The Buyt Desk
Most people start earning in their early 20s. And buying Life Insurance early in life when you start earning has many benefits. Let us know in detail.
The 20s is an age group when many start their first job and start earning. This is the age when people plan to build a strong financial foundation for a better future. So this is the right time to buy a life insurance policy as it goes a long way in strengthening your financial foundation. The 20s is the age when youths are full of hope, dreams, and optimism about their future. They have enthusiasm and boldly take steps in life without much hesitation. They are ready for adventure as they do not have too many responsibilities. Also easily many forget to plan investments or make financial planning based on their goals.
It is good to make investment habits early in life because you are young and healthy. There are many investment tools, that will help you secure your future and life insurance is one such investment tool. It is usually neglected by youths in their 20s thinking it is for old people. But they cannot see how it will help them build a fortune for the future while protecting themselves and their dependents during emergencies like accidents, ailments, or death.
Why should one buy Life Insurance in your early 20’s?
Investing in your 20s is much easier, affordable, and beneficial than in your 30s or 40s. Below are some basics which explain why you should buy life insurance in your 20s –
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Advantage of youth – Your age, health, and lifestyle decides the premium of a life insurance policy. The better it is, the lesser the premium. The younger and healthier you are, you need not pay heavy premiums. And 20s are the most healthy age unless you are not a heavy smoker, suffer poor health, or are into risky professions like skydiving, or mountaineer. Life insurance premiums are cheaper when you buy them young. Even if you are healthy in your 30s or 40s, you still have to pay a higher premium when you buy new insurance because of your age.
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Financial security to the dependents – Youths start earning in their 20s and support their loved ones financially. And a way to do this is by buying a life insurance policy in your 20s. It will support your dependents including your spouse, children, and parents in case of your death. Your nominee will be paid the death benefit and that will be a big financial help they will receive after your death. The family can use this money to repay loans or liabilities that you might leave behind in the event of his death. There are term life insurance plans which will take care of all your liabilities apart from death benefits.
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Planning for retirement – Saving and investing in your early 20s will help you create a bulky savings corpus for retirement life. The premium paid towards beneficial Unit Linked Insurance Policies or retirement pension plans accrue a substantial amount of cash value throughout their policy term. The accrued savings will later serve as a post-retirement pension fund.
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Risk-taking capacity – Buying life insurance in your 20s will give you a scope to experiment with higher-risk investment vehicles and diversify the investment portfolio. Do not put all eggs in one basket and suffer later. Having life insurance will allow you to take risks because you have some assurance to fall back on.
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Getting futuristic with the policy – Mostly you might not feel obligated to buy a life insurance policy in your early 20s as you may not have any dependents. You may not have a spouse or children and maybe your parents are not dependent on you hence you may not feel the need for life insurance. But it is important to buy a guaranteed savings plan in your 20s as it can be fruitful in the future when the need arises like when buying your own house, car, or any other asset, you will have enough savings to pay at least the down payment. Though you may not have any needs, debts, or dependents today, you will have them in the future. While buying a life insurance policy it is wise to think futuristic. It is better to buy a life insurance policy in your 20s so that you leave some financial assistance for your dependents in the event of an unexpected tragedy.
