You’re young, you’re healthy, you’re on top of the world. There’s no way you could possibly—gasp—die, right? Well, we don’t want to burst your bubble, but just because you are young and fit doesn’t mean there isn’t a dirt nap in your future. Whether that future is near or very distant, it’s a good idea to stat planning now. Believe it or not, you may not be too young for life insurance.
When you hear of someone dying in their 20s, 30s and 40s it’s shocking precisely because it’s not all that common. According to the National Center for Health Statistics, the death rate for 25 to 34 year olds is only 104.4 per 100,000 people. For 35 to 44 year olds it’s only 193.3 per 100,000 people. But, that doesn’t mean there’s no risk. In the United States in 2005, there were 41,925 deaths in the 25 to 34 year age group and 84,785 deaths in the 35 to 44 year age group. That’s thousands of deaths, many of which left no life insurance.
If you are married, own a home, have a family or support anyone financially, life insurance is a must. In the event of your untimely death, a life insurance payout will cover your lost income, help with mortgage payments and contribute to your kid’s college fund, among other things. Life insurance can also cover the cost of funeral expenses, which can exceed $10,000. Even if you’re single and unencumbered, it’s a good idea to have enough life insurance to cover at least your funeral expenses.
The younger you are, the easier it is to get life insurance, and the less expensive it will be. The monthly payment on a term policy you get in your 20s and 30s is often less than $25. Depending on the policy you choose, you can lock into a low payment for 30 years or more. If you wait until your 40s and 50s to buy life insurance, you’ll find yourself paying much higher premiums. You might also find yourself with a dreaded “pre-existing condition.” The best time to buy life insurance is when you’re healthy.
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