Buying life insurance when you’re a young professional can seem impractical, especially if you’re just starting to figure out the direction of your future. However, this type of coverage can provide you and your loved ones with financial security, no matter how old you are. People in their 20s or 30s may even get more out of their coverage than those who wait to sign up until later in life. Here are a few important points young adults should know about whole and term life insurance policies.  

Benefits of Purchasing Life Insurance While You Are Young

Financial Protection

When you pass away, a life insurance payout is administered to the beneficiaries of your policy. This lump-sum payment is determined when you enroll in the plan. The money can be used to pay off unresolved debts, help family members supplement the loss of income, or cover funeral arrangement costs.

Better Rates

Life insurance rates are determined by the amount of coverage you choose, as well as the degree of risk you present to the insurer. Younger people tend to have lower premium rates than older adults because they are generally deemed healthier with a lower risk of death.

Choosing a Policy Type

Term

A term life insurance policy is designed to last for a designated period of time, such as between five and 30 years. If you pass during the policy period, the death benefit will be paid out. There is no payout if you pass after the coverage expires.

This is a useful option to cover financial liabilities, such as mortgages or student loans. Purchasing a policy for the duration of a loan ensures the remainder will be paid off if you pass unexpectedly. These plans are considerably more affordable than whole life insurance.

Whole

Whole, or permanent, life insurance provides coverage for as long as you pay the premiums. These plans also build cash value that you can borrow against while you’re alive. This can be useful in emergency financial situations. People opt for whole life plans when they want to provide indefinite financial security to loved ones or build an investment through the policy’s accrued cash value.

Tips for Buying Life Insurance

Both whole and term life insurance plans are adjustable to fit your specific needs. Before enrolling in a plan, calculate how much money beneficiaries may need to maintain a certain quality of life or cover necessary expenses. Opt for a death benefit that, at minimum, covers this total amount.

David R Johnson Insurance Agency Inc. in Beech Grove, IN, can help families navigate the life insurance process. This experienced agency will introduce you to affordable plans that cover your specific concerns. They have been serving clients throughout Indianapolis’s suburban metro area since 1988. They can also help you explore other products, including auto, renters, and homeowners insurance. Visit the website to learn more about these solutions, or call (317) 782-8858 for a personalized insurance quote.