The premise behind life insurance policies is rather simple. When you are the breadwinner of the family, having life insurance helps ensure that your family will be provided for even if something bad happens to you. “Bad” usually means death, but it doesn’t have to. Some life insurance policies offer partial and total payouts if you suffer critical injuries, are rendered unable to work, or if you are diagnosed with a terminal condition.
Looking at that description, it may seem like life insurance only makes sense for older people. After all, if you have no family to look after, what’s the point of paying premiums every month? Well, it turns out there are many ways in which makes sense to get life insurance early on. Here are some of the reasons why a healthy 21-year-old should consider getting a life insurance policy.
1 – You can lock in a great rate
Life Insurance premiums are cheaper the younger you are, and to make things better, most policies don’t require you to adjust the price of the premiums as you grow older. This means that if you buy a 30-year long life insurance policy in your 20s, you’ll still be paying the same amount of premiums in your 50s. The same goes for whole life insurance, which will cover you for as long as you’re alive.
This is a sweet deal if you plan on having a family in your 30s. If you plan things right, you can buy an insurance policy that will expire just as your kids finish college. At that point, they will be out of the nest, and you’ll be able to take on a cheaper insurance policy. Or go without entirely.
2 – You can build your credit score
There are many factors that are taken into account when companies determine your credit score. One of them is how reliably you cover your various monthly payments. This means that if you get a cheap life insurance policy — say one that only costs you £10 or £20 a month — you can use it to build a credit score with almost zero effort.
This will make it easier for you to secure loans when you are done with college. Loans that you can use to start a life with your future spouse, or to build your own company. Always use a reputable loan comparison site especially if you have bad credit as you could end up paying well over the average by going to some direct lenders who promote themselves to people with poor credit.
3 – You can get living benefits
As mentioned before, life insurance can benefit you in a variety of ways while you are still alive. Depending on the type of insurance you choose, you can enjoy a variety of benefits. From receiving a partial payment in case you suffer a major health event, to receiving the full value of the policy if you are ever diagnosed with a terminal condition.
These living benefits can make life easier for you and your loved ones if tragedy ever strikes. And since insurance for young people is often very cheap, you can get these benefits without having to break your bank. If you never checked the price of life insurance before, InsuranceHero.org.uk can help you get started.