial books, indoor cycling, or visiting local pawn shops looking for swiss-made watches.